Principles of People

Principles of People

Core People Metrics

Dignity and equality

Diversity and inclusion (%)
Percentage of employees per employee category, per age group, gender and other indicators of diversity (e.g. ethnicity)

Gender, ethnic and cultural diversity, particularly within executive teams, continues to be correlated to financial performance across multiple countries worldwide. What drives this correlation is that more diverse companies are better able to innovate, attract top talent, improve their customer orientation, enhance employee satisfaction and secure license to operate.
Companies that focus on improving the representation of a diverse workforce and effectively utilize inclusion and diversity as an enabler to develop their talent can reap tangible and intangible benefits.

GRI 405-1 (b)

Dignity and equality

Pay equality
Ratio of the basic salary and remuneration for each employee category by significant locations of operation for priority areas of equality: women to men; minor to major ethnic groups; and other relevant equality areas

Inclusion and diversity can only be achieved by promoting equal pay and by providing equal remuneration for the same jobs, in order to address social disparity and to maximize professional opportunities for all people irrespective of gender, color, caste, creed, religion and other diversity aspects.
Organizations in which imbalances exist expose themselves to reputational and legal risk, based on racial and other discrimination.

Adapted from GRI 405-2

Dignity and equality

Wage level (%)
1.Ratios of standard entry-level wage by gender compared to local minimum wage
2.Ratio of CEO’s total annual compensation to median total annual compensation of all employees (excluding the CEO)

Fair compensation and benefits contribute to the economic well-being of workers since the distribution of wages and income is crucial for eliminating inequality and poverty.
A wide gap between the CEO compensation and the median reinforces inequality and could impede long‑term value creation. Depending on how the organization is structured, it can become a crucial aspect for investors to make appropriate decisions.

GRI 202-1, UK Companies (Misc. reporting) regulations 2018, Dodd-Frank Act

Dignity and equality

Risk for incidents of child, forced or compulsory labour
An explanation of the operations and suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour. Such risks could emerge in relation to type of operation (such as manufacturing plant) and type of supplier; or countries or geographic areas with operations and suppliers considered at risk.

Child, forced or compulsory labour is a violation of fundamental human rights and has been identified as hindrance to development. There is a strong link between household poverty and child labour, which can also trigger to lower the standard of living across the generations.
The ripple effects arising from these issues can translate into legal and reputational risk for the companies, especially those with extensive value chains.

GRI 408-1 (b), GRI 409

Skills for the Future

Training provided (#)
1.Average hours of training per person that the organization’s employees have undertaken during the reporting period, by gender and employee category (total number of trainings provided to employees divided by the number of employees)
2.Average training and development expenditure per full time employee.

Skilled employees enhance a company’s human capital and contribute to employee satisfaction, which correlates strongly with improved performance.
Building human capital to secure a motivated, productive and skilled workforce is a key priority for companies. When firms fail to invest in training, education, skilling and reskilling of their employees, it can affect their business performance, reputation and ability to attract talented workforce. It can also lead to higher operating costs related to recruiting, developing and retaining employees.
Significant investment in training and development across all levels of the workforce will serve as a testament to the organization’s commitment on learning and development for all employees and supports the agile transformation of the companies.

GRI 404-1, SASB HC0101-15

Expanded People Metrics

Dignity and equality

Pay gap (%)
1.Mean pay gap of basic salary and remuneration of full-time relevant employees based on gender (women to men) and indicators of diversity (e.g. BAME to non-BAME) at a company level or by significant location of operation.
2.Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country

The Pay Gap metric is considered an indicator of organizational structural inequality and under-representation of disadvantaged groups in senior and higher paid roles. Research has shown that women and people from ethnic minorities tend to earn less and be in less senior roles. This is often associated with social disadvantage and is arguably also caused by discrimination. A migrant workforce may have a poor command of the local language, possess qualifications that are not generally recognized by employers and be unfamiliar with the regional culture; these factors affect pay and position.
A wide gap between the highest paid individual and the median reinforces inequality and could impede long‑term value creation. Depending on how the organization is structured, it can become a crucial aspect for investors to make appropriate decisions.

Adapted from UK Government guidance on gender and ethnicity pay gap reporting,
GRI 102-38

Dignity and equality

Discrimination and Harassment Incidents (#) and the Total Amount of Monetary Losses ($)
Number of discrimination and harassment incidents, status of the incidents and actions taken and the total amount of monetary losses as a result of legal proceedings associated with (1) law violations and (2) employment discrimination.

Organizational culture needs to be built on a foundation of respect, courtesy and professionalism, free from any acts of discrimination, bullying or harassment.
Commitment to eliminating discrimination and harassment in the workplace helps reduce inequalities and promotes organizational cultures that focus on performance and merit, ultimately building competitiveness.

