GENEVA (AN) — Ahead of its annual gathering in the Swiss mountain resort of Davos, the World Economic Forum released a universal mission statement for 21st century businesses on Monday that elevates the importance of doing good.
WEF's new "Davos Manifesto," titled “The Universal Purpose of a Company in the Fourth Industrial Revolution," is a call to put considerations about our planet and society on par with profit motives. Its updated ethical principles coincide with the international organization's 50th anniversary.
"The purpose of a company is to engage all its stakeholders in shared and sustained value creation," the new manifesto begins. "In creating such value, a company serves not only its shareholders, but all its stakeholders — employees, customers, suppliers, local communities and society at large."
Klaus Schwab, WEF’s founder and executive chairman, said the change was long overdue since he founded what was originally called the European Management Forum in 1971, and released a 1973 manifesto that first described companies' principal responsibilities toward stakeholders.
"Companies should pay their fair share of taxes, show zero tolerance for corruption, uphold human rights throughout their global supply chains, and advocate for a competitive level playing field," said Schwab, a German economist and former business professor.
WEF's manifesto will serve as a guide for the next Davos gathering from January 21 to 24.
The 'Greta Thunberg' effect
Schwab, in an op-ed published on Monday, gave 16-year-0ld climate activist Greta Thunberg part of the credit for the rise of "stakeholder capitalism" and "impact investing" that focus not just on financial returns, but also on benefits to environmental and societal well-being.
Thunberg, whose August 2018 protests in front of Swedish parliament sparked the Fridays for Future climate strike movement worldwide, told world leaders in September that even the most optimistic scenarios for cutting heat-trapping greenhouse emissions only give the world a 50-50 chance of holding future warming to another 0.4 degrees Celsius, which would be a failure.
The 2015 Paris Agreement committed the world to keeping global average temperatures from rising by no more than another 1 degree C. above current levels, or only a half-degree C. more if possible, in keeping with consensus projections and dire assessments carried out by top climate scientists.
But a United Nations report last month cautioned the world must begin cutting greenhouse gas emissions by at least 7.6% a year starting in 2020 to meet global targets for avoiding the worst effects of planetary overheating.
"The young Swedish climate activist has reminded us that adherence to the current economic system represents a betrayal of future generations, owing to its environmental un-sustainability," Schwab said. "We should seize this moment to ensure that stakeholder capitalism remains the new dominant model.”