- On a Wednesday video conference call, Klaus Schwab, founder of the World Economic Forum, joined Bank of America CEO Brian Moynihan, and EY CEO Carmine Di Sibio to talk about the future of environmental, social, and governance standards (ESGs).
- Schwab said ESG standards are not a fad, and Monynihan and Di Sibio expressed hopes that more companies would adopt the newly created ESG framework.
- The ESG standards may become mandatory in the future, Moynihan and Di Sibio said.
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On a video conference call Wednesday, Klaus Schwab, founder of the World Economic Forum said environmental, social, and governance standards (ESGs) will be the next step in driving stakeholder capitalism: the notion that a company is responsible to all its stakeholders, including its employees, customers, and the environment.
“ESGs and stakeholder capitalism are not a fad. It’s not a manifestation of business leaders to showcase their corporate social responsibility. ESGs are an integral part of business management,” Schwab said in the call hosted by Diligent Corporation.
ESG standards are a set of criteria used to measure a company’s performance on things such as how the company is impacting the environment (like its amount of toxic emissions), how it manages relationships with its employees (does it encourage employees to volunteer), and how the company runs internally (boardroom diversity).
The call follows a September 22 announcement by executives from the so called “Big Four” accounting firms — Deloitte, PwC, EY, and KPMG — on a new reporting framework for ESGs. A reporting framework helps companies assess their compliance to a set of metrics and report it