Applying Social and Human Capital Accounting

Learn how you can use social and human capital accounting to strengthen business performance, enhance decision making and become better equipped for the future

BACKGROUND

The relevance of social and human capital accounting

Social and human capital accounting is about people and relationships. It captures the impact of organizations on people and society – and the impact of people and society on organizations. This covers issues as varied as staff recruitment and retention; community relations; social trends such as urbanization; and your organizational reputation.

People and relationships are major drivers of value and how well businesses can perform. Enhancing the value of social and human capital is a way for organizations to strengthen their business performance, make better decisions and ensure that they are well equipped for the future.

Investing in social and human capital

To get the most out of social and human capital you need to invest in developing it. Investing well  involves understanding what these capitals mean for your organization and how to factor them into business decisions.

This is where social and human capital accounting comes in. With this approach, you can put numbers against the most significant issues for your organization so that you can more readily include them in decision making.

Finance functions can play a vital role. Financial skills in managing systems and controls, analysing data and preparing management reports are all needed to apply effectively and embed social and human capital accounting.

One of the challenges that organizations face is that the approaches for valuing social and human capital are not as well developed as those for other capitals (such as financial capital or natural capital). Our resources can give you the tools to get started.

What next

We have a range of practical resources – including guidance, tools and examples – to help you use social and human capital accounting in your business decisions.

Start with our Essential Guide to Social and Human Capital Accounting, video introduction and maturity map. These offer a clear and practical guide to how it works and the benefits, challenges and tools for using this approach.

For a comprehensive walkthrough, download worked examples from three members of the Canadian Chapter of the A4S CFO Leadership Network. These in-depth examples describe what they’ve done, including specific methods for calculating social and human capital.

GUIDANCE AND OTHER RESOURCES

ESSENTIAL GUIDE TO SOCIAL AND HUMAN CAPITAL ACCOUNTING

See our practical guidance for advice, tools and examples on how to integrate social and human capital accounting into your business decisions

SOCIAL AND HUMAN CAPITAL ACCOUNTING MATURITY MAP

Use our maturity map to assess where you are now and see how you can work towards integrating social and human capital accounting into decision making

LEARN FROM OTHERS

WORKED EXAMPLE: BROOKFIELD ASSET MANAGEMENT

See how Brookfield used social and human capital accounting to measure its team’s contribution to business success and value creation

WORKED EXAMPLE: THE CO-OPERATORS GROUP

See how The Co-operators Group used social and human capital accounting to assess whether to invest in a mental health initiative for the workplace

WORKED EXAMPLE: MANULIFE FINANCIAL CORPORATION

In March 2017, the Canadian Chapter of the A4S Chief Financial Officer Leadership Network was launched in partnership with CPA Canada. The A4S CFO Leadership Network is a global network that brings together a group of leading CFOs from large organizations seeking to embed the management of environmental and social issues into business strategy and processes, and is currently the only Network of its kind.
For its first project, the Canadian Chapter members implemented learnings from the A4S Essential Guide to Social and Human Capital Accounting, which was published 
in May 2017 and is available on the A4S website.

See how Manulife used social and human capital accounting to understand the return on human capital from investing in a technology training programme