The Corporate Human Development Index CHDI: a tool for corporate social sustainability management and reporting

Abstract

Sustainable development is one of the dominant societal and political discourses around the world now, and the Human Development Index HDI has become an important issue of debate in many countries but so far there is a lack of perspective regarding the impact of the HDI issues on corporate management, and vice versa. The paper suggests a transparent, easy-to-communicate supplement to the existing, often complex and data-heavy corporate CSR management and reporting tools by borrowing from a macro level concept: the Human Development Index HDI.We derive the CHDI by projecting the criteria and categories of UNDP's HDI to the company level, using in addition the capital stock approach and the discourse on the future of labour. Its basic components are (1) longevity and industrial relations, (2) education, knowledge and skills, and (3) the standard of living and distributional justice.As a management tool, the CHDI focusses attention on the social and human capital of a company by monitoring main factors contributing to their slow erosion which is often recognised too late in day-to-day management.Integrating the CHDI into corporate management and target setting is this a contribution to risk management by extending stakeholder management to one key group, the corporate staff. Regarding reporting, the CHDI enhances transparency and credibility, is independent of size, sector and location of a company and can be used for social sustainability/human development rankings.