Annual Report 2021-2022
Measuring Stakeholder Capitalism: Metrics and Disclosures
The World Economic Forum Stakeholder Capitalism Metrics reveal the Forum’s performance on four environmental, social and corporate governance (ESG) pillars: Principles of Governance, Planet, People and Prosperity. This is the Forum’s second ESG report. As noted last year, “ESG reporting is a journey that leads to improvement over time.” Over the past year, the Forum observed the first signs of this process of gradual improvement, based on our reporting.
In the People Pillar, for example, the Forum’s ESG report published last year showed that the organization could improve on particular aspects of its employee diversity and gender equality. One point in case is the nationality of employees. In 2020, Forum employees represented 83 nationalities, with a heavy focus on Europe and North America. Those two continents accounted for 75% of employees. By mid-2022, staff with other nationalities joined the organization, with proportionally more stemming from the Asia-Pacific region; the organization hired staff from 11 as yet unrepresented countries to total 94 nationalities, with 30% of the employee base now from non-European and non-North American countries.
A similar shift occurred in terms of gender representation across the organization. The Forum has historically attracted more women than men, and the share of women increased further from 60% in FY-20/21 to 62% in this fiscal year. But the majority of junior staff have traditionally been women in Level 1 or “Specialist” and Level 2 or “Lead” positions, with below 50% in mid-level managerial roles and less than 20% on the Managing Board. Progress was made in both of these categories, with women filling half of the mid-level managerial roles (Level 3, or “Head” positions) as well as reaching the critical one-third threshold of female representation on the Managing Board. Women continued to be under-represented in senior management (Level 4 positions), however, lagging behind the trend, requiring further improvement.
Two programmes this year that fell under the People Pillar warrant highlighting. First, the Forum significantly increased its learning budget, spending almost as much in the past 12 months on learning (CHF 980,000) as in the two previous years put together. It also spread those investments in learning and skills much more widely, offering all employees CHF 1,000 to spend on courses of their choice. Second, the Forum significantly increased its hiring and launched a new programme specifically aimed at young professionals – the Early Careers Programme. Giving talent more opportunities to join the Forum and investing in existing employees are examples of how the Forum contributed to upskilling the workforce and included more young people in its work.
Falling under the Planet Pillar, the return to in-person events taught us how much of the Forum’s so-called Scope 3, or indirect, environmental footprint is based on the physical movement of people, especially from air travel mainly linked to the World Economic Forum Annual Meeting in Davos-Klosters. In fiscal year 2020-2021, when no physical meetings took place due to the pandemic, the Forum’s expanded carbon footprint plummeted to 790 tonnes of CO2e emissions, from a high of almost 100,000 tonnes in the previous year. This shows the organizational efficiency of the day-to-day operations, with all employees working in best-in-class offices. But challenges still lie ahead. With the organization of the World Economic Forum Annual Meeting 2022 in Davos-Klosters, the CO2e emissions footprint shot back up to about 40,000 tonnes, primarily because of the air travel required to convene the participants.
The Forum will continue to neutralize emissions by purchasing removal credits to offset residual CO2e emissions and achieve its net zero by 2030 commitment and its CO2 reduction plan in line with Science Based Targets initiative standards. But to solve the significant challenge posed by the dual need to reduce emissions and convene people from around the world, the organization is looking at creative and innovative solutions, such as replicating some aspects of the Annual Meeting in the metaverse.
These examples illustrate the value of including this ESG-based Stakeholder Capitalism Metrics section in the Annual Report, and in that of any large business or international organization. By measuring ESG performance, it becomes possible to better manage it. The dozens of ESG metrics outlined in this report once again show the Forum’s impact and performance on a much broader set of indicators than simply the results presented in its financial statements or its Partner count. The Managing Board and Board of Trustees can use them as a tool to improve our contribution where needed. They also provide a means for you, our readers, to keep the Forum accountable as it pursues its mission of improving the state of the world.