The Bruce Column — Social and human capital accounting starts to accelerate change
Jun 29, 2017
It has been a slow burner. But, as our regular columnist Robert Bruce reports, the changed thinking that is being brought about by social and human capital accounting is now starting to take off. A new Guide issued by the CFO Leadership Network provides the details required to put it into action and practical examples.
There is a time when everything suddenly comes into focus. This is what appears to be happening in the field of social and human capital accounting. The business benefits are becoming clear and the practical ways to achieve them are moving into the mainstream. Social and human capitals are, inevitably, seen as more subjective than other capitals like financial, natural and manufactured capitals. It was always going to take more time before they reached broad acceptance and ease of practical usage. But the launch and publication of the CFO Leadership Network’s Essential Guide to Social and Human Capital Accounting, under the aegis of the Prince of Wales’ Accounting for Sustainability project, looks to be the long-awaited catalyst. It provides the tools and the guidance but, more importantly, it details case studies of what businesses have already achieved. This is the body of practical experience that organizations and business need.
It is a question of recognizing the role of social and human capital accounting, measuring its effects, and bringing it forward into decision-making. Done properly this creates a revolution. Previously unseen figures and factors change the thinking around a business. Examples abound in the Guide. British Land tackled skill shortages. National Grid invested in employee wellbeing and found that for every £1 invested it was getting back more than £2 return in reduced sickness absence costs. The Crown Estate set up a partnership to help jobseekers into sustainable employment. It produced some £40m of societal value through savings on welfare and tax credits, increased tax and national insurance payments, and boosting local economies. All of these came from looking at the business from a different standpoint, through a new lens.
Read the entire column on our Global IAS Plus website.