Accountability is crucial to an economic system that serves people and stewards our natural resources for future generations. Business needs to be accountable to all of its stakeholders, from workers to investors to local communities, balancing diverse interests and reporting on its choices and progress. Accountability to all stakeholders will require the reset of the purpose and principles of many businesses.

Common metrics can serve this accountability goal, supporting the realisation of sustainable and ambitious corporate purpose and principles into targeted action. Metrics can help guide the new compass for business, based on the premise that we must measure success differently. Wellbeing and a thriving planet need to be valued alongside financial returns. Metrics must therefore reflect the totality of financial, social, and environmental performance.

Incentives must change. Short-termism must be discouraged. Business and investment that create sustainable social and environmental value, alongside financial value, should be rewarded. Likewise, business and investment that produce negative externalities need to bear those costs, rather than push those costs on to the balance sheet of citizen-taxpayers.

Fiduciary duty shapes the purpose and responsibilities of the firm. Redefined, it will require business and investors to be accountable for their impact on all stakeholders and to steward our natural and social systems. This redefinition is increasingly practiced by business and touted by economists and academics as foundational to creating a just, inclusive and regenerative economic system that meets the needs of the 21st century.

Below is an indicative list of allies, initiatives and projects that demonstrate accounting for stakeholders.

• The Global Impact Investing Network (GIIN) was set up in 2009 to accelerate impact investing — investment that generates positive social and environmental impact, alongside financial returns. The GIIN builds infrastructure for impact investing through education and training, research and other activities, such as special program for institutional asset owners. Its members now number nearly 300 and are based in more than 40 countries.
  https://thegiin.org/
• Impact Management Project is a forum and structured network — including SASB, GRI, CDP and many others — for building a global consensus on how to measure and manage impacts. It also offers thought leadership and hosts a network of more than 2,000 practitioners to share experience and establish norms.
  https://impactmanagementproject.com/
• Impact-Weighted Accounts Project seeks to transform corporate accounting so that company accounts also reflect non-financial impacts.  More broadly, the aim is to bring impact measures into ESG, for use by investors and business alike. The Project is based out of Harvard Business School.
  https://www.hbs.edu/impact-weighted-accounts/Pages/default.aspx
• Corporate Reporting Dialogue was set up to provide more coherence and integration in reporting standards. Those organisations engaged in the dialogue are some of the largest standard setting organisations in the ESG space, such as Global Reporting Initiative, Climate Disclosure Standards Board and the International Accounting Standards Board. It also runs the Better Alignment Project, to find common strengths in ESG reporting and to integrate financial and non-financial reporting.
  https://corporatereportingdialogue.com/
• Embankment Project for Inclusive Capitalism (EPIC): EPIC brings together asset managers, companies and asset owners in defining new metrics to measure the creation of long-term value in the financial sector. The Project focuses on four key drivers for this long-term value creation: human talent, society and the environment, governance and innovation. By switching from short-term to long-term metrics, EPIC is changing the definition of a success and contributing to a more sustainable financial industry ( https://www.epic-value.com/)
• Leaders on Purpose convenes CEOs who are purpose driven towards positive change for people and planet. It offers research. such as a longitudinal study of CEOs, as well as strategies and platforms for business leadership, allowing business to collaborate with other stakeholders. https://www.leadersonpurpose.com/
• Task Force on Inequality-related Financial Disclosures (TIFD): The TIFD was created in the second quarter of 2020 to recognize and assess systemic inequality and the risk it poses to business and investors. Working across policy-advisors, civil society and companies, the TFID aims to reach a framework for assessing and mitigating economic inequality.
  https://thetifd.org/
• Benefit Corporation Structure:
  Benefit Corporation legal structure expands the fiduciary duty of directors beyond consideration of the financial interests of the shareholders to include stakeholder interests. Enacted with overwhelming bipartisan support in two-thirds of U.S. states including Delaware, and in a growing number of countries, the benefit corporation legal structure has been adopted by more than 8,000 businesses, both private and public. https://benefitcorp.net/what-is-a-benefit-corporation

Below is an indicative list of tools that can help business and others realize this imperative.

• Giving in Numbers, Chief Executives for Corporate Purpose (CECP) CECP offers an annual benchmark of corporate social investments by 550+ multi-billion dollar companies. The benchmark is developed with corporate input and the data on social investment spans nearly 20 years. The report itself focuses on such elements as cash and in-kind/product, employee volunteerism and giving, and impact measurement.
  https://cecp.co/home/resources/giving-in-numbers/
• The B Impact Assessment is a free impact management tool used by more than 100,000 businesses globally to assess and improve their positive impact on all stakeholders and the environment. https://bimpactassessment.net/
• Enacting Purpose Initiative is a multistakeholder partnership that has developed guidance for boards, management and investors on how to value purpose. Specifically, it offers a SCORE framework (Simplify, Connect, Own, Reward, Exemplify) to measure how purpose is used in a company. EPI has started its work with companies in the EU and UK and hopes to extend into the US in 2021.http://enactingpurpose.org/#home
• The World Economic Forum (WEF), through its International Business Council, has promoted a project to define the “best of the best” ESG metrics, to address the multiple, varied and sometimes contradictory standards and measures of non-financial value. In January 2020, the IBC, working with the Big Four, produced a first draft of common metrics: “Toward Common Metrics and Consistent Reporting of Sustainable Value Creation,” advocating for the integration of ESG measurement. Consultation on this effort continues.
  http://www3.weforum.org/docs/WEF_IBC_ESG_Metrics_Discussion_Paper.pdf
• Total Societal Impact (TSI): BCG’s TSI framework recognizes the limitation of the predominant ‘total shareholder returns’ strategy focus taken by businesses for decades. The TSI framework proposes a more holistic understanding of business’s role in society and represents ‘the total benefit to society from a company’s products, services, operations, core capabilities, and activities’. More importantly, BCG demonstrates through this new framework that financial value can be created through these new metrics. (https://www.bcg.com/publications/2017/total-societal-impact-new-lens-strategy)

Below are some sources of thought leadership and emerging trends on accounting for stakeholders.

• Conscious Capitalism convenes a network of entrepreneurs and business leaders dedicated to higher purpose, stakeholder orientation, conscious leadership and conscious culture. Conscious capitalism believes business can serve humanity, by addressing the interests of all major stakeholders.
• The World Economic Forum has established the Great Reset initiative in 2020, in response to the dual challenges of the pandemic and the transition to stakeholder capitalism. The Great Reset is also the theme of twin summits to be held in Davos and in hundreds of locations around the world in 2021, convening cross-generational leaders to address economic transformation and the establishment of a new social contract.
  https://www.weforum.org/great-reset
• The B Corp movement is a community of more than 3,500 businesses across 70 countries all of whom have met the highest standards of verified overall social and environmental impact, public transparency, and legal accountability to balance profit and purpose. https://bcorporation.net/