GLOBAL: A collection of the world's largest companies, representing $20tn under management, are coming together to push for a different way of reporting company performance to investors to include "intangible assets" including brand value and company culture.
The Coalition for Inclusive Capitalism, which includes over 20 companies and investment funds, including Nestlé, PepsiCo and Unilever, seeks to establish a consistent framework for investors to judge the softer assets that contribute to company value, the Financial Times reported.
Speaking to the paper, the coalition's founder, Lady Lynn Forester de Rothschild, said it was a "first step" towards allowing companies to demonstrate long-term value beyond the quarterly financial results that public companies must share.
"I can't tell you the number of CEOs who talk to me and say, ‘I have extensive employee training but not one analyst has asked me about employee training. They've asked me about my margins on burgers in Detroit'," she said.
Paul Polman, CEO of Unilever, which emphasises sustainability as a key brand proposition, added that such a framework "has long been needed so markets can properly measure this broader approach to value creation."
Explaining the reasons for the move, Lady Rothschild noted the global public's historically low trust in the corporate sector, adding that 2017 "is a critical point in history when popular opinion of capitalism is very low and political pressure against the status quo is building to a crescendo.
"Investors and businesses need a better way to create and articulate the long-term, inclusive value they create for their customers, employees, communities, the environment, and shareholders," she said.
In January, the Edelman Trust Barometer, which surveyed 33,000 people in 28 countries on their trust in the institutions of media, government, business and NGOs, showed a drop in trust across each of those categories.
Though business was "the last retaining wall for trust," according to Kathryn Beiser, global chair of Edelman's Corporate practice, "its leaders must step up on the issues that matter for society."
The Coalition for Inclusive Capitalism, which includes over 20 companies and investment funds, including Nestlé, PepsiCo and Unilever, seeks to establish a consistent framework for investors to judge the softer assets that contribute to company value, the Financial Times reported.
Speaking to the paper, the coalition's founder, Lady Lynn Forester de Rothschild, said it was a "first step" towards allowing companies to demonstrate long-term value beyond the quarterly financial results that public companies must share.
"I can't tell you the number of CEOs who talk to me and say, ‘I have extensive employee training but not one analyst has asked me about employee training. They've asked me about my margins on burgers in Detroit'," she said.
Paul Polman, CEO of Unilever, which emphasises sustainability as a key brand proposition, added that such a framework "has long been needed so markets can properly measure this broader approach to value creation."
Explaining the reasons for the move, Lady Rothschild noted the global public's historically low trust in the corporate sector, adding that 2017 "is a critical point in history when popular opinion of capitalism is very low and political pressure against the status quo is building to a crescendo.
"Investors and businesses need a better way to create and articulate the long-term, inclusive value they create for their customers, employees, communities, the environment, and shareholders," she said.
In January, the Edelman Trust Barometer, which surveyed 33,000 people in 28 countries on their trust in the institutions of media, government, business and NGOs, showed a drop in trust across each of those categories.
Though business was "the last retaining wall for trust," according to Kathryn Beiser, global chair of Edelman's Corporate practice, "its leaders must step up on the issues that matter for society."
Data sourced from the Financial Times, Unilever, Edelman Trust Barometer; additional content by WARC staff
