Stakeholder capitalism isn’t a new idea

Article by Carmine Di Sibio at Fortune.

Image by Maxim Shklyaev on Unsplash

 

The COVID-19 pandemic has made very clear the importance of prioritizing the well-being of customers, communities, and workers. But this isn’t just a moral imperative. The truth is that it’s always made good business sense to have a stakeholder-focused long-term strategy. Companies that invest in their employees and communities are better able to weather crises, understand where their future success lies, and build in resilience.

Earlier this year, nearly 70 companies and global business leaders committed to disclose a set of universal metrics to measure their performance in terms of environmental, social, and governance (ESG) factors. It was the culmination of a years-long initiative led by EY and fellow Big Four organizations, in conjunction with our colleagues at Bank of America and the World Economic Forum’s International Business Council, to help businesses align their own strategic goals with society’s. EY works with companies to implement the principles of stakeholder capitalism in the workplace.

It was also a sign that there is emerging consensus that ESG measurement is central to understanding stakeholder impact, and behind the idea that businesses should focus on long-term value creation over short-term gains.