Tag: SASB

SASB presents new bulletin on human capital disclosure

In August, the SEC amended the Reg S-K disclosure requirements related to the descriptions of business, legal proceedings and risk factors. Probably the most significant change was the enhancement of the disclosure requirement for human capital, a topic that has recently been front-burnered by the impact of COVID-19 on the workforce. The amended rule requires companies to disclose, to the extent material, information about human capital resources, including any human capital measures or objectives that the company focuses on in managing the business. The new human capital disclosure requirement largely reflects the SEC’s historic “commitment to a principles-based, registrant-specific approach to disclosure” that is “rooted in materiality.” (See this PubCo post.) To emphasize that the requirement was “principles-based” did not mean that disclosure of vague generalities would suffice. Rather, in his Statement regarding the amendments, SEC Chair Jay Clayton remarked that, while the SEC was not prescribing “specific, rigid metrics,” under the principles-based approach, he did “expect to see meaningful qualitative and quantitative disclosure, including, as appropriate, disclosure of metrics that companies actually use in managing their affairs.” Although the principles-based approach offers the benefit of flexibility to allow disclosure to be adapted to each company, nevertheless, the absence of any prescriptive element left many companies searching for how best to address human capital disclosure. Now, independent standard-setting organization SASB, the Sustainability Accounting Standards Board, has issued a Human Capital Bulletin that summarizes the elements of the SASB Standards that relate to human capital and provides an overview of selected human capital-related topics and metrics that apply across all 77 SASB industry standards.