Chief executive officers of many of the world’s largest companies have expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors that are generally framed as ESG topics.

Agreed at Davos, the move underlines how business leaders increasingly see the topics of ESG and the SDGs as important to long-term business value creation. The International Business Council (IBC) of the World Economic Forum discussed a proposal prepared by the Forum in collaboration with the Big Four accounting firms – Deloitte, EY, KPMG and PwC – titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation. The proposal recommends a set of core metrics and recommended disclosures. The intent is for the metrics to be reflected in the mainstream annual reports of companies on a consistent basis across industry sectors and countries.

“For stakeholder capitalism to become a reality, we must be able to measure companies’ performance on environmental, social and governance metrics,” said Klaus Schwab, founder and executive chairman of the World Economic Forum. “The International Business Council’s decision to endorse this principle, and their willingness to be measured in their annual reports on more than profits, is a crucial step to change our economic system for the better.”

The proposed metrics and recommended disclosures have been organised into four pillars that are aligned with the SDGs and principal ESG domains. They are: Principles of governance; planet, people and prosperity.

The metrics are drawn, wherever possible, from existing standards and disclosures such as GRI, SASB, TCFD, CDSB and others. Instead of reinventing the wheel by creating a new standard, they aim to amplify and elevate the rigorous work that has already been done by these initiatives, bringing their most material aspects into mainstream reports on a consistent basis.

At the request of the IBC, the World Economic Forum will continue to consult with interested companies and other stakeholders to further develop and test these metrics and universal disclosures as well as to engage and collaborate with policy-makers, businesses and civil society groups who wish to see this work progress.

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