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Measuring the value of human capital

9 MIN REPORT

Matt Lanstone
Head of ESG Research and Investing
Emma Doner
ESG Senior Manager

The skills, knowledge and experience of the people involved in a company can drive growth


Social issues are the S in ESG (environmental, social and governance), and our ESG research recognizes the materiality of human capital. Our analysis has identified some key aspects of human capital that are especially important. For instance, how does management attract, develop and retain the right people? Is there a diverse culture, and are there positive labor relations?


Quantitative data is critical, but a lack of transparency makes it difficult to effectively measure human capital management. Disclosure is sparse and inconsistent when it comes to key indicators like compensation, diversity, training programs or safety records.


Most industries will be materially affected by ongoing human capital trends, if not experiencing the impacts already. Increased systematic human capital disclosures are an opportunity to understand and identify those companies able to create a competitive advantage.


In this report, Matt Lanstone, Capital Group's head of ESG research and investing, and Emma Doner, ESG senior manager, identify five essential indicators to measure human capital and explore examples of recent trends that can help or hurt a company's value.


Measuring the value of human capital

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Published on November 16, 2021

Matt Lanstone is a global head of research and investing in ESG with 29 years of industry experience (as of 12/31/2021). He holds a bachelor’s degree first class in economics and accounting from the University of Bristol. 

Emma Doner is an ESG senior manager with 9 years of industry experience (as of 12/31/2021). She holds an MBA in finance & sustainable development from ESLSCA in Paris, France and a bachelor’s degree in international business management from Missouri State University.

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