The importance of transparency in information disclosures from organisations cannot be understated, as it influences efficiency, effectiveness and trust. In line with this understanding, there has been a noticeable rise in the public disclosure of human capital information, with increasing rule-making pressures and societal expectations for employers to report this data.
ESG reporting standards have contributed to the push for annual disclosures, setting expectations for organisations regarding their environmental and social responsibilities, as well as leadership accountability. Human capital disclosures specifically fall under the social pillar of ESG, which focuses on organisational behaviours and expectations related to employees, suppliers, and the community.
Organisations have the discretion to determine how they present their human capital disclosures in annual reports. This has led to the increasing use of ESG reports as a means to enhance transparency around diversity, equity, inclusion and accessibility (Deia) initiatives.
The rise in human capital disclosures within ESG reporting reflects a growing emphasis on transparency and accountability in organisations. As stakeholders demand greater awareness of workforce diversity and nuanced Deia practices, organisations are leveraging ESG reports to showcase their programmatic efforts, commitments, and progress.
However, the absence of standardised reporting approaches presents a challenge. The development of tools like the DCI ESG Tracker aims to address this by tracking and analysing human capital disclosure practices across industries. With continued collaboration and insights from organisations, the drive for transparency and meaningful human capital disclosures in ESG reporting will progress further.
