ESG (Environment, Social, and Governance) reporting is an important topic in today’s corporate world. Even the SEC has required increased disclosure in this area. For many years the SEC has required publicly traded companies to disclose the number of employees. That disclosure has now been expanded to include the types of employees and independent contractors the company has. The purpose of this is to give investors a window into how the company regards its workers.
The Value Reporting Foundation (VRF) was recently created by the merger of the Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council. Its purpose is to help provide a holistic view of what creates corporate value and advance the development of ESG reporting standards. These include standards for reporting on six capitals, including human capital.
While it is hard to disagree with the fundamental proposition investors would like to know as much as possible about companies they invest in, I somehow can’t shake the feeling that once again disabled are being left behind. For instance, the SASB announced a new project for reporting on the use of plastics in certain industries. By itself, this seems innocuous enough. However, these initiatives have implications. Several years ago I wrote a post on how the banning of plastic straws has impacted the disabled. That post can be accessed here. Perhaps a more humane disclosure would include the impact on the disabled where applicable? Similarly, the expanded human capital disclosures don’t seem to include any disclosure about the number of disabled personnel a company employs. Shouldn’t that be considered by the VRF as well?
As Gandhi said, “The true measure of any society can be found in how it treats its most vulnerable members.” Perhaps this is a lesson the VRF should take to heart as it promulgates reporting standards about what truly creates corporate value.