Mahindra Group chairman Anand Mahindra believes that businesses can derive biggest growth opportunities from serving people at the bottom of the pyramid and companies need to stop seeing environmental, social and governance (ESG) metrics as a "trade-off". While speaking at a panel discussion on 'Implementing Stakeholder Capitalism' at the World Economic Forum's virtual Davos Agenda Summit, the Mumbai-based business magnate said it is in everyone's interest to grow businesses in a sustainable manner.
Mahindra said, "As a businessman, it benefits to create a business that promotes the economic prospects of as many people as possible. Businesses need to find a purpose that is transcending." He added, "The biggest growth opportunity for companies comes from serving the bottom of the pyramid. We need to stop seeing ESG as a trade-off-- it's not a box-ticking exercise. It is how we serve the needs of a rising population."
In the same discussion, WEF founder and executive chairman Klaus Schwab said he believes 2021 will be a historic year in changing business philosophy. Schwab said businesses will increasingly recognise the need for stakeholder capitalism in the wake of the coronavirus pandemic. He added although just the first step, the crisis will move stakeholder capitalism on from just being a concept to actually walking the talk.
The WEF's International Business Council (IBC) has proposed a set of universally applicable ESG metrics known as Stakeholder Capitalism Metrics (SCM). Stakeholder Capitalism Metrics (SCM) is a set of environmental, social and governance metrics and disclosures released by the World Economic Forum (WEF) and its International Business Council (IBC). The Stakeholder Capitalism Metrics, which are considered as most critical for business, society and the planet, have been derived from existing voluntary standards that offer a set of 21 universal and comparable disclosures focused on people, planet, prosperity and principles of governance.
The SCM not only measures the long-term enterprise value creation for stakeholders involved but also bolsters the ability of companies and investors to gauge progress on matters of sustainability. Companies like Mahindra, Sony, Nestle, Unilever and Dow have committed to the SCM metrics.
With PTI inputs; by Mehak Agarwal