Human Capital Disclosure Facts & Stats

Along with other sustainability topics, human capital disclosure has taken global public companies by storm. More companies than ever are including human capital in their sustainability reports. But research shows that the value of such human capital reporting and disclosure is falling far short of investor, employee, and other stakeholder needs.

To make things easier for you, we've handpicked the top human capital disclosure facts and statistics you should definitively know about if you want to stay on top of this emerging trend. Interested in human capital reporting and disclosure and how to drive more value in your reporting story? Read our latest report on the State of Human Capital Disclosure – Mid 2021. We'll share with you a little of the progress and research conducted by our Human Capital Investment and Reporting Council (HC IRC). 

In so doing, you'll take a step on the journey of sustainable human capital management - a strategic and systematic approach for managing the risks and opportunities of workforce investment and value creation through people.

Upcoming Disclosure Rules & Requirements

• Rep. Cindy Axne (D-IA) and Sen. Mark Warner’s (D-VA) Workforce Investment Disclosure Act of 2020 would require public companies to disclose various human capital metrics, including data on turnover rates, skills training, health and safety, workplace culture, and compensation statistics. (Source: Center for American Progress)
• On May 14th, 2021, SEC Chairman Gary Gensler said that SEC staff are preparing recommendations for possible climate and human capital disclosure rules and encouraged the public to weigh in before a comment period ends in June. (Source: Pensions & Investments)
• Europe announced a new proposal in April 2021 titled Corporate Sustainability Reporting Directive (CSRD) to make sustainability reporting and the audit of the reports mandatory for companies in the 27-member bloc. The new requirements are expected to cover 49,000 companies in Europe. (Source: Financial Management Magazine)
• Japan FSA issued a proposal to revise the Corporate Governance Code which would require listed companies to enhance board independence, promote diversity of senior managers, and develop ESG disclosure policies. (Source: Financial Services Agency)

Disclosure Rate

• North America and Latin America together have the highest regional sustainability reporting rate of 90%. (Source: KPMG)
• 80% of companies worldwide now report on sustainability topics. (Source: KPMG)
• Over 70% of companies either disclosed human capital information last year or intend to report in 2021. (Source: IR Magazine)
• Over 94% of surveyed companies included the metric of the number of employees. (Source: Willis Towers Watson)
• 38 out of 50 top companies by revenue in the Fortune 100 (or 76%) included disclosure on employee health and safety in first-quarter 10-Q filings. (Source: White & Case)
•  41 out of 80 surveyed SMB companies provided some form of voluntary sustainability disclosure on their websites. (Source: White & Case)
• Of the above 41, over 13 companies did not disclose any ESG related information the previous year. (Source: White & Case)

Location of Disclosure Reports

• The Corporate Sustainability Report is the most commonplace that companies chose to report on human capital disclosure, followed by annual reports and on the website. (Source: IR Magazine)
• Between 2016 and 2019, the number of companies that either produced a report on ESG or spoke to ESG during investor interactions increased from 78% to 92%. (Source: Corporate Secretary)

Stakeholders

• More than 75% of investor relation teams have received questions about human capital management from investors in the past two years. (Source: IR Magazine)
• Over 6 in 10 investors view human capital within the company when looking to invest. (Source: IR Magazine)
• Nearly 80% of directors say their board spends more time discussing talent strategy than it did just five years ago. (Source: Ernst & Young)
• Nearly double the number of institutional investors reported placing greater emphasis on the Social component when making investment decisions - 45% in 2020 vs. 28% in 2018. (Source: Financial Executives)

Disclosure Contents

• GRI is the most widely used disclosure standard for ESG reporting. (Source: KPMG)
• The most important human capital issues for investors are pay and compensation, followed by staff retention & hiring, diversity and senior management. (Source: IR Magazine)
• Word length varied dramatically, ranging from 9 words to 1,582 words. The median disclosure was 369 words long. (Source: FW Cook)

Special thanks to Anh Tran, HCMI, for doing much of the heavy lifting on this work and compiling the above data.