Harvard Study: Companies Not Reporting ‘Human Capital’ Metrics Such as Occupational Safety

Human capital metrics, including occupational safety and health data, frequently are collected by a majority of global companies, yet many of these firms are not publicly reporting the information, according to a study released 23 October by the Harvard Law School Labor and Worklife Program in conjunction with the Center for Safety and Health Sustainability (CSHS).

"Corporate Disclosure of Human Capital Metrics," authored by Aaron Bernstein and Larry Beeferman of the Harvard Law School Pensions and Capital Stewardship Project, notes that human capital metrics are of increasing interest to global investors who understand that a sustainable workforce is critical to a company’s success, including its bottom line.

“The recent heightened interest in human capital and human capital reporting is part of a fundamental rethinking of how organizational value and social impact should be understood and evaluated,” the authors noted in the study introduction. “Traditional measures of organizational value and social impact are no longer valid in the age of Uber, Airbnb, and disruptive thinking.” They noted that senior management teams and financial investors “want greater clarity about how the organization’s people and relationships among them create value for their stakeholders. Increased focus on linking human capital performance indicators to outcomes and impacts allows management teams to make informed decisions on strategic options and tradeoffs and key stakeholders to better evaluate the value of an organization’s social efforts.”

The study’s conclusion draws on data from a 2016 Corporate Sustainability Assessment conducted by RobecoSAM of nearly 2,000 of the largest companies traded on global exchanges. Survey respondents were far more likely to report human capital metrics than nonrespondents, whose data was gathered solely from public reports, suggesting that many respondents collect metrics but don’t disclose them.

The study shows that 96% of survey respondents disclosed metrics on employee fatalities while only 17% of publicly assessed companies did so. Also, the study indicates that companies typically respond to disclosure requests by citing burdens that would be imposed to collect the data, when, in fact, a critical mass of global companies already carry out such tasks. The research was funded by the American Society of Safety Engineers (ASSE) and the ASSE Foundation.

“Our findings establish a firm basis on which investors can request a comprehensive disclosure of employee safety and health metrics and other human capital data,” Beeferman said.

Read the full story here.

Find the study here.


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