Now is the time for more accountability.

Business is being held to account for far more than it has in the past. More and more, success is no longer solely measured by profit, but more by its positive impact across society. It’s a trend that will certainly continue long after the world has pulled itself out this tragic pandemic. Clients and consumers, employees and owners, citizens and governments—all stakeholders— are demanding more because the problems society faces are global in scope and existential in threat.

Climate change, inequality and the building back of our economies after this pandemic are challenges where solutions are needed now, not later. Real tangible action is needed. The good news is that, for some things, there is already a model to borrow from to help measure and drive the change we want to see. Consistent and transparent financial reporting standards have helped investors measure business success for decades, albeit through a very narrow lens. We don’t need to reinvent the model, we just need to expand the scope.

Now that business has become more acutely aware of its role in addressing societal and environmental issues, we need reporting standards that match. After all, business is far more complex than simple dollars and cents or profits and losses. Moving towards ESG-focused metrics that are responsive to the needs and demands of far more stakeholders will help ensure that we all collectively make a difference where it counts.

As always, capitalism works best with better information, and we now have the technology and tools to more accurately measure value creation and wealth. A task force led by the International Business Council of the World Economic Forum and composed of experts from Bank of America, KPMG and the other Big4 organizations, published a paper with a proposed set of ESG metrics and reporting disclosures that can be adopted today.

The report found that nearly 85% of corporate respondents agreed that reporting on a set of universal, industry-agnostic ESG metrics and disclosures would be useful for their company. Moreover, almost 65% are willing or able to report on the core metrics and disclosures in their mainstream annual report. Most encouragingly, 90% of corporates said that they agree that reporting a set of universal and industry-agnostic ESG metrics and disclosures is useful for financial markets and the economy.

The initiative has further stimulated dialogue between standard setters – a start on the path towards global convergence in this space that I strongly support. Adoption of the metrics will bring consistency, comparability and transparency to the reporting of non-financial information and the ESG aspects of business performance. All of this is critical to demonstrating long-term value creation. In the long run, this will strengthen our capital markets and work towards fixing some societal inequities by harnessing the awesome power of capitalism and refocusing it on long-term value creation, rather than allowing it to cannibalize itself. 

Perhaps most encouragingly, this report was the culmination of many stakeholders from every continent, across industry sectors and with input from both private and public organizations. Although I am proud to lead KPMG and help with this initiative, adopting ESG-metrics is far more important than any one company’s contribution. The only way this works and we see the change needed to confront these enormous challenges is if everyone sees its holistic value and works together to achieve it.

More than ever, companies need to do better for the communities they serve. It’s not only the right thing to do, but together, we can create a virtuous cycle that benefits a wider slice of the general population, engage more stakeholders as we do it, and attempt to solve the world’s great problems.

If there was ever a time to work better, together, now’s that time.