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Over the last 70 years, the global economy has shifted from being largely resource-reliant to increasingly driven by highly skilled workers. Technology companies now dominate equity markets, while shifting demographics, automation and artificial intelligence (AI) continue to redefine the role of human capital.
Just as labor markets continually evolve, Calvert continually evolves the lens through which we assess company performance on financially material human capital management issues. This approach feeds into our Diversity, Equity and Inclusion (DEI) research index which aims to identify companies leading in human capital management. The initial focus of this index was on workforce and leadership representation and inclusion, as our research as well as others’ pointed to a strong relationship between diverse workforces and productivity and innovation,1 but the methodology has recently expanded to include additional aspects of human capital management.
Over the past five years, we have seen significant improvement in diverse workforce representation and data availability on DEI across companies globally. Corporate progress on workforce representation and improved data availability—combined with labor market changes driven by a shrinking labor force in key regions, generational shifts and AI—have created new investment opportunities and risks that we want to account for in our investment strategy.
We believe there are four pressing and financially material human capital trends facing companies today and we have expanded our Calvert DEI index methodology to reflect them. These changes are:
- Declining labor force in OECD countries
- AI, employment and recruitment
- Evolving employee preferences
- Corporate progress and increased data availability
To learn more about Calvert’s approach to assessing companies with leading talent management practices, and how we respond to evolving trends in the talent economy, download the white paper below.
