This document summarizes a presentation about the need for the Social & Human Capital Protocol. It discusses the evolution of environmental, social and governance guidance over the past 20 years. It outlines increasing investor demand for ESG performance data. The presentation describes recent corporate and investor activity related to social and human capital topics. It provides an overview of the Social & Human Capital Coalition and its goal to standardize social and human impact measurement and valuation for businesses. The Coalition is developing a protocol to guide companies in measuring, valuing and managing their social and human impacts.

1. The need for the
Social & Human
Capital Protocol
37th Bi-Annual Corporate Affiliates
Executive Workshop
AHC Group
Mike Wallace – Partner, BrownFlynn, an
ERM Group company
Interim Executive Director, Social & Human
Capital Coalition
| January 24, 2018

2. 20+ Years of Evolving ESG Guidance

3. GRI (1997) - Globally Crowd-Sourced ESG Issues
Environmental
 Materials
 Energy
 Water
 Biodiversity
 Emissions
 Effluents and Waste
 Products and Services
 Environmental Compliance
 Transport
 Supplier Environmental Assessment
 Environmental Grievance
Mechanisms
Economic
 Economic Performance
 Philanthropy
 Market Presence
 Indirect Economic Impacts
 Economic Inclusion
 Procurement Practices
Human Rights
 Non-discrimination
 Freedom of Association & Collective
Bargaining
 Child Labor
 Forced /Compulsory Labor
 Security Practices
 Indigenous Rights
 Supplier Human Rights Assessment
 Human Rights Grievance Mechanisms
Labor Practices
& Decent Work
 Training and Education
 Employment
 Labor/Management Relations
 Occupational Health & Safety
 Diversity & Equal Opportunity
 Equal Remuneration for Men
and Women
 Supplier Assessment for
Labor Practices
 Labor Practices Grievance Mechanisms
Society
 Anti-Corruption
 Public Policy
 Anti-competitive Behavior
 Local Communities
 Supplier Assessment for Impacts on
Society
 Grievance Mechanisms for Impacts on
Society
Product Responsibility
 Customer Health & Safety
 Product & Service Labeling
 Marketing Communications
 Customer Privacy
 Product Compliance
Social & human capital issues are interwoven throughout

4. GHG Protocol (1997)

5. IIRC (2009 / 2010) – Six Capitals

6. SASB (2010 / 2011) – Social & Human Capital

7. Natural Capital Coalition & Protocol (2012 / 2014)

8. SDGs (2015 / 2016)

9. Social & Human Capital Coalition (2016 / 2018)

10. Increasing Investor Demand for ESG Performance

11. UN Principles for Responsible Investment (PRI)
The United Nations-supported Principles for Responsible Investment (PRI) Initiative is an international
network of investors working together to put the six Principles for Responsible Investment into
practice. Its goal is to understand the implications of sustainability for investors and support
signatories to incorporate these issues into their investment decision making and ownership practices.
Source: http://www.unpri.org/
$7 $10
$13
$18
$21
$24
$32 $34
$45
$59
$62
$68
$82
63
185
361
523
734
890
1,050
1,186
1,251
1,384
1,501
1,714
1,961
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
UN PRI Growth Over Time
Assets under management (US$ trillion) Number of Signatories

12. UN PRI Signatories
(sample)

13. The ESG Ecosystem

14. A glimpse of the current ESG Ecosystem
Based on sustainability reporting standards and frameworks, there are 100+ organizations producing
lists, rankings, ratings, and scorecards of the “top companies” and “most sustainable” companies.

15. A glimpse of the current ESG Ecosystem
Based on sustainability reporting standards and frameworks, there are 100+ organizations producing
lists, rankings, ratings, and scorecards of the “top companies” and “most sustainable” companies.

16. RiskMetrics Group
buys Innovest
FEB 2009
Thomson Reuters
buys Asset 4
NOV 2009
Bloomberg
buys New Energy
Finance
DEC 2009
GMI and
The Corporate
Library merge
JUL 2010
Vigeo and
EIRIS merge
OCT 2015
MSCI acquires GMI
Ratings
JUN 2014
ISS buys IW Financial
JAN 2017
Morningstar buys
40% of Sustainalytics
JUL 2017
SEP 2009
Sustainalytics and
Jantzi Research
Inc. merge
NOV 2009
RiskMetrics
Group buys KLD
MAR 2010
MSCI buys
RiskMetrics
Group
JUN 2012
Sustainalytics acquires
Responsible Research
SEP 2015
ISS acquires Ethix SRI
Advisors
OCT 2016
Standard & Poor’s
buys Trucost
JUN 2017
ISS acquires South Pole
Group’s Investment
Climate Data Division
ESG Research Market Evolution

