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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Integrated Reporting Framework, Global Reporting Initiative Framework and Business Responsibility and Sustainability Reporting

Kaveri Pharma Ltd trains its scientists and invests in a proprietary drug-formulation process. Its integrated report classifies the staff skills and experience, and separately the patents and know-how. Under the IIRC capitals, how should these be classified respectively?

Staff skills and experience are human capital, while patents and proprietary formulation know-how are intellectual capital. The IIRC Framework distinguishes people's competencies from organisational, knowledge-based intangibles, so the pairing of human and intellectual capital is correct, unlike pairings with manufactured or natural capital.

  1. AHuman capital and intellectual capitalCorrect
  2. BSocial and relationship capital and manufactured capital
  3. CIntellectual capital and natural capital
  4. DFinancial capital and human capital

Explanation

Employee competencies, skills and experience are human capital. Patents, proprietary processes and organisational know-how are intellectual capital. Manufactured capital covers physical objects such as buildings and equipment, so the other pairings misclassify at least one item.

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