Assess the ‘S’ in ESG - the quality of human capital

Intellectual Capital is an intangible asset comprising human capital, relationship (social) capital, organisational (structural) capital and intellectual property. Human capital has a unique role in that it creates and/or influences the other three components of intellectual capital. This combination of components is an increasingly important aspect considered by investors and is of particular interest to those using environmental, social and governmental (ESG) criteria.

In this article I outline an approach to assessing human, relationship and organisational capital. Intellectual property is already well covered by investors (Howson, 2017) and consequently has been excluded.

The approach generates a ‘Human Capital Report’. This can be used by both HR and non-HR consultants to produce defensible information which has the ability to influence investment decisions.

Used by Consultants (both HR and non-HR), the approach is a way of facilitating a systematic approach to reviewing or establishing a client’s people management strategy and workforce quality. It can be used as a way of providing added value to investor and/or organisation. This could be as part of a comprehensive consultancy assignment or as a standalone product. Anyone interested can gain access online at www.HumanCapital.Report.

Dr. Peter Fargus. CMC. FIC.

Partner at Fargus Consulting Partnership and a Certified Management Consultant