February 12, 2021

Ms. Kelli Okuji-Wilson
Sustainability Accounting Standards Board
1045 Sansome Street, Suite 450
San Francisco, CA 94111

Dear Ms. Okuji-Wilson:

We appreciate the opportunity to comment on the SASB’s Human Capital Research Project to assess the scope and prevalence of various human capital management themes.

The SASB has proposed a Human Capital Framework (the Framework) which we understand is designed to serve as an overarching guideline to establish consistency in how human capital metrics are evaluated within the 77 industry standards. However, not all individual industry standards address human capital and 27 industry standards currently lack disclosures of human capital-related risks and opportunities. Further, each industry may design its own human capital standards. As noted in our response to the SASB’s Conceptual Framework, we believe human capital is one of the topics for which stakeholders may prefer to have comparable disclosures from companies with common risks, attributes, activities, or businesses, regardless of their industry classification. We support the development of a broad framework and related metrics that could be applied across industries to better address evolving and emerging human capital issues. We believe human capital is a topic that could reasonably be assumed to be material to all companies, and we recommend that the SASB provide minimum metrics or qualitative disclosures related to some aspects of human capital to be considered by all companies if material to understanding their strategy. This would appear to align with the approach adopted by the US SEC with regard to its new requirement for registrants to provide a description of human capital resources, including in such description any human capital measures or objectives that management focuses on in managing the business, to the extent material to an understanding of the registrant’s business. If material, the same principles-based requirement is to be applied by all registrants, regardless of industry. Industry specificity in the SASB’s standards could be reserved for when a given risk or focus area is applicable only to one or a small number of industries.

We appreciate that the SASB has considered how risk related to human capital is broader than what is envisioned solely within the Human Capital Sustainability Dimension. We agree that the general interest categories within other dimensions (e.g., Supply Chain Management within Business Model & Innovation and Human Rights & Community Relations within Social Capital) are equally relevant to providing investors with a comprehensive view of management’s human capital-related policies, practices, and metrics. However, it may be helpful to have the guidance on all human capital-related issues collocated within one dimension. We believe this will also encourage companies to combine their human capital-related disclosures in one location, which would provide stakeholders with a more comprehensive analysis.

See the appendix for our comments in support of the SASB’s preliminary conclusions related to (1) mental health, wellbeing, and health-related benefits, (2) workplace culture, (3) workforce investment, and (4) labor conditions in the supply chain. However, we do not believe that the preliminary conclusion related to the increased prevalence of an alternative workforce is sufficiently clear. We believe further detail is required to communicate how the SASB envisions disclosures related to an alternative workforce and its connection to sustainability issues. While we agree that the SASB’s research supports that this shift in the workforce has occurred, we are concerned that its impact is not sufficiently detailed such that it would serve as an effective component of the Framework.

In addition, we are concerned that separating issues related to the alternative workforce creates the impression that the other human capital metrics and disclosures are not meant to address this element of the workforce, when in fact, many of the concerns raised in the other conclusions are applicable to all employees, whether they be permanent, temporary, freelance, contract, or other.

If there are elements of the framework the SASB believes are specific to personnel that are part of the alternative workforce, and if the SASB retains the alternative workforce as a separate theme, we believe additional details should be provided on the possible business implications and that the guidance clarify that they are incremental to the requirements applicable to the workforce as a whole. This will help ensure consistency in how this theme is interpreted in industry standard-setting projects.

Separately, we note that this and other responses to the proposed Framework are designed to be for the SASB’s internal use only. While we appreciate the value of informal outreach and input, we encourage the SASB in future projects to make feedback publicly available. The proposed Framework is intended to support future standard setting. Not only is transparency a fundamental tenet of the SASB’s stated standard setting process, but making third-party commentary available to all can help enable a broader understanding of issues and support informed decisions. We also believe the questions on which the SASB is seeking feedback should be embedded in the proposal, akin to how the exposure drafts of sustainability standards are structured. The use of a survey tool may inhibit respondents and does not offer the responder the ability to give thoughtful consideration before submitting a reply. We note the prior public requests for comment on draft standards have received minimal responses and suspect non-public responses are similarly limited. It is important to consider broad input on all facets of the standard setting process to identify concerns that may be specific to a particular type of entity or industry. Otherwise, the SASB needs to make assumptions about industry applicability and materiality. Additional accessibility to the questions and more traditional public written responses may inspire an increased response rate.

We would be pleased to discuss our comments or answer any questions. Please contact Heather Horn at heather.horn@pwc.com, Andreas Ohl at andreas.ohl@pwc.com, or Valerie Wieman at valerie.wieman@pwc.com regarding our submission.

Sincerely,

PricewaterhouseCoopers LLP

The SASB’s proposed Framework identified preliminary conclusions on the subject of the following nine themes and sub-themes:

The SASB requested that respondents indicate the primary opportunity for improvement for each theme and sub-theme by marking all responses that apply from the following list.

We agree that each of the sub-themes should be added to/more comprehensively addressed in the SASB industry standards. These are all important developments that merit consideration. The SASB’s research and description of these conclusions provides a reasonable basis to develop complementary metrics and disclosures in future standard setting projects.

We also believe that while some of the sub-themes have been touched on in one or more industry standards, that the performance measurements associated with each of the sub-themes can be designed to be more decision-useful for investment decision-making than it is currently.

Lastly, we do not have an opinion with regard to whether the performance measurements associated with each sub-theme can be designed to be more cost-effective for corporate disclosure. We believe this question is best addressed by members of the preparer community.