Canvas today announced a $50 million Series C round of VC funding, led by Owl Ventures for its diversity recruiting application. This brings its total raised to $82.7 million. Along with the fundraising, the company announced the launch of Canvas Diversity and Analytics Benchmarking. The new product is positioned as a solution for employers in response to the SEC’s new disclosure rules for human capital metrics. It’s a compelling message, however, employers should take pause. Hiring metrics is a critical piece, but not the entire puzzle when it comes to human capital metrics.
Reviewing the positioning of the Canvas analytics offering on its website, it looks to be focused on demographics. Again, a critical piece for DEI analytics, but not nearly the entire picture when looking at human capital metrics.
A closer look at the SEC mandate:
On August 26, 2020, the Securities and Exchange Commission (SEC) introduced a new mandate regarding Human Capital disclosure requirements for all public companies in the U.S. The order directly responds to increasing requests from investors to evaluate a firm’s Environmental, Social, and Governance (ESG) practices.
Companies will be required to have a fact/data-based narrative disclosing “information about their human capital management policies, practices.” The SEC hasn’t provided any specific guidance yet. After reviewing the current memorandum, most industry experts feel that companies will be required to provide a breakdown of their workforces by employment type, demographics, etc. They will need to further and substantiate claims made in their annual, 5K, and 10K reports concerning human capital resources.
This new order puts Talent Acquisition and HR at the center of the ESG discussion, as it lives in both the “S” and “G” of ESG. The impact will extend from recruiting through talent management, compensation, workforce management, pay, benefits, and indeed every facet of the employee experience.
It’s good to see such a substantial round of funding go to a solution provider that is focused on diversity, equity, and inclusion in recruiting. As said in our mid-quarter update in early September, funding in this category has been disappointingly low in comparison to other categories.
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