Prince Charles’ group offers guide to accounting for social and human capital
The Prince of Wales' Accounting for Sustainability Project (A4S) Chief Financial Officer Leadership Network has produced a new guide to help finance professionals consider social and human capital when making decisions.
The guide was written by financial professionals from companies such as Burberry, Sainbury’s and Unilever to help their fellow finance pros understand some of the main challenges when organizations undertake social and human capital accounting.
The guide defines social capital as the value added to society by an organization’s products, services and activities, as well as the relationships within and between communities, groups of stakeholders and other networks. Human capital is seen as the knowledge, skills and attributes of the workforce and others across the value chain. They both tie in with the integrated reporting framework.
Organizations often struggle to put a specific value on their contributions to society and investments in people, but taking the time to account for social and human capital can bring important business benefits, according to the guide. The benefits include an improved corporate reputation, stronger stakeholder relationships, better access to and retention of talent, and cost savings. Those factors can ultimately improve business resilience and competitive advantage.
“The finance community has a crucial role to play in helping businesses to understand the value of social and human capital to their organizations,” said A4S executive chairman Jessica Fries in a statement. “It can be a challenge knowing where to start, so this guide is designed to give CFOs and their teams practical advice and tools to account for their impact and dependency on people and society. The case studies in the guide show how organizations have tackled the subject and have reaped the business benefits, while making a valuable contribution to society.”
The guide is available at www.accountingforsustainability.org/social-and-human-capital.