17. Examples of Social & Human Capital Interests
Demand & Supply

18. Recent Market Developments
January 2018 – Larry Fink’s Letter to CEOs
“Companies must ask themselves: What role do we play in the
community? How are we managing our impact on the environment? Are
we working to create a diverse workforce?”
March 2018 – Investor Stewardship on Human Capital
“Research has consistently shown the importance of human capital to
company performance. Companies included in Fortune magazine’s “100
Best Companies to Work For” lists earned, over the long-term, excess
risk-adjusted returns of 3.5%.”
October 2018 – BlackRock to Expand Access to ESG Data
“BlackRock projects ETF assets in ESG to grow from $25 billion today to
more than $400 billion by 2028.”
Investor Activity

19. Recent Market Developments
April 2018 – CEO of Salesforce Closes the Gender Pay Gap
“One of the reasons we’re considered such a great place to work (Fortune
rated them #1 this year) is that from the time we founded the company, we
emphasized philanthropy and social responsibility. We pay employees to give
their time to local schools and charities, and we have donated more than
$180 million to non-profits.”
“The World Economic Forum says that it'll take more than 100 years for us to
pay men and women equally.”
“We said we're going pay men and women equally at this company, and
we're going to go through and level set every job, every division, and every
department. We’re going make sure that we have gender equality.”
“It cost us about $3 million for us to do those adjustments the first year.”
Corporate Activity

20. Investors & Human Capital

21. Human Capital Activity
Evolution of concepts
fair labor
practices; health
and safety;
responsible
contracting and
diversity
20152014
workforce
demographics;
workforce stability;
workforce composition;
workforce skills and
capabilities; workforce
culture and
empowerment;
workforce health and
safety; workforce
productivity; human
rights; workforce
compensation and
incentives
total headcount, “broken
down by the division
between full-time and
part-time employees,
gender, and diversity”;
Annual turnover—
including both planned
and regrettable turnover;
Investment in training,
skills, and professional
development; Employee
engagement score
2016
gender diversity;
employment type, such
as full-time, part-time or
agency workers; staff
turnover; accidents,
injuries and workplace
illnesses; investment in
training and
development; pay ratios
between the highest
paid and median and
lowest quartile workers
across the company;
and employee
engagement scores.
2017
workforce
composition,
unionization, worker
participation in
decision-making, OHS
practices, training and
development and
employee
compensation
policies.
workforce
composition,
worker welfare,
investment in skills
and worker
representation.
Sources: Corporate Disclosure of Human Capital Metrics. October 2017. Retrieved from: https://lwp.law.harvard.edu/files/lwp/files/pension_paper_corporate_disclosure_of_human_capital_metrics_102317.pdf
CSHS Human Capital Project. http://www.centershs.org/human-capital.php
2018

22. U.S. Securities & Exchange Commission (2017)
A sample of some of the influential and global participants:
• LouiseDavidson,CEO, Australian Councilof SuperannuationInvestors
• MartinWhittaker,CEO, JUST Capital
• ScottConnolly, Assistant Secretary, Australian Councilof Trade Unions
• Kerrie Waring,ExecutiveDirector,and Joyce Haboucha,Co-Chair,Disclosureand Transparency
Committee;InternationalCorporateGovernanceNetwork
• Jeffrey P. Mahoney, General Counsel,Councilof InstitutionalInvestors
• Ken Hall, General Secretary-Treasurer, InternationalBrotherhoodof Teamsters
• CatherineHowarth,ChiefExecutive, ShareAction
• Denise L. Nappier,State Treasurer, State of Connecticut
• Gary Yee, BoardChair,BritishColumbiaMunicipalPensionBoardof Trustees
• HeatherSlavkin Corzo,Director,Corporationsand CapitalMarkets,AFL-CIO
• Josh Zinner,ChiefExecutiveOfficer, InterfaithCenter onCorporateResponsibility
• MichaelW.Frerichs,State Treasurer of Illinois
• RonaldB. McKinley, Chair, ISOTC/260
• Paul Kearns, Chair,MaturityInstitute
• Anne Simpson,InvestmentDirector,SustainableInvestments,CaliforniaPublicEmployees Retirement
System (CalPERS),and Anne Sheehan,Directorof CorporateGovernance,CaliforniaStateTeachers'
RetirementSystem (CalSTRS)
Rulemaking Petition - https://www.sec.gov/comments/4-711/4-711.htm

