Pub. 3 2021 Issue 3

23 nebraska society of cpas W W W . N E S C P A . O R G • $4 billion to diverse-owned businesses, continuing to place Microsoft in the top 20 companies for diversity spending globally. • Microsoft employees donated $221 million (inclusive of company matching grants) to nonprof its worldwide and volunteered more than 750,000 hours in the United States. Company Performance Despite the increased emphasis, there have been questions about the impact these initiatives have on performance and firm value. Considerable research has been conducted on the impact of sustainability initiatives, their disclosure, and future performance. In general, these studies suggest there may be some financial incentive to adopting or maintaining behaviors consistent with sustainability. Research has shown that sustainability disclosures can affect a firm’s financial standing. Some have shown that social disclosures reduce the cost of capital of firms. 4 There is also some evidence that corporate philanthropy is associated with future revenue growth. 5 Finally, corporate social responsibility and firm value have been shown to be positively related for firms with high customer awareness, as measured by advertising expenditures. 6 Reporting The Securities and Exchange Commission (SEC) recently took action to increase the disclosures firms are required to make regarding their human capital with an amendment to Item 101 of Regulation S-K. This change will require companies to disclose a principles-based, individualistic (not boilerplate) description of their material human capital resources, including measures or objectives the company uses to manage its own operations. This new disclosure requirement is designed to provide stakeholders with insight into the operat ing model, talent acquisit ion, development, and innovation. 7 The disclosures are expected