Bank of America Chief Executive Brian Moynihan said Wednesday that current efforts to produce a set associated with official global standards on ESG issues were vital to “align capitalism with what society wants from it. ”
Asked by CNBC’s Karen Tso at the World Economic Forum in Davos whether stakeholder capitalism needed a reboot through the creation of common standards for corporate disclosures, Moynihan said he was converted to the idea after seeing hundreds of companies sign up to the particular U. N. ‘s Sustainable Development Goals in 2017, followed by ongoing debate over what concepts like sustainability actually mean, and accusations of greenwashing.
“Without that definition, without that convergence, exactly what you had is everybody defined it their own way. Somebody would think this issue’s important or this way in order to talk about it is important, ” he stated.
Environmental, social, and corporate governance (ESG) initiatives are increasingly discussed in business results plus by senior business figures, though they have also proven controversial. Critics have included both those who claim they are a PR exercise and, recently, those who argue ESG investment funds will provide weaker returns.
In 2020, Moynihan — who is also chair associated with WEF’s International Business Council — plus WEF founder and chair Klaus Schwab worked with the big four accountants to create a set of common stakeholder metrics with regard to companies to follow.
He said it was now important to “go to the official side” and has been supporting the new International Sustainability Standards Board set upward by non-profit the IFRS.
On Wednesday’s panel, IFRS Chair Erkki Liikanen mentioned that since setting up the board they had consolidated their work with that of other groups with niche expertise, and were working on a final standards publication to be released in the middle of 2023.
This is due to comprise a set of general non-financial sustainability disclosure requirements for businesses, and the set specifically on climate. Liikanen said it would then need adoption and endorsement around the world.
Moynihan also stated it had been crucial that durability and ethical standards became official and global.
This individual said informal standards-setting meant companies could hide poor sustainability practices “further down the stream” of their supply chains or divest certain assets, or else claim they may be too small in order to carry out checks.
But with standardized, cross-jurisdiction rules that are usually part of companies’ annual reports and audited, he continued, “then frankly, an investment manager, a consumer, community, others can sit there and say, here’s a line that is acceptable and you’re either above it or even below this. ”
“If you’re below it we shouldn’t do business along with you, plus if you’re above it, tell us how most likely making progress along these important things. inch
“Which, at the end of the particular day, will align capitalism with what society wants from this and get all of us going faster. ”
Correction: The headline on this story has been updated to better reflect a quote simply by Brian Moynihan.