24. Social & Human Capital Data

25. Social & Human Capital Topics in Bloomberg
Social Human Capital
Employees
Employee Turnover %
Number of Part-Time Employees
Number of Temporary Employees
Number of Contractors
Employee Diversity
% Women in Management
% Women in Workforce
Gender Pay Gap Breakout
Percentage Gender Pay Gap for Senior Management
Percentage Gender Pay Gap Mid & Other Management
Percentage Gender Pay Gap Employees Ex Management
% Gender Pay Gap Tot Empl Including Management
% Minorities in Management
% Minorities in Workforce
% Disabled in Workforce
Community & Customers
Community Spending
Community Spending/Profit Before Tax
Community Spending Percentage of EBITDA
Community Spending Percentage of Total Equity
Number of Customer Complaints
Supply Chain
Number of Suppliers Audited
Number of Supplier Audits Conducted
Social Supply Chain Management
Number Supplier Facilities Audited
Sustain Sup Guidelines Encomp ESG Area Pub Disclsd
Employees
Number of Employees - CSR
% Employees Unionized
Employee Average Age
Policies
Health and Safety Policy
Equal Opportunity Policy
Human Rights Policy
Training Policy
Business Ethics Policy
Fair Remuneration Policy
Employee Protection / Whistle Blower Policy
Anti-Bribery Ethics Policy
Policy Against Child Labor
Accidents & Fatalities
Workforce Accidents - Employees
Lost Time from Accidents
Fatalities - Contractors
Fatalities - Employees
Fatalities - Total
Lost Time Incident Rate
Fatalities - Third Party
Fatalities per 1000 employees
Accidents per 1000 employees
Lost Time per Employee
Total Recordable Incident Rate
Total Accidents - Contractors
Lost Time Incident Rate - Contractors
Total Recordable Incident Rate - Contractors
Employee Training
Employee CSR Training
Employee Training Cost
Total Hours Spent by Firm - Employee Training
Training Spending per Employee
Other
Sustainable Investment/Capital Expenditures
Source: Bloomberg. Metrics as of 8/7/2018
Overlap

26. ESG Scores & Comparisons (Mining Sector)

27. Environmental Metrics (Mining Sector)

28. Social Metrics (Mining Sector)
Source: Bloomberg data accessed 9/20/18

29. Governance Metrics (Mining Sector)

30. The Social & Human Capital Coalition

31. The Social & Human Coalition and Protocol
The Social & Human Capital Coalition is an initiative which aims to
mainstream the measurement of social & human impacts for
business – shifting the improvement of social & human
performance from an optional extra to a core part of business
decision making.
The Protocol serves two purposes:
• It provides a consistent process to guide companies through
the journey of measuring, valuing and better managing social
and human capital.
• It provides a framework for collaboration to harmonize the
currently fragmented landscape of social & human impact
measurement and valuation, and to move towards
standardized approaches for business.
The phrase “Social & Human Capital” is being defined through a
public comment process that was launched on April 17, 2018.

32. Protocol consultation and review process
Built from
existing best
practice
Targeted
review and
test
Public
consultation
Analysis of
consultation
inputs
Integration
into Protocol
Launch of
updated
Protocol
Public consultation
launched 17/04/2018
Formal consultation
closed in July 2018
Insights from 20
companies in 2016
Review and release
of Protocol – Q4
2016/2017:
Social Capital Protocol
Advisory Group (20
external experts)
25 companies tested
the Protocol in their
organizations
Q3/4 2018
Categorize comments
Evaluate validity
Consider options for
update of Protocol
content
Resolution with
Technical Committee
input
Report on resolution of
comments (short
summary)
Q/4 2018
Overseen by Coalition
Technical Director
Approval by Coalition
Executive Director
Final sign-off by
Coalition Board
Q1 2019

33. Board of Directors
• Peter Bakker, CEO, World Business Council for Sustainable Development (WBCSD) (Board Chair)
• Pavan Sukhdev, President, WWF International
• Sharan Burrow, General Secretary, International Trade Union Confederation (ITUC)
• Cécile Duflot, Director General, Oxfam France
• Mark Gough, Executive Director, Natural Capital Coalition (NCC)
• Kathy A. Seabrook, Chair, Center for Safety & Health Sustainability (CSHS)
• Jeremy Nicholls Former CEO, Social UK and Social Value International
• Martine Durand, Chief Statistician and Director of Statistics and Data, Organisation for Economic Co-Operation and
Development (OECD)
• Victor van Vuuren, Director Enterprises, International Labour Organization (ILO)
• Richard Howitt, CEO, International Integrated Reporting Council (IIRC)
• Additional Board Members TBD

34. Technical Committee

35. Outreach & Engagement
• Distribution list: >1,300
• Coalition Webinars: >100 participants at each webinar
• Joint Statements: x4 key partners
• International Integrated Reporting Council
• Natural Capital Coalition
• Roundtable of Product Social Metrics
• Social Value International
• Article Distribution >100,000
• Follow us on Twitter @shcCoalition

36. Structural Alignment with the NCP
The steps of the Social & Human Capital Protocol (DRAFT)

37. Thank you
Mike Wallace
Executive Director, The Social & Human Capital Coalition
wallace@social-capital.org
Partner, BrownFlynn, an ERM Group company
mikew@brownflynn.com