Embankment Project for Inclusive Capitalism (EPIC) Long Term Value Framework
Summary
The EPIC Long-Term Value Framework provides a set of standardized, comparable metrics with principles, guidance, and tools to help companies better measure their long-term performance and the activities that create long-term value for investors and broader stakeholders.
The framework has been rigorously applied and tested by the members of the EPIC project representing almost $30 trillion of assets under management, and builds on a wealth of existing initiatives, standards, methodologies and best practices to ensure the outcomes are useful companies and their investors.
The Embankment Project for Inclusive Capitalism (EPIC) was founded on a simple idea: for societies and economies to thrive, business needs to focus on the long term. The Coalition for Inclusive Capitalism and EY brought together more than 30 global business leaders, including asset owners, managers, and companies representing almost $30 trillion of assets under management, with the aim of enabling companies to better measure, compare and communicate the value they create for investors and other broader stakeholders. The result is the open-source Long-Term Value Framework.
Over the past few decades, the world has seen the introduction of innovative new technologies, the rise of major economic markets, and the disruption of entire industries. The scope and speed of these changes have ushered in a new era of business, presenting significant opportunities for companies and entrepreneurs. But this new era has also brought more challenges, coming from more places, than ever before.
Yet as business leaders navigate the challenges of this new era, there is one thing that hasn’t changed: the metrics used to evaluate a company’s success. Nearly two decades into the 21st century, businesses worldwide are still reporting metrics based on accounting principles and concepts that were first codified in the 1970s.
The Coalition for Inclusive Capitalism launched the Embankment Project for Inclusive Capitalism to tackle this challenge. The Coalition, EY and 31 companies, asset managers and asset owners, came together in pursuit of a single goal: to identify and create new metrics to measure and demonstrate long-term value to financial markets.
The framework was initiated by EY in collaboration with the University of Cambridge, and further developed through series of workshops that brought key players from across the investment chain into the same room. These forums saw striking consensus among this diverse group, who agreed on many of the factors that define long-term value, and how to measure that value in a way that is useful to businesses and investors alike. Four key focus areas, which up to now had been widely considered too abstract and intangible to measure, emerged from discussions: talent; innovation and consumer trends; society and the environment; and governance.