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A guide to World Economic Forum (WEF)

Dec 22, 2021 | by Yosy Christy Natalia

Dec 22, 2021 | by

ESG Evaluation Frameworks Series: A Guide to World Economic Forum (WEF)

A Guide to World Economic Forum (WEF), ESG reporting frameworks cater to a range of industries, companies and organizations. While some look into specific interests, others provide a more holistic, well-rounded and broader mechanism to evaluate an organization’s sustainability effort. 

 The world of ESG frameworks is diverse. ESG criteria or frameworks need to be flexible and cannot be rigid as they are adopted by companies all across the length and breadth of the world. Previously, we talked in detail about how a company can go about selecting a framework of its choice. We have also published dedicated blogs on some of the most widely used and credible frameworks. Based on your requirement, research and our help, you can easily choose one out of a pool of existing frameworks or go for a mixed bag approach. 

In this blog, we shall talk about the World Economic Forum (WEF) stakeholder capitalism metrics, its benefits, pitfalls and everything that you’d need to know. 

Understanding WEF stakeholder capitalism metrics

This one is often described as a ‘super framework’. Sustainability entrepreneur and ESG specialist Daniel Botterill, in one of his publications on ESG frameworks, describes a super framework as one that “cherry-picks the best requirements from other pre-existing frameworks to create the ‘best-of-the-best’ standards”.  

All in all, think of the WEF framework as a customized, tailormade evaluation guide aimed at covering some of the most integral aspects of sustainable reporting. 

The framework is designed to be used by companies to align their mainstream reporting on performance against ESG indicators and consistently track their contributions towards the UN SDGs. “The metrics are deliberately based on existing standards, with the near-term objectives of accelerating convergence among the leading private standard-setters and bringing greater comparability and consistency to the reporting of ESG disclosures,” states the official website.

How it works

The framework is a brainchild of the collective effort by the International Business Council and the big four – Deloitte, EY, KPMG and PwC. It works as an aggregator, combining 

guidelines from several other frameworks – such as Global Reporting Initiative (GRI), Sustainable Development Goals (SDG), Sustainability Accounting Standards Board (SASB) and others – to facilitate standardized disclosures and align them with the UN Sustainable Development Goals (SDGs). It simplifies ESG reporting frameworks and categorizes relevant metrics making their application and implementation easy. 

The framework consists of 21 core and 34 expanded metrics revolving around four pillars or themes – Principles of Governance, Planet, People and Prosperity. 

Benefits

  • One of the best parts of working with the WEF framework is the ease of use. The framework is easy to understand, adopt and implement, therefore, an ideal and popular choice for those initiating their journey in sustainability reporting and looking to adopt a holistic approach. 
  • The framework, in a way, provides the best of different frameworks available in the market and aligns them with SDGs, this makes it an attractive choice for many companies.
  • It is comprehensive, promotes and enhances comparability and consistency in sustainable reporting, disclosures and associated practices among companies. 

Pitfalls and challenges

  • Despite its all-encompassing design, the framework is not completely free from pitfalls. There have been reports of some companies registering difficulties in using the metrics, particularly with data accessibility and processing, jurisdictional issues, among others.
  • It must be remembered that the framework is a generic one, therefore, if someone is looking for a more streamlined set of metrics covering a specific issue, WEF metrics must be worked with in conjunction with those. For example, the Carbon Disclosure Project (CDP) is aimed at helping organizations and governments conserve water, curb emissions and promote afforestation, if an organization is primarily vested with such operations, it must look at working with WEF together with CDP and other relevant frameworks. 

Our take

The WEF framework makes sustainability reporting a lot easier, quite literally. Companies can easily track progress against critical and crucial ESG areas. The framework also has a proven record in enabling companies to measure their collective impact and facilitate comparability using the metrics. Companies using the framework have largely reported enhanced accountability and transparency in operations, practices and disclosures as well as effective sustainability reporting. The framework is a great place to start if one doesn’t have a strong grip concerning sustainability reporting, disclosures and assessing a company’s ESG standing and credibility. 

Read also:

ESG evaluation framework series: A Guide to Carbon Disclosure Project (CDP)

ESG evaluation framework series: A Guide to The Sustainability Accounting Standard Board (SASB)

ESG evaluation framework series: A Guide to IIRC Framework

Artemis Impact is a network of corporate, donors &  non-profits. With our corporate enterprise solution, we aim to empower companies to build human-centered impact stories and create sustainable impact with their CSR programs & core business.

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