WEF COO explains why trust and transparency are key for businesses

The lack of snow-capped peaks is not the only dif­fer­ence at this year’s World Eco­nom­ic Forum. This year’s gath­er­ing of polit­i­cal and busi­ness lead­ers in the Swiss moun­tain resort of Davos marks the first time the meet­ing has been able to be held in per­son since the start of the pan­dem­ic.

For Sari­ta Nay­yar, chief oper­at­ing offi­cer of the Forum, it could be the most impor­tant annu­al meet­ing in her 15 years with the organ­i­sa­tion. Set against the back­drop of war in Ukraine, ris­ing glob­al infla­tion and the tail end of the pan­dem­ic, she says: “It real­ly is a very impor­tant time in world his­to­ry to bring peo­ple togeth­er, to be able to talk about some of these issues and devel­op solu­tions togeth­er.”

Although it is often crit­i­cised as being a meet­ing for out-of-touch elites, Nay­yar still believes that the Forum can be a pos­i­tive force for change. “The pur­pose of the Forum plat­form is very much about bring­ing togeth­er peo­ple who can work on these com­plex issues, so that we can help to devel­op com­mon under­stand­ings, objec­tives and solu­tions,” she says.

In atten­dance this year are 1,300 busi­ness­es, 500 CEOs, as well as mem­bers of the G20 gov­ern­ments. “We have the top exec­u­tives here because they are the deci­sion-mak­ers,” Nay­yar says. “They have a lot of influ­ence in the glob­al ecosys­tem, and it’s impor­tant for them to play a lead­er­ship role in dri­ving sys­temic change and cre­at­ing equi­table, sus­tain­able ways of work­ing.”

So far, much of the dis­cus­sion has focused on the war in Ukraine, with the country’s Prime Min­is­ter Volodymyr Zelen­sky call­ing for more sanc­tions on Rus­sia, while the UN warned of an impend­ing glob­al food cri­sis.

But anoth­er key top­ic for Nay­yar is that of trust, claim­ing that it’s an issue that repeat­ed­ly comes up in the WEF’s con­ver­sa­tions with busi­ness. “There is def­i­nite­ly a con­stant need for busi­ness to do more,” she adds. “To be able to dri­ve that trust amongst their own employ­ees and wider cit­i­zens.”

In Edelman’s most recent Trust Barom­e­ter, soci­etal trust is at a low ebb, with 60% of peo­ple sur­veyed say­ing their default posi­tion is to dis­trust some­thing, until proven oth­er­wise. The major­i­ty (64%) also believe we’re at a point where trust is so low, peo­ple are now inca­pable of hav­ing con­struc­tive and civ­il debates about issues they dis­agree on.

Despite this wider decline in trust, busi­ness remains the most trust­ed insti­tu­tion the report stud­ies, com­ing above NGOs, gov­ern­ment and the media. Nay­yar believes that the actions of many employ­ers dur­ing the pan­dem­ic have helped to keep lev­els of trust in the pri­vate sec­tor high.

“Through the pan­dem­ic busi­ness­es worked very hard to ensure they moved in direc­tions that were more accom­mo­dat­ing of employ­ees, while con­tin­u­ing to deliv­er on their busi­ness goals,” she says. She con­tends that, at the indi­vid­ual lev­el, peo­ple may have felt bet­ter sup­port­ed by their employ­ers and the busi­ness sec­tor than gov­ern­ment over this peri­od.

But there is still a wide­ly held sen­ti­ment that busi­ness is not doing enough to address soci­etal prob­lems. More than half of peo­ple sur­veyed by Edel­man think that busi­ness­es could be doing more to pre­vent cli­mate change, while 49% think com­pa­nies are not suf­fi­cient­ly address­ing eco­nom­ic inequal­i­ty.

Nay­yar believes that bet­ter trans­paren­cy is cru­cial to improv­ing trust in these areas. “Peo­ple are look­ing to see that organ­i­sa­tions are play­ing a big­ger role than just deliv­er­ing bot­tom line prof­its,” she says. “This is where trans­paren­cy around ESG per­for­mance is crit­i­cal.”

The issue was raised by Unilever CEO Alan Jope dur­ing one of the ses­sions in Davos. As a num­ber of juris­dic­tions look to launch their own reg­u­la­tions on ESG report­ing, he claims that it is becom­ing more oner­ous for com­pa­nies, par­tic­u­lar­ly for multi­na­tion­als, to mon­i­tor their progress in these areas. “We are at a point of great dan­ger right now of let­ting per­fect get in the way of good, of let­ting com­plex get in the way of sim­ple and of let­ting local get in the way of glob­al,” he says.

Jope went on to admit that the con­sumer goods giant was “strug­gling with the most basic abil­i­ty to mea­sure these dif­fi­cult-to-mea­sure areas” – despite Unilever’s size and pri­or expe­ri­ence in this area.

This is where Nay­yar hopes the Forum’s own sus­tain­able cap­i­tal­ism met­rics, cov­er­ing the four pil­lars of peo­ple, plan­et, pros­per­i­ty, and prin­ci­ples of gov­er­nance, can help. The idea is to have a sim­i­lar set of inter­na­tion­al stan­dards for com­pa­nies to mea­sure their per­for­mance against oth­ers.

“We have a sub­stan­tial project in that are­na to cre­ate a glob­al­ly con­sis­tent, com­pa­ra­ble and reli­able report­ing and dis­clo­sure sys­tem that can real­ly demon­strate whether a cor­po­ra­tion is mov­ing in that direc­tion, and being more sus­tain­able,” she adds. “Cre­at­ing ESG met­rics so that organ­i­sa­tions across var­i­ous sec­tors and var­i­ous geo­gra­phies could have com­mon stan­dards, can real­ly improve trust.”

There will be a hope that improv­ing trans­paren­cy in these areas will help the pri­vate sec­tor to retain its title as the most trust­ed insti­tu­tion.