Human capital: Communicating value through ESG reporting

Elevating Human Capital with #PwC #ESG #HumanCapital Key Takeaways:

• Human capital is increasingly viewed as a critical asset in ESG reporting.
• Transparency in human capital management can signal value to investors.
• Regulatory proposals may push for more quantitative human capital disclosures.

Further Insights

1. ESG Reporting: Companies communicate the value of human capital in ESG reporting, highlighting the importance of transparency in human capital information.

2. Regulatory Landscape: Upcoming regulatory proposals and standards like CSRD aim to provide clearer links between human capital management and company value, increasing reporting requirements.

3. Investor Relevance: Investors seek decision-useful information that reflects on the enterprise value of companies, with a focus on how human capital is managed and its impact on financial performance.

4. Practical Challenges: Gathering and reporting qualitative and quantitative data on human capital poses challenges due to variable definitions and sensitivity around personal information.

5. Future Directions: Anticipation of more prescriptive SEC guidelines suggests a shift towards more quantitative disclosures and a greater emphasis on human capital's financial impact.

Closing Thoughts: As the regulatory environment evolves and the importance of human capital is further recognized, how will companies adapt to meet these challenges while demonstrating the true value of their workforce? Engaging in this discourse may pave the way for innovative practices in human capital management and reporting.

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