In 2022, Capitals Coalition launched our first free online course, Valuing Nature and People to Inform Decision-Making, followed in 2023 by Transforming Business: Valuing Social and Human Capital. Now, Capitals Coalition and two strategic advisors from INSEAD have conducted a study to measure the skills and knowledge gap in business professionals in sustainability and the capitals approach to transform decision-making.
The study aimed to identify areas in which decision-makers need to invest in enhancing their team’s skills. The research was conducted over two months through semi-structured interviews with 15 different organisations across the U.K., Australia, Switzerland, Belgium, U.S. and the Netherlands. These interviews included consultants, accounting/corporate finance professionals, and sustainability technical experts.
The study revealed that most companies are in the early stages of integrating natural, human, and social capital impacts into their decision-making processes. Due to regulation, emission taxes, and public awareness of these issues climate change and decarbonization were the primary focus. Natural capital understanding is more advanced than human and social capital across the businesses included, especially in industries such as mining, agriculture, forestry and utilities. The results showed organisations in developing countries are more attuned to natural and social capital approaches due to direct environmental challenges across their operations.
Companies are facing many challenges as they move towards adoption, including a lack of understanding of integrated capital assessments, resource constraints, a focus on compliance, a lack of incentives, and data limitations. Interviewed companies struggled with understanding materiality and quantifying the impact of non-financial capitals on their businesses. Additionally, regulatory compliance took precedence over holistic, systematic assessments of capital impacts.
These companies also found it challenging to prioritize and quantify material impacts. There is a need for upskilling focused on reporting processes, setting targets, benchmarking, decarbonization, biodiversity, and navigating available datasets.
The results showed that companies value training materials like case studies, data insights, and practical applications linked to mandatory disclosures. The training delivery models explored included train-the-trainer approaches (a decentralized approach designed to upskill, share knowledge and build capacity of businesses and institutions, so they can deliver high-quality trainings to their audience) and direct-to-market strategies. Online training formats were preferred for maximum reach, focusing on simplicity and interaction. Continuous professional development (CPD) and accreditations were considered, emphasizing collaboration with reputable institutions and transparent feedback from accredited participants.
Six key recommendations were proposed to enhance Capitals Coalition’s education offerings based on the research findings:
Clarify Value Proposition: Recommendation to clearly demonstrate the value of an integrated capitals approach, emphasizing benefits like competitive advantage, reduced risks, and improved performance.
Emphasize Relevance: Recommendation to link the training content with current business priorities, such as climate change mitigation and regulatory compliance, to highlight its practical relevance.
Tailor Training: Recommendation to customize training for different audience segments, including c-suite and influencers in specific sectors/geographies. Focus on the ‘why’ for decision-makers and the ‘how’ for implementers.
Strategic Collaborations: Recommendation to extend reach through a ‘train-the-trainer’ approach, embedding modules into existing curricula.
Modular Structure: Developing modular programs with core content and optional modules would make the approach more accessible.
Hybrid Delivery: A recommendation to utilise a combination of in-person, live online sessions and recorded content. In-person sessions are recommended for board level and c-suite executives.
Based on the above key findings and recommendations, the Coalition plans to begin developments of two new capacity building projects:
- An accredited train-the-trainer program will be piloted in 2024 to allow for institutions to be accredited as trainers to deliver a continuous professional development course.
- A continuous professional development course that will allow business professionals to undergo training in two areas: natural capital accounting and assessments and multi-capital accounting and assessments.