Effective on August 1, 2022, the Value Reporting Foundation consolidated into the IFRS Foundation. At that time, stewardship of the SASB Standards—including all active projects—passed from the SASB Standards Board to the International Sustainability Standards Board (ISSB). The ISSB has committed to building on the SASB Standards and progressing ongoing SASB projects. Any future updates to the SASB Standards resulting from this project will be subject to ISSB due process prior to being finalized.

The information below is intended to provide interested parties with historical information regarding the status of this project at the time of the consolidation.

Project Objective

The purpose of this project is to assess the scope and prevalence of various human capital management themes across SASB’s sectors and within its 77 industries to develop a solid evidenced-based view on this cross-cutting theme. A major component of this project’s objective is to design and implement a systematic analysis by the means of a human capital framework to assess the materiality of these various issues; determine which issues are cross-cutting and which are industry-specific; identifying key general issue categories; and forming recommendations related to advancing this project from the research phase to a standard-setting phase.

Project Background

While human capital is well-represented throughout SASB’s 77 industries, emerging and evolving issues on the theme of human capital have encouraged SASB to escalate research and market engagement focused on the issue. Currently, SASB standards address three relevant, financially-material issues related to human capital management (in industries where sufficient evidence of financial impact and investor interest has been demonstrated): employee health and safety; employee diversity, inclusion, and engagement; and labour practices. While these three areas largely cover relevant and financially-material human capital issues across our standards, other human-capital related issues such as labour conditions in the supply chain and human rights are covered in other areas of the SASB standards. Generally-speaking, human capital management issues that manifest in a company’s supply chain can be addressed under the Business Model and Innovation sustainability dimension under the Supply Chain Management general issue category. Human rights issues related to a company’s operations are generally addressed under the Social Capital sustainability dimension under the Human Rights & Community Relations general issue category. However, as firms become increasingly exposed to technological innovation combined with broader macroeconomic trends of shifting demographics and changing societal values toward human capital, the reevaluation of the standards in context of these evolving and emerging trends is increasingly important.

Transitioned to the ISSB

Next Steps

The research & consultations performed during this project will inform the ISSB’s Consultation on Agenda Priorities, currently scheduled to be released in 2023.

Published Documents

• Revised Preliminary Framework on Human Capital and the SASB Standards – Executive Summary, December 2020 (PDF)
• Revised Preliminary Framework on Human Capital and the SASB Standards, December 2020 (PDF)

Supplemental Materials

SASB Standards Board approves the Human Capital Research Project, October 2019, online blog
SASB Human Capital Project Plan Webinar, March 2020, video
SASB Materiality Assessment and Evidence Sourcing Webinar, March 2020, video
Briefing Document, Understanding How SASB Addresses Human Capital in the Codified Standards, May 2020, PDF
Exploring Diversity & Inclusion in the SASB Standards, September 2020, online blog
Webinar: Human and Social Capital Management: Can disclosure drive substantial change?, December 2020, video
Human Capital Public Consultation Webinar, January 2020, video

Board Meeting Outcomes

July 2021

• Staff presented an update on its work to develop project proposals for the priority tranche of Human Capital, including proposals related to industry-agnostic human capital information, as well as diversity and inclusion
• The Board discussed several areas related to the industry-agnostic human capital information, including:
  • The three areas staff recommended continuing to pursue—including workforce composition, workforce costs, and workforce turnover—as well as the areas where staff recommended exclusively an industry-specific focus (e.g., diversity and inclusion)
  • The level of Board support for the three areas staff recommended continuing to advance, with Board members expressing mixed views ranging from support to concerns; some Board members expressed a need to further understand the rationale behind how the three areas are distinct from the other aspects of human capital information
  • The form this workstream may result in, including a Standard, guidance, activity metrics, or other suggestions for consideration provided by Board members
• The Board discussed the preliminary staff proposal related to standard setting on diversity and inclusion. Board members generally supported the staff analysis and view, which centred on the importance of industry-specificity to produce decision-useful information on diversity and inclusion—including the need for a clear articulation of financial impacts based on industry characteristics.
• Several Board members commented on the potential complimentarity of industry-agnostic information when combined with an industry-specific approach—an area that staff was encouraged to advance

