Embracing sustainable value creation in the boardroom
Four pillars for a new paradigm
The concept of sustainable value creation is not new. What is relatively new, however, is the increasing realisation that action needs to be taken quickly to address the environmental, social, and governance (ESG) challenges facing our planet to ensure a sustainable future. This action is the responsibility of everyone: governments, businesses, investors, and individuals.
In the midst of the COVID-19 pandemic, businesses in Southeast Asia are stepping up with unprecedented contributions in the name of public health and well-being. For most of these organisations, responding to the current crisis is simply a moral imperative. But once the next normal is reached on the other end of the crisis, boards will find their world – and their boardrooms – fundamentally transformed.
While some forward-thinking boards may have already recognised the high stakes of sustainability – not only for our planet and people, but also for organisational competitiveness and their social license to operate – the pandemic has undoubtedly sharpened the scrutiny on many ESG concerns.
Increasingly, stakeholders are seeking greater transparency into how organisations are addressing ESG issues in their business strategy, governance, risk assessment, as well as measurement and disclosure practices. Given that much of this information currently does not come directly from company disclosures – in part due to the lack of a single sustainability standard in the market – data providers often rely on proxies or other sources to provide a clearer picture for stakeholders.
The message to boards is clear: tell your sustainable value creation story – or someone else will. But unless a standardised set of consistent and comparable metrics exists in the marketplace, organisations will continue to find themselves challenged in credibly demonstrating to all stakeholders their progress on sustainability.
In this report, we will present an overview of the Stakeholder Capitalism Metrics framework that was launched earlier in September 2020 by the International Business Council of the World Economic Forum (IBC) – in collaboration with Deloitte, EY, KPMG, and PwC – in an effort to identify a set of universal, material ESG metrics and recommended disclosures.
This framework consists of four broad pillars – Principles of Governance, Planet, People, and Prosperity – each of which has an important bearing on the capacity of an organisation to generate shared and sustainable value in the long run. Along the way, we will also be sharing with you some of Deloitte’s own experiences, as well as our efforts in supporting our clients and collaborating with other external organisations, in advancing along these pillars within Southeast Asia.