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What Business Can Learn From the Human Costs of COVID-19

March 01, 2021 |
Worker in restaurant wearing face mask

This article was originally published on GreenBiz

“As companies slowly emerge from COVID and more people return to work in person, which ratings, rankings and internal work can help leadership?

Rating agencies typically look at lagging indicators, such as the number of fatalities, accidents or cases of medical treatment, noted Malcolm Staves, corporate health and safety director at L’Oreal. “What really matters, though, is how efficient and effective and agile your system is in how you respond to a crisis like COVID, how you respond to a situation at work. And for that, you need leading indicators.”

…However, the phrase “human capital” can be insensitive given that corporate accounting systems treat people, receiving wages and benefits, as a liability, Wallace of ERM noted. What if people were treated as assets instead? The year-old Capitals Coalition is driving such a view, seeking to unite initiatives to help businesses better value natural, social and human capital.

Its director, Natalie Nicholles, held up Unilever as a positive example for its goal, shared in January, to pay all in its supply chain a living wage by 2030, from offices to factories to farm fields. Yet in general, the lack of depth about ESG factors leaves much to be desired in business, because companies have not had to report on human capital within financial frameworks, experts agreed. New Securities and Exchange Commission requirements demand companies to disclose human capital resources and objectives that are material to a business, but they don’t define what human capital means.

“As a society, we all want companies to be investing in people and nature, and as a way of creating long-term value, not only to the business, because that means profits, but value for stakeholders,” Nicholles said. “And that is a trend that COVID has just absolutely accelerated.””

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