Harvard Research Finds Companies Shy With Data on Human Capital

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By Andrea Vittorio

Many companies collect metrics on employee training, fatalities, and other aspects of so-called human capital, but they often don’t report that information publicly, according to an Oct. 23 study from Harvard Law School.

The study said institutional investors that are increasingly interested in this data could use its findings as a road map for seeking disclosure on topics that companies are already tracking.

Investors with nearly $8 trillion in combined assets have asked Apple Inc., Wal-Mart Stores Inc., and 73 other large public companies for more disclosure on the people who work for them as part of a recent push on human capital. It’s been driven in large part by a growing body of research showing a link between effective workforce management and financial performance.

“Companies recognize this stuff is important and it’s important enough to collect information about it,” Larry Beeferman, who directs the school’s Pensions and Capital Stewardship Project, told Bloomberg Law. “The issue is whether they publicly report it or not.”

Reporting Gap

Beeferman and co-author Aaron Bernstein looked at data drawn from a 2016 survey by RobecoSAM of nearly 2,000 of the largest companies traded on global exchanges. They found that companies which responded to the survey were far more likely to report on human capital metrics than those that didn’t respond. The non-respondents could only be assessed based on what they disclosed publicly.

The reporting gap was particularly wide for metrics such as work-related fatalities and the average hours of training companies provided to employees annually.

Companies may be reluctant to make these kinds of metrics public due to legal or reputational concerns, according to Dennis Hudson, executive director of the American Society of Safety Engineers, which funded the study. Or “it’s simply not required” that companies report on these issues, Hudson said.

A group of investors submitted a petition to the Securities and Exchange Commission in July asking for human capital reporting to be required in the U.S., where the study showed corporate disclosures lag far behind those in Europe and the Asia-Pacific region.

The study was conducted in conjunction with the Center for Safety and Health Sustainability, a nonprofit whose member organizations represent more than 100,000 safety and health professionals worldwide.

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com

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