The stakeholder capitalism is here to stay

This week began the 50th Annual Assembly of the World Economic Forum (WEF), better known as the Davos Forum, a Swiss city where every year since its inception in 1971, a distinguished cast of entrepreneurs, politicians, intellectuals, and think-tanks come to analyze and discuss the most challenging problems that our society may have. 

On this occasion, the assembly’s debate is on the “role of stakeholders in promoting a more cohesive and sustainable world” by helping governments and institutions to meet the sustainability targets set in the Paris Agreement, limiting global warming to 1.5°C.   

The WEF has coined the concept “stakeholder capitalism” to stand itself for this commitment and to propose, through its own statement, two notions: that companies have as their main objective the creation of value for their shareholders and that they create value for people, resources and communities affected by their activities. The WEF’s founder, Klaus Schwab, already addressed this issue in 1973, but thanks to the increased global awareness, he has returned to stay. 

In an article we published a month ago called “The growing strength of ESG investments”, we talked about the boom of sustainable investment through Environmental, Social, and Governance (ESG) funds. Their global size reached 30.6 trillion euros in 2018, with a growth of 34% in just two years, representing 49% of total assets under management in investment budgets in Europe or 26% in the United States.   

Larry Fink, CEO of Blackrock and the world’s largest fund manager, stated in his last annual letter to CEOs her commitment to make sustainability the core of the firm’s investment strategy. It also made clear that Blackrock would vote against the managers of those companies that are not making enough progress in their sustainability practices and strategies. So,  there is no doubt that there is no turning back.  

Associations and organizations that promote sustainability generally focus more on large corporations. This may seem logical if we consider the resources they have, which allow them to have management and information systems and to highlight their efforts in the area of sustainability and be able to spread the word. However, they seem to forget about SMEs, which globally represent no less than 90% of all companies, but only 10% of them have critical sustainability strategies in their management model. 

That is why we applaud the recent initiative of the United Nations, which has been setting up a scheme to help SMEs implement integrated management models. In these models, the monitoring of certain criteria of sustainability and impact on the development of their activities allows them to meet the criteria set out in the Sustainable Development Goal (SDG) established by that organization. 

In the Fellow Funders Team, we stand for the philosophy that defends the WEF and the criteria of management and reporting supported by the United Nations. In fact, one of our principles when presenting investment projects in SMEs and startups is to democratize the investment in private capital projects. Thus, it is allowed to link the interests of the promoters with those of the stakeholders (employees, clients, suppliers) who wish to be the main actors of their investment projects. 

Mariano Colmenar
Fellow Funders Team

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