NEW YORK — It has been difficult to objectively assess companies’ contributions to the Sustainable Development Goals, in part because sustainability reports might not tell a full picture, and many of them use different indicators to measure their work. The World Benchmarking Alliance, which launched at the United Nations General Assembly Monday, aims to change that.
WBA will make a publicly available, free set of benchmarks and will use them to rank the world’s 2,000 largest companies on their contributions to the SDGs. The first set of benchmarks — which covers food and agriculture, climate and energy, digital inclusion and gender equity — will be published in 2020, while the full set will be completed by 2023.
The initiative is founded by Aviva, the insurance company, the Index Initiative, and the United Nations Foundation. Funding will come from Aviva and the governments of the United Kingdom, The Netherlands, and Denmark.
“The fact is if you make into a competitive sport, you appeal to nature of businesses,” said Aviva Group Chief Executive Mark Wilson, adding that no business will want to be at the bottom of the list.
The idea is that by publicly calling out companies, there will be both investor and consumer pressure to take actions to have a greater impact in achieving the SDGs. WBA will also be ranking regulators. The reason, said Wilson, is that regulators think too much in the short term and new rules in the wake of the financial crisis have been limiting the ability of investors, particularly institutional ones, to invest in sustainability.
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Prior to the launch, WBA held a series of global consultations and received input from some 10,000 people in around 140 countries. As the system develops, indicators it will continue to consult with a variety of actors and draw upon best-practice metrics, where they exist. The task is ambitious, as Gerbrand Haverkamp, executive director of WBA, said on Monday. He pledged to try to keep it simple because that is the only way to make progress.
While companies such as Aviva pay for access to existing environmental, social, and governance metrics to help guide their decisions, most of that data is expensive. It is also often proprietary, so even if fund managers are using it to inform decisions, they cannot share it with their investors or others. It is critical, therefore, that these benchmarks be free, public, and transparent, Wilson said.
NCDs. Climate change. Financing. Read more of Devex's coverage from the 73rd U.N. General Assembly here.