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Social & Human Capital Coalition - Protocol Launch (GreenBiz 2019)

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Corporate managers have long heralded people as their companies’ most important assets and research confirms the vital role of human capital in long-term value creation. In recognizing the importance and value of social and human capital many corporations, their investors, stakeholders and business partners are seeking to integrate consistent, standard, and widely accepted valuation and decision making tools. This session will discuss the evolution of the Social & Human Capital Coalition. The Coalition and key stakeholders will delve into the latest trends around valuing social and human capital, as well as the application of the Social & Human Capital Protocol.

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Social & Human Capital Coalition - Protocol Launch (GreenBiz 2019)

  1. 1. The Evolution of Social & Human Capital Management | February 27, 2019
  2. 2. The Protocol Structure
  3. 3. 20+ Years of Evolving ESG Guidance
  4. 4. Examples of Social & Human Capital Interests Demand & Supply
  5. 5. Recent Market Developments January 2018 – A Sense of Purpose “Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce?” March 2018 – Investor Stewardship on Human Capital “Research has consistently shown the importance of human capital to company performance. Companies included in Fortune magazine’s “100 Best Companies to Work For” lists earned, over the long-term, excess risk-adjusted returns of 3.5%.” January 2019 – Purpose & Profit “Purpose unifies management, employees, and communities. It drives ethical behavior and creates an essential check on actions that go against the best interests of stakeholders. Purpose guides culture, provides a framework for consistent decision- making, and, ultimately, helps sustain long-term financial returns for the shareholders of your company.” Investor Activity
  6. 6. Human Capital Activity Evolution of concepts fair labor practices; health and safety; responsible contracting and diversity 20152014 workforce demographics; workforce stability; workforce composition; workforce skills and capabilities; workforce culture and empowerment; workforce health and safety; workforce productivity; human rights; workforce compensation and incentives total headcount, “broken down by the division between full-time and part-time employees, gender, and diversity”; Annual turnover— including both planned and regrettable turnover; Investment in training, skills, and professional development; Employee engagement score 2016 gender diversity; employment type, such as full-time, part-time or agency workers; staff turnover; accidents, injuries and workplace illnesses; investment in training and development; pay ratios between the highest paid and median and lowest quartile workers across the company; and employee engagement scores. 2017 workforce composition, unionization, worker participation in decision-making, OHS practices, training and development and employee compensation policies. workforce composition, worker welfare, investment in skills and worker representation. Sources: Corporate Disclosure of Human Capital Metrics. October 2017. Retrieved from: https://lwp.law.harvard.edu/files/lwp/files/pension_paper_corporate_disclosure_of_human_capital_metrics_102317.pdf CSHS Human Capital Project. http://www.centershs.org/human-capital.php 2018
  7. 7. The Social & Human Capital Coalition
  8. 8. Overview • Launch of the Social & Human Capital Protocol • Announcing the updated Social & Human Capital Protocol • Understanding market activities around social and human capital • Download and apply the Protocol • Join the Coalition • Share your case studies • Spread the word
  9. 9. The Social & Human Capital Coalition The Social & Human Capital Coalition is an initiative which aims to mainstream the measurement of social & human impacts for business – shifting the improvement of social & human performance from an optional extra to a core part of business decision making.
  10. 10. The Social & Human Capital Protocol The Protocol provides a consistent process to guide companies through the journey of measuring, valuing and better managing social and human capital.
  11. 11. Built from existing best practice Targeted review and test Public consultation Analysis of consultation inputs Integration into Protocol Launch of updated Protocol Public consultation launched 17/04/2018 Formal consultation closed in July 2018 Insights from 20 companies 2016 Protocol consultation and review process Review and release of Protocol Q4 2016/2017: Social Capital Protocol Advisory Group (20 external experts) 25 companies tested the Protocol in their organizations Q3/4 2018 Categorize comments Evaluate validity Consider options for update of Protocol content Resolution with Technical Committee input Report on resolution of comments (short summary) Feb. 27, 2019 Q/4 2018 Overseen by Coalition Technical Director Approval by Coalition Executive Director Final sign-off by Coalition Board
  12. 12. Board of Directors
  13. 13. Protocol Technical Committee Doug MacNair ERM
  14. 14. Online collaboration platform: >220 registered for the public consultation online platform >300 comments on the Protocol text Also feeding into the consultation: >70 further contributor inputs through workshops > On-going comments from webinars and informal communication Online and in-person feedback https://collaborase.com/social_human_capital
  15. 15. The Protocol Consultation Key issues 1. Alignment with the Natural Capital Protocol 2. Definitions - in particular the definition of “impact” 3. Social and Human Capital issues 4. Inclusion of “social capital” in addition to “human capital” 5. Dependency pathways Industry Service Provider NGO Academia Other >220 registered for the public consultation online platform >70 reached through in-person workshops >300 comments on the Protocol text
  16. 16. Structural Alignment with the NCP The steps of the Social & Human Capital Protocol (DRAFT)
  17. 17. The Protocol Structure
  18. 18. Next steps and engagement opportunities • Official Release: Wednesday, Feb. 27, 2019 • Download and implement the Protocol in your organization • Join the Coalition • Produce a case study • Lead a sector guide or supplement to the Protocol Download the Protocol at: https://docs.wbcsd.org/2017/form/scp-download.html Previous webinars available at: http://social-human-capital.org/introducing-social-human- capital-coalition/news-events
  19. 19. Thank you Mike Wallace Interim Executive Director, Social & Human Capital Coalition wallace@social-capital.org Partner, BrownFlynn, an ERM Group company mikew@brownflynn.com

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