The document summarizes the evolution of social and human capital management and guidance over the past 20+ years. It discusses recent statements by business leaders on the importance of purpose, human capital, and stakeholder interests. It then outlines the development and public consultation process for the Social & Human Capital Protocol, which provides a framework for companies to measure, value and manage their social and human impacts. The Protocol was officially released on February 27, 2019 after incorporating over 300 public comments.

1. The Evolution of
Social & Human
Capital Management
| February 27, 2019

2. The Protocol Structure

3. 20+ Years of Evolving ESG Guidance

5. Examples of Social & Human Capital Interests
Demand & Supply

6. Recent Market Developments
January 2018 – A Sense of Purpose
“Companies must ask themselves: What role do we play in the community? How
are we managing our impact on the environment? Are we working to create a
diverse workforce?”
March 2018 – Investor Stewardship on Human Capital
“Research has consistently shown the importance of human capital to company
performance. Companies included in Fortune magazine’s “100 Best Companies
to Work For” lists earned, over the long-term, excess risk-adjusted returns of
3.5%.”
January 2019 – Purpose & Profit
“Purpose unifies management, employees, and communities. It drives ethical behavior
and creates an essential check on actions that go against the best interests of
stakeholders. Purpose guides culture, provides a framework for consistent decision-
making, and, ultimately, helps sustain long-term financial returns for the shareholders of
your company.”
Investor Activity

7. Human Capital Activity
Evolution of concepts
fair labor
practices; health
and safety;
responsible
contracting and
diversity
20152014
workforce
demographics;
workforce stability;
workforce composition;
workforce skills and
capabilities; workforce
culture and
empowerment;
workforce health and
safety; workforce
productivity; human
rights; workforce
compensation and
incentives
total headcount, “broken
down by the division
between full-time and
part-time employees,
gender, and diversity”;
Annual turnover—
including both planned
and regrettable turnover;
Investment in training,
skills, and professional
development; Employee
engagement score
2016
gender diversity;
employment type, such
as full-time, part-time or
agency workers; staff
turnover; accidents,
injuries and workplace
illnesses; investment in
training and
development; pay ratios
between the highest
paid and median and
lowest quartile workers
across the company;
and employee
engagement scores.
2017
workforce
composition,
unionization, worker
participation in
decision-making, OHS
practices, training and
development and
employee
compensation
policies.
workforce
composition,
worker welfare,
investment in skills
and worker
representation.
Sources: Corporate Disclosure of Human Capital Metrics. October 2017. Retrieved from: https://lwp.law.harvard.edu/files/lwp/files/pension_paper_corporate_disclosure_of_human_capital_metrics_102317.pdf
CSHS Human Capital Project. http://www.centershs.org/human-capital.php
2018

9. The Social & Human Capital Coalition

10. Overview
• Launch of the Social & Human Capital Protocol
• Announcing the updated Social & Human Capital
Protocol
• Understanding market activities around social and
human capital
• Download and apply the Protocol
• Join the Coalition
• Share your case studies
• Spread the word

11. The Social & Human Capital Coalition
The Social & Human Capital Coalition is an initiative which aims to
mainstream the measurement of social & human impacts for business
– shifting the improvement of social & human performance from an
optional extra to a core part of business decision making.

12. The Social & Human Capital
Protocol
The Protocol provides a consistent process
to guide companies through the journey of
measuring, valuing and better managing
social and human capital.

13. Built from
existing best
practice
Targeted
review and
test
Public
consultation
Analysis of
consultation
inputs
Integration
into Protocol
Launch of
updated
Protocol
Public consultation
launched
17/04/2018
Formal consultation
closed in July 2018
Insights from 20
companies 2016
Protocol consultation and review process
Review and release
of Protocol Q4
2016/2017:
Social Capital
Protocol Advisory
Group (20 external
experts)
25 companies tested
the Protocol in their
organizations
Q3/4 2018
Categorize comments
Evaluate validity
Consider options for
update of Protocol
content
Resolution with
Technical Committee
input
Report on resolution
of comments (short
summary)
Feb. 27, 2019
Q/4 2018
Overseen by
Coalition Technical
Director
Approval by
Coalition Executive
Director
Final sign-off by
Coalition Board

14. Board of
Directors

15. Protocol
Technical
Committee
Doug MacNair ERM

16. Online collaboration platform:
>220 registered for the public
consultation online platform
>300 comments on the Protocol
text
Also feeding into the consultation:
>70 further contributor inputs through
workshops
> On-going comments from webinars and
informal communication
Online and in-person feedback
https://collaborase.com/social_human_capital

17. The Protocol Consultation
Key issues
1. Alignment with the Natural
Capital Protocol
2. Definitions - in particular the
definition of “impact”
3. Social and Human Capital
issues
4. Inclusion of “social capital” in
addition to “human capital”
5. Dependency pathways
Industry Service Provider
NGO Academia
Other
>220 registered for the public consultation online platform
>70 reached through in-person workshops
>300 comments on the Protocol text

18. Structural Alignment with the NCP
The steps of the Social & Human Capital Protocol (DRAFT)

19. The Protocol Structure

20. Next steps and engagement opportunities
• Official Release: Wednesday, Feb. 27, 2019
• Download and implement the Protocol in your organization
• Join the Coalition
• Produce a case study
• Lead a sector guide or supplement to the Protocol
Download the Protocol at: https://docs.wbcsd.org/2017/form/scp-download.html
Previous webinars available at: http://social-human-capital.org/introducing-social-human-
capital-coalition/news-events

21. Thank you
Mike Wallace
Interim Executive Director,
Social & Human Capital Coalition
wallace@social-capital.org
Partner, BrownFlynn, an ERM Group
company
mikew@brownflynn.com