The beginning of wisdom: A first small step to overcoming the confusion at Davos
Andrew Watson
Co-Founder, Rethinking Capital—Accounting for Reality—Tackling upside down incentives as the root cause of the climate and biodiversity crises
Rather than just observe the confusion, I thought I'd put forward a defintion of terms for discussion. Typical lawyer, in need of precision.
'Today's Economy': the current state and system of the global economy known as capitalism and the current stage of capitalism generally practised in Today's Economy known as the Fourth Industrial Revolution (synonyms include the Digital Economy or the Intangible Assets Economy). Today's Economy is characterised by placing the interests of investors above those of other Stakeholders, in particular those of society, the environment and human capital
'Stakeholder Capitalism': the desired state of the global economy referring to a state in and by which Today's Economy transitions to a system in which the interests of all Stakeholders are included and balanced (synonyms to describe this state include inclusive, cohesive, impact, responsible, accountable, sustainable, Sustainable, integrated, long-term, the New Agenda and ethical)
'Stakeholders': in relation to any one organisation, all other organisations, entities and organisms with whom it has direct relationships (including its human capital, value chain and user community) and/or indirect relationships (including society, future generations and the environment, also known as the Planet) (synonyms include constituents)
'Sustainable Business': an organisation that behaves and takes decisions that balance its interests and value creation with and between those of each of its Stakeholders
'Unsustainable Business': an organisation that behaves and takes decisions that do not balance its interests and value creation with and between those of each of its Stakeholders
'ESG'; also known as Environmental, Social & Governance, being the metrics by which a Sustainable Business will be comparably managed and measured (synonyms include sustainable value creation, long-term, sustainability, <Integrated>, externalities, non-financial or pre-financial). To enable Stakeholder Capitalism it is considered important to create standard ESG metrics to enable investors to identify and allocate capital to Sustainable Business(es).