May 2021

• Staff presented a series of proposed project tranches, and recommended prioritisation of those tranches, based on the findings of the Human Capital research project to date. The Board generally supported the staff view, with several areas of discussion centred on the nature, or the prioritisation, of various project tranches.
• The Board expressed general support for prioritising the workplace culture project tranche, which includes diversity and inclusion, though some Board members encouraged a broader focus on workplace culture.
• The Board expressed substantial support for an industry-agnostic workstream centred on broadly applicable, fundamental human capital information needs by investors. While staff clarified that the outcomes of this workstream are uncertain, including any direct implications for the SASB Standards, the Board supported the concept that some fundamental principles related to human capital may benefit from an industry-agnostic approach. Staff further clarified that this workstream does not alter the overall importance of industry-specificity in generating decision-useful information for investors.
• The Board generally acknowledged the staff view that the alternative workforce theme may be best addressed through the other proposed project tranches. However, some Board members encouraged greater prioritisation of this theme based on the significant financial implications of workforce models.
• Staff reviewed the next steps in the project, which consist of presenting the proposed staff work plan to the Board, as well as the initial project(s) related to the priority tranche (workplace culture and industry-agnostic human capital information).

February 2021

• Staff presented a summary of preliminary insights from its public consultation on Human Capital, noting general consensus among all survey respondents on the relevance of the sub-themes outlined in the Preliminary Framework, but varying views on the materiality of these themes by industry.
• Next steps include staff preparing for (a) presenting the full results and analysis of the Human Capital public consultation in the May Standards Board meeting and (b) providing deliverables to the Board for its July meeting, including the revised Human Capital Framework, industry heat map, and an initial set of proposed projects related to human capital.
• These efforts will be supported by staff continuing to engage with the Standards Board on these key themes, particularly around how certain conclusions from the research may result in broad implications for the Standards.

December 2020

• Staff presented an update on the Human Capital research project, including recent developments and progress on the project, the upcoming public consultation period, and key points for Board engagement.
• The Board provided input on various issues related to the preliminary human capital framework, the upcoming consultation period, and recent developments in the market related to human capital.
• Next steps in the project will be to conduct the public consultation period, which includes releasing the revised preliminary framework and three stakeholder-specific surveys. Staff will plan to provide a preliminary update to the Board in early 2021 on the consultation results and how these results could impact future standard-setting activities.

September 2020

• Staff presented a project update on the Human Capital research project, providing detail on key outcomes and insights from the targeted consultation phase. Additionally, staff shared the objectives and scope of the current framework revision phase. Next steps were also shared, specifically on the target date for the public consultation period.
• The Board provided comments on renaming the term “Alternative Workforce” to “Workforce Models” to more objectively reflect a company’s human capital strategy and suggested providing interim guidance based on the US Securities and Exchange Commission’s recent decision on human capital disclosure.
• Next steps in the project will consist of revising the human capital framework based on key findings and developing materials for the public consultation period. The Board will be kept apprised of new developments ahead of the release of any materials intended for public consultation.

December 2019

• Staff provided an update to the Board on the Human Capital Research Project, approved by the Board in the September 2019 Board meeting.
• The staff update and Board discussion centred on the project plan and stakeholder engagement plan.
• No decisions that materially alter the project scope or objectives were made by the Board.

September 2019

• Project added to Research Program

Board Materials

For a full list of past and upcoming Standards Board meetings, as well as associated materials, please visit our Board Meetings Calendar & Archive.

The staff has prepared this summary for informational purposes only. Any Standards Board decisions are tentative and do not change current accounting. Official positions of SASB are determined only after extensive due process and deliberations.