Published 4 years ago.
About a 3 minute read.
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Human capital issues increasingly important area for corporate leadership, as market participants call for greater transparency. Current disclosure largely lacking on gender pay equity, diversity & inclusion, paid parental leave, and other policies important to US workers.
Companies demonstrating greater transparency around key workplace policies
prioritized by people in the US generate a measurably higher Return on Equity,
published today by JUST Capital. The research supports the case that investing
in workers can and should be a win-win for companies and their employees.
JUST Capital analyzed 890 of the largest public US companies, reviewing
corporate social responsibility reports, company websites and other public data
sources to assess each company’s disclosure of nine key workplace policies:
gender pay analysis, diversity and equal
policies, diversity and equal opportunity targets, paid time off,
paid parental leave, day care services, flexible working hours,
career development and tuition reimbursement. The policies reflect nine
of the top worker metrics that the US public identified in JUST Capital’s
surveys of more than 81,000 respondents over the last four years.
Despite calls from investors, policymakers and the general public for greater
transparency on these human
issues, only 18 of America’s 890 largest public companies, or 2 percent,
disclose information on the nine workplace policies.
“Disclosure is a critical step toward enabling the market to properly benchmark
performance and reward leadership on these important workplace policies,”
said Martin Whittaker, CEO of JUST Capital. “Americans have consistently
said that worker treatment is their top priority when it comes to just business
behavior. The good news is that, for those companies that do invest in their
workers, we are seeing a strong relationship with higher returns.”
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JUST Capital’s analysis found that, for eight of the nine policies analyzed,
companies that publicly disclosed those policies generated a measurably
higher 5-year median ROE, specifically between 1.2 percent and 3
percent, compared to companies that did not disclose these policies. Out of
the 890 companies analyzed:
86 percent disclose diversity and equal opportunity policies, and have
an ROE advantage of 2.5 percent.
85 percent disclose paid time off policies, but did not have an ROE
68 percent disclose tuition reimbursements (ROE advantage of 1.2
72 percent disclose career development policies (ROE advantage of 1.4
45 percent disclose that they provide flexible working hours (ROE
advantage of 2 percent).
28 percent provide detailed disclosures of their paid parental
leave policies (ROE advantage of 2.2 percent).
23 percent disclose that they provide day care services (ROE advantage
of 2.5 percent).
11 percent disclose diversity and equal opportunity targets (ROE
advantage of 2.4 percent).
7 percent disclose results of their gender pay equity analysis (ROE
advantage of 3 percent).
18 “Win-Win Companies” disclosed on all nine policies, demonstrating a
commitment to transparency around these human capital issues:
3M, Alliance Data Systems,
Boston Scientific, Eli Lilly, Goldman Sachs, Hasbro,
Intel, Jones Lang LaSalle,
Marriott, Nike, NVIDIA,
PepsiCo, Qualcomm, State
Street, Symantec, Texas Instruments and Wells Fargo.
In addition to the analysis, JUST Capital’s “Win-Win of JUST Jobs”
an interactive JUST Jobs Policy Tracker, which can be sorted by industry and
issue, and details a disclosure assessment for each of the nine workplace
policies for all 890 companies that JUST Capital tracks as part of its
annual rankings. The goal of the project is
to enable corporate leaders, investors, workers and other stakeholders to
quickly understand the state of disclosure today, and identify ways to drive
more transparency and workforce investment that better reflect the priorities of
the American people.
The analysis comes weeks after the Securities and Exchange Commission’s
Investor Advisory Council urged the commission to consider applying human
capital disclosure requirements on public companies, stating, “For many of the
most dynamic companies, human capital is their primary source of value” and is
“increasingly conceptualized as an investable asset.”
Published Apr 17, 2019 8am EDT / 5am PDT / 1pm BST / 2pm CEST