Mark Wilson, Chief Executive Officer of Aviva, the London-based global insurer, may not be the most popular man amongst un-enlightened executive peers by the end of this week, but it will be for the good of serious corporate comparison on sustainability.
Wilson is in New York during Climate Week and the General Assembly of the United Nations, which he personally addressed two years ago (a rare event for a corporate leader) at the launch of the Sustainable Development Goals (SDGs).
He’s in town to draw global attention to one of the world’s biggest open-source sustainability data and ranking projects, which will launch on Thursday. The World Benchmarking Alliance (WBA) could change the face of the way companies are compared on their responses to ESG issues measured against the increasingly important sustainability backdrop of the SDGs.
Full details will be unveiled this week, but in brief the WBA is a high-profile set of publically available league tables scoring companies against their sector peers on their responses to major sustainability issues measured against a number of internationally agreed performance indicators as well as their contribution to achieving the SDGs
The idea is that the information will be free and easily available to consumers – such as via a simple smartphone app – to see how sustainable one company is versus another. A model is the Corporate Human Rights Benchmark, a collaboration for the first public benchmark of corporate human rights performance led by investors including Aviva, Nordea and APG and civil society organisations including the Business & Human Rights Resource Centre and the Institute for Human Rights and Business.
The WBA is partenered with Index Initiative a non-profit organization based in Amsterdam whose goal is to propel the use of benchmarks toengage companies in delivering on the SDGs, based on the template of successful programmes like the Access to Medicines Index. Aptly, the launch of the Alliance, which Wilson hopes will give a big paddle-stroke to a wave of ‘enlightened self-interest’ by companies and investors on sustainability takes place at The New York Public Library on Thursday evening (September 21). As Wilson notes: “We want to make this like a public library as opposed to a paid library.”
“We need to celebrate the success of companies doing well on sustainability, and name and shame too, because frankly that is the only way you are going to get people’s attention, especially boards!”
The Alliance already includes financial backing from governments including the UK, Denmark and The Netherlands, and support from NGOs including Oxfam and WWF.
Wilson has been instrumental in pushing the WBA concept within the heavyweight Business and Sustainable Development Commission that has incubated the idea, because, he says, public ranking is the only way to really get the attention of the c–suite and fire up competitive capitalist instinct.
Talking to RI at Aviva’s headquarters in London, Wilson said: “We need to celebrate the success of companies doing well on sustainability, and name and shame too, because frankly that is the only way you are going to get people’s attention, especially boards! The World Benchmark Alliance appeals to the animal instincts of capitalism: competitive, wants to win, survival of the fittest, Darwinian at its core. What companies respect is
competition, so let’s turn sustainability into a competitive sport, which by its nature has winners and losers. We can’t be too politically correct in this given the urgency of the issues. The World Benchmarking Alliance is combined work from us and governments to create valid metrics and benchmarks and make them really simple, digestible, and importantly, free. I can tell you as a CEO that if we are in the top 10% of an important ranking it makes it into the Board report. Equally if we are in the bottom 25%, it gets highlighted to the Board by the media and campaigners. We’re appealing as much to psychology as economics and science.”
Wilson says the WBA has “really good support” from governments so far, including significant financial backing, which they are hoping to increase: “We are putting decent money in but we need more. It’s got some pretty decent funding behind it because it takes millions for a project of this order.” RI asks what the ‘self-interest’ adjunct to enlightenment is for a large global insurer like Aviva? Wilson says it’s about lowering big risks now and in the future: “We are a big insurer and we insure against risks, which is what big asset managers do also. Can you think of a bigger risk than climate change right now to the property and infrastructure that people and business have built, and to our society and future generations? Take some really tangible examples from recent events. In the Fort McMurray wildfires in Canada last year we had a gross loss of hundreds of millions of dollars. Our exposure was limited to hurricane Irma, but it was, of course, a catastrophe. Look at typhoon Hato in Hong Kong: the worst in 50 years. If you have a look at actual claims, seven of the ten worst weather-related events in history have happened in the last seven years!”But he argues strongly that the enlightened self-interest is also about company purpose. He should know. Under his watch, Aviva has been re-invigorated. And he says championing sustainable finance has been a key driver, notably in staff recruitment, retention, diversity and buy-in. Aviva’s market capitalisation has risen from £11bn to over £20bn, making it the largest insurer in the UK and a UK top 30 company, operating in 16 countries with 33 million customers and £475bn of assets under management. However, Wilson knows that companies have to align responsible capitalism with governments and organisations like the UN, who can set the frameworks for action.
This week, he will also address the Group of Friends on Sustainable Finance, a low-key but important set of UN Ambassadors, and the UK Global Compact flagship event (the Leaders Forum): “I’m talking a lot to different groups, including CEOs; most of whom are at the more enlightened end of sustainability, but some of whom are green-washing to be frank. They need clear signals from government. In turn, a lot of the ambassadors that we are talking to are the more enlightened ones, but they need an understanding of how business can support their work, and what they can do themselves. Politicians can pull regulators into line to give clear guidance. And they can use overseas development capital for public-private partnerships, especially infrastructure, and leverage it with an initiative like the World Benchmarking Alliance to help make a big difference.”
Importantly, he says, politicians can also help push the World Benchmarking Alliance by calling out companies that perform poorly on sustainability based on clear, objective rankings: “If we can marshal this kind of support, then my hope is that the WBA becomes something that boards track very closely every year.”