With the U.S. Securities and Exchange Commission (SEC) signaling a possible enhanced focus on the social pillar of environmental, social, and governance (ESG) initiatives among U.S. public companies and two years after the SEC’s 2020 update to human capital disclosure rules, we analyzed the 10-K filings of Russell 3000 (R3000) companies to see what they are reporting on regarding their employees.

SEC Possible 2023 Action on Human Capital – Though one was expected in fall 2022, there has not yet been an official rule proposal from the SEC to further update the 2020 modernization of human capital disclosures, However, the Working Group on Human Capital Accounting Disclosure did submit a petition for rulemaking in June 2022. Their petition calls for meaningful qualitative and quantitative disclosures about human capital management, including enhanced MD&A discussion and tabular reporting of employee pay by categories such as salary, pension, training, and health care costs. Any discussion of human capital management transparency also includes considerations about reporting on diversity and inclusion, turnover, benefits, and workforce safety.