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Improved analysis of human capital found |
The latest evaluation of extra financial analysis produced by investment houses and brokers has found an improvement in the quality of analysis of human capital isssues. The Enhanced Analytics Initiative (EIA) - a coalition of institutional investors with combined assets of $2.6 trillion - records some 'good examples of of systemic and transparent approaches to rarely-covered EFIs such as human capital'.
The EIA conducts a six-monthly survey of research notes and briefings produced by brokers, investment banks and other financial institutions, to identify good practice in integrating extra financial issues (e.g. social, environmental, political risk) within financial analysis. EIA members set aside a portion of their research spend to reward the best providers of analysis. As examples of how labour issues are being better-covered, EIA cites a report from Oddo Securities into how human resource issues may impact on the future of airlines and air service companies, as well as a note from JP Morgan on Finnish utility Fortum. However, in terms of broader and consistent coverage, employee and labour issues lag a long way behind environmental issues, particularly climate change. The evaluation report can be downloaded here. |