If the WEF wants to change the world, it can start with itself

If the WEF wants to change the world, it can start with itself
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Several thousand of the most powerful people in the world recently converged upon Davos, Switzerland for the annual meeting of the World Economic Forum. Heads of state, CEOs, public intellectuals and even major celebrities were among the attendees of the exclusive four-day megaconference.

Though the World Economic Forum is elitist in setting and attendees, it seeks legitimacy by promoting itself as a champion for the common good. Critics demur. They see the forum as consisting of effusive, feelgood discourse that ultimately has very limited impacts on improving social welfare.

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As academics, we have been curious about the actual welfare impacts of the forum. In a research paper published in the peer-reviewed journal, Social Forces, we explored whether the forum is able to improve the social responsibility of its own “strategic partners”— the companies most closely associated with the forum financially and operationally, including powerful global names like Bank of America, Google and Siemens.

We note, as many others have, that corporate social responsibility is now a mantra at the forum; it's a major theme in its speeches, sessions and ceremonies and a refrain in the ensuing announcements, reports and think pieces.

Our paper, “International Organizations as Mobilizing Structures,” was a longitudinal analysis that compared the social responsibility of strategic partners before and after joining the forum, as well as against a comparable set of non-member multinational companies. 

Consistent with criticisms of the forum more broadly, we found that strategic partners do much better in terms of talk than action.

While they are more likely to broadcast their social activities through the voluntary reporting frameworks of the Global Compact and Global Reporting Initiative, they are generally not more likely to have social practices that receive higher ratings from external evaluators, particularly KLD Analytics, Dow Jones, Newsweek and Corporate Knights.

Indeed, when we used case-control models to match strategic partners with non-members of similar size, sector and geographic region, we found that strategic partners had neither more social responsibility “talk” nor more “action.”

These results seem worse comparatively. We included in our models another exclusive association of large multinational corporations — the World Business Council for Sustainable Development.

This organization also bills itself as promoting a more just and compassionate global economy and also has an impressive roster that includes names such as BMW, Deloitte and Exxon.

The 200 members of this organization had both a larger and more statistically significant association in our models with indicators of both talk and action. They were more likely to report their social responsibility activities through an additional platform (the Carbon Disclosure Project) and to have higher-assessed practices according to nearly every evaluator that we could find.

It is thus possible and perhaps even reasonable for a large international business association to cultivate a membership of socially responsible leaders.

To be sure, association does not equal causation. While we used standard statistical techniques to support causal inference, we note that even a less-causal interpretation of the results is not necessarily redeeming. 

It still seems contradictory, according to that interpretation, that an organization that presents itself as a force for good does not associate itself with the very best companies, those whose social practices have been roundly commended by professional evaluators.

In conclusion, if the forum is truly and fully committed to changing the world, it might consider starting at home — selecting future partners with exemplary social practices or improving the practices of existing partners in meaningful, measurable ways.

Shawn Pope is a research fellow at the School of Business and Economics at the Norwegian University of Life Sciences. Alwyn Lim is an assistant professor of sociology at Singapore Management University.