January 11, 2019
The International Standards Organization (ISO) has published a final standard establishing guidelines for internal and external human capital reporting, with a goal to "make transparent the human capital contribution to the organization in order to support the sustainability of the workforce.”
The standard is a reflection of the belief by investors and other stakeholders that currently reported metrics do not encapsulate all the measures that drive sustainable performance. As with the previous attempt in 2011-12, the ISO standard aims to create a standard for comparable reporting among companies, despite considerable differences between companies and sectors.
23 external metrics over nine categories: The ISO standard sets guidelines for internal and/or external reporting of metrics in the following categories:
Guidelines only, unless adopted by a government: The standard is a set of guidelines only. However, it does provide a benchmark that external stakeholders can point to when requesting information from companies. It is unlikely that such information will be broadly requested in the near term. However, Lee Webster, the secretariat of the ISO technical committee that adopted the standard (and who also oversaw the earlier U.S.-based effort), recently said: “This document is a first step. It will evolve, and additional definitions and formula will be added in future versions. We’re only at the 50-yard line. There’s still lots more work to do.”