We are moving into the era of multi-stakeholder capitalism, shifting corporate leadership away from a single-stakeholder approach or shareholder supremacy. This requires organizations to be mindful of their impact on employees, clients, suppliers, communities, and the environment, considering their business activities’ impact on humanity and the planet.

With this in mind, companies are able to better foresee risks, as they have more resources at their disposal.

The question here is, what would the emphasis on multi-stakeholder capitalism look like, to address climate change?

Here are some examples.

• Non-financial disclosure requirements

Mandated disclosures of social and environmental impact for public companies and financial market participants, directing them to disclose their ESG contributions in their business model. Stakeholders need assurance that companies are identifying non-financial risks appropriately, using robust tools and data, and making credible assumptions in modeling those risks. They also want to know that these companies are taking measures to manage and address those risks.

• Financing climate action

Multi-billion-dollar funding can be channelled through the Green Climate Fund, to help developing countries deliver climate action plans. The Global Commission on Adaptation, for instance, estimated that investing US$1.8 trillion from 2020 to 2030 could generate US$7.1 trillion in total net benefits in five areas. These include early warning systems, climate-resilient infrastructure, improved dryland agriculture crop production, global mangrove protection, and more resilient water resources.

• Interest from the private sector 

A surge of interest from companies to adopt sustainable business plans, as decision-makers are aware of the vast growth opportunities ahead in the global transition to a decarbonized economy by 2050. Investors can also utilize their voting power in the portfolios they have with companies by supporting climate resolutions in shareholders’ meetings to accelerate the decarbonization process.

• Risk compliance tools

Assists companies to evaluate risks within an appropriate ESG framework, through analytics and reporting tools, using comparable metrics that hold organizations accountable to stakeholders. The tool could focus on outlining environmental impacts resulting from business activities, to assure stakeholders that these risks are mitigated or they can foresee incidents before they harm the environment.

There are multiple ways stakeholder capitalism addresses climate change, showcasing examples of positive impact, serving as a blueprint for stakeholders. Some of these ‘champions’ include sunlight being used in Indonesia which has saved 39,700 litres of diesel consumption per year, reducing greenhouse gas emissions. There’s also the “Cleaner Production Program” in Bangladesh, where they have used machinery that consumed up to 50% less water than average.

There is a new direction to head in when it comes to economic development – pioneering companies are making corporate governance a priority, ensuring that they foster a culture of responsible business leaders that are eager and enabled to make a positive impact in the world.