- COVID-19 makes the principles of stakeholder capitalism even more important.
- Businesses and investors have made substantial and relevant changes to how they finance and fund new initiatives and report on sustainability initiatives.
- The Great Reset provides an opportunity for businesses to build on progress on sustainability and inclusion.
At the World Economic Forum’s Annual Meeting in Davos in January, the Forum launched a new “Davos Manifesto” in support of stakeholder capitalism, which says companies should “pay their fair share of taxes, show zero tolerance for corruption, uphold human rights throughout their global supply chains and advocate for a competitive level playing field,” as Founder and Executive Chairman Klaus Schwab explained.
Little could we have known just how relevant this new manifesto would be for the year ahead.
In the midst of a global pandemic, a global economic crisis, a global climate crisis and a global movement to end systemic racism, stakeholder capitalism is more important than ever – and business needs to play a role in building a more inclusive and sustainable world.
There are a lot of challenges to getting there. Rising emissions and use of the world’s natural resources. The gender pay gap, which the World Economic Forum predicted would take 257 years to close – and that was before the pandemic-induced economic crisis, which has shown to have a greater impact on women. Systemic racism, which is not only unjust, but also hurts productivity, creativity, employee health and the bottom line. Ensuring data is used safely and ethically, and ensuring new technologies don’t displace workers.
Without a doubt, COVID-19 makes these goals more difficult to reach – but it also makes them more urgent, given all that we know about the links between the environment and the pandemic, and climate change and human health.
As we embark on the Great Reset after the pandemic, we have a chance to “build entirely new foundations for our economic and social systems,” said Schwab.
“The COVID-19 crisis is affecting every facet of people’s lives in every corner of the world. But tragedy need not be its only legacy,” he continued. “On the contrary, the pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future.”
Sustainable Development Goals to make business better
While corporations committed to stakeholder capitalism should pay attention to all 17 SDGs, meeting the targets of two in particular will help make business better:
SDG 9: Industry, Innovation and Infrastructure. Targets related to stakeholder capitalism include promoting inclusive and sustainable industrialization and, by 2030, significantly raising industry’s share of employment and GDP and doubling its share in LDCs. Other targets include increasing access to financial services for small enterprises, upgrading infrastructure and retrofitting industries to make them sustainable.
SDG 12: c. Targets include achieving sustainable management and efficient use of natural resources and reducing waste generation (especially in food supply chains), and by 2020, achieving environmentally sound management of chemicals and reducing their release. The goal also encourages companies (especially large ones) to adopt sustainable practices and integrate sustainability information into reporting cycles.
Read the rest of the article here at World Economic Forum