GRI (406-1),
SASBI (FB-FR-310a.4)

Dignity and equality

Freedom of Association and Collective Bargaining at Risk (%)
1.Percentage of active workforce covered under collective bargaining agreements.
2.An explanation of the assessment performed on suppliers for which the right to freedom of association and collective bargaining is at risk including measures taken by the organization to address these risks.

The freedom to associate and bargain collectively are not only rights of employees but are also useful tools for organizations and employees to engage, build trust and negotiate solutions when potential conflicts arise.
Organizations can afford to bridge the widening representational gap by mitigating the risk of rise in potential conflicts. This can be ensured by facilitating decent work environments to the workforce, especially those who perform their jobs in the informal sector.

SASB (CN0401-17), GRI (407 – 1),
WDI – 7.2

Dignity and equality

Human rights review, grievance impact and modern slavery (#, %)
1.Total number and percentage of operations that have been subject to human rights reviews or human rights impact assessments, by country.
2.Number and type of grievances reported with associated impacts related to a salient human right issues in the reporting period and an explanation of impacts.
3.Number and percentage of operations and suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour. Such risks could emerge in relation to a) type of operation (such as manufacturing plant) and type of supplier or b) countries or geographic areas with operations and suppliers considered at risk.

The activities of companies may cause or contribute to environment or social abuses that violate the human rights of individuals, workers and communities. Without a mechanism for employees and other key stakeholders to report human rights violations, companies could miss opportunities to identify and mitigate such underlying issues.
Companies that encourage stakeholders to provide feedback can respond more quickly to misconduct, build trust with their stakeholders and prevent harm to long-term value.
Companies that tend to associate with modern slavery in any form will cause severe damage to reputation, brand and even their license to operate. In consequence it is extremely important for companies to engage with this topic and understand this risk across their value chain.

GRI (412-1), UN Guiding Principles, GRI (408-1 (a)), GRI (409-1), WDI 7.5

Dignity and equality

Living Wage (%)
Current wages against the living wage for employees and contractors in states and localities where the company is operating.

Provision of living wages to employees, companies could help lift households and communities out of poverty. This aspect is a major contributor to achieving the Sustainable Development Goals (SDG’s).
This aspect provides a benchmark for responsible employers who respect human rights and who choose to pay their employees a rate that meets the basic cost of living in the region they operate-in.

MIT Living Wage Tool, EPIC Report, IMP

Health and well being

Monetized Impacts of Work-related Incidents on Organization (#, $)
By multiplying the number and type of occupational incidents by the direct costs for employees, employers per incident (including actions and/or fines from regulators, property damage, healthcare costs, compensation costs to employees).

The cost of work-related accidents and ill-health helps substantiate the business case for investments in occupational health and safety. Having this information available helps management in their decision-making process when it comes to investing in the business.

Adapted Indicator based on European Commission, Safe Work Australia

Health and well being

Well-Being (%)
1.The number and rate of fatalities as a result of work-related ill-health; recordable work-related ill-health injuries, main types of work-related injury; and the main types of work-related ill-health for all employees and workers.
2.Percentage of employees participating in 'best practice' health and well-being programs that help to reduce absenteeism and improve productivity and employee absentee rate (AR) for all employees.

Employee mental well-being directly affects how employees think and feel about their job and organization. Research has consistently shown that employee well-being predicts job attitudes and performance.
Employee well-being has important implications for productivity and work relationships. Having a hygienic and healthy workplace culture contributes to a high-performing organization that is productive and innovative, with employees who are socially integrated.

GRI: 2018 403 – 10 (a & b)
GRI 2016: 403 – 2(a)
Embankment Project

Skills for the Future

Number of unfilled ‘Skilled’ Positions (#, %)
1.Number of Unfilled "Skilled" positions (#)
2.Percentage of unfilled "skilled" positions for which the company will hire unskilled candidates and train them. (%)

The rapid changes in global markets and business models including technology have given way to a rise in skills gaps. It is imperative for the organization to identify skill gaps and train its employees to bridge the gap. For several reasons it is paramount for organizations, society and investors alike to measure the effects of available skills and learning.
Investing in training programs will help the organization fill vacant skilled positions thereby improving productivity and reducing employee turnover.

WBCSD (Measuring Impact Framework Methodology Version1.0 (2008)

Skills for the Future

Monetized Impacts of Training - Increased earning capacity as a result of training intervention (%, $)
1.Investment in training a percentage (%) of payroll.
2.Effectiveness of the training and development through increased revenue, productivity gains, employee engagement and/or internal hire rates.

Training does affect valuation and financial performance and create pressure for change. For organizations, it could mean a leverage for innovation and a tool to manage human capital and a measurement to improve performance.
Investment in training enhances the intellectual capital of an organization. Providing training that is adequate and relevant to the job leads to the enhancement of human capital and has a direct impact on financial capital.

OECD, United Nations, WDI 5.5

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