THIS WEEK: McKinsey shows that closing the racial wealth gap could increase GDP by $1.5 trillion. Morgan Stanley demonstrates there is lower downside risk and no financial trade-off in the returns of sustainable funds (helpful insight for this week’s market!). GM eliminates hybrids to concentrate on electric cars. Gap vows to use 100% clean power.
The SEC Gets Interested in Human Capital
Last week, the SEC proposed new amendments to modernize Regulation S-K, which contains the specific requirements for non-financial statement disclosures.
It’s certainly a start. These items have not undergone significant revisions in 30+ years.
Most importantly, the new revisions would expect companies to release information on human capital issues, a step-up from the current reporting, which only asks for the number of employees a business has. The new amendment recognizes what we all know: the market needs better measures to address the attraction, development, and retention a company’s most valuable asset – its employees. And yet, there’s a lot further the SEC and companies can go to create transparency in the market on human capital and other core, non-financial metrics that create value for all stakeholders.
We’ve spent the better half of this year focusing on human capital disclosure, why transparency matters, and how investing in workers can provide competitive advantage in this tight labor market. Check out our overall analysis here, and special features relating to diversity, gender pay equity, career development, tuition reimbursement, parental leave, and work-life balance. We hope it provides further inspiration to encourage corporations to invest in human capital and human capital disclosure.
– Martin Whittaker