KPIs for ESG - DVFA

I. Executive Summary
KPIs for ESG 3.0 is a reporting framework for the integration of ESG (Environmental, Social and Governance) data into
corporate performance reporting and valuation of corporate reporting. The reporting framework has been defined
and worked out by the Committee on Non-Financials of DVFA, German Society of Investment Professionals, in close
collaboration with and under supervision of the Commission on ESG of EFFAS, the European Federation of Financial
Analysts Societies. DVFA’s Committee on Non-Financials operated as the “KPI laboratory” while EFFAS’ Commission on
ESG provided guidance as the steering committee. As an integral part of the process of identification, selection and
definition of relevant topics and proposed KPIs to cover these topics, several series of iterative surveys, rounds of
discussions, interviews and research were conducted with investors and financial analysts. Thus, the work can claim to
be representive mainly of the requirements and subjects of interest to those who manage or evaluate investments.
As an ongoing project which started in 2005, the KPIs for ESG 3.0 follow version 1.2, which was published in 2008. We
have taken the liberty of modifying the reporting framework according to numerous comments and suggestions we
received after publication of version 1.2.
In brief, here are some of the most important features of the KPIs for ESG. (Further down, we have added some
sections from version 1.2 which serve to explain our train of thought and our general approach to the work).
1. Version 3.0 DVFA/EFFAS “KPIs for ESG” supersedes Version 1.2
When DVFA/EFFAS KPIs for ESG 1.2. were launched in 2008 they contained a list of General KPIs applicable to all
industries and some select industry-specific KPIs for a few industries. Over the past two years, DVFA’s Committee
on Non-Financials, which serves as EFFAS’ laboratory for hands-on, practical development of the ESG framework
and which is closely connected to the EFFAS Commission on ESG, developed a set of industry-specific KPIs serving
as the fulcrum of KPIs for ESG 3.0.
The individual topic, issue or aspect to be disclosed is called an ESG. Some examples of ESGs are GHG Emissions,
Waste Scope I or Corruption. For each ESG we have defined specific indicators called KPIs. Each KPI has a unique
identifier, e.g. V0401 Innovation – Total R&D Expenses in Monetary Terms i.e. Currency.
DVFA used the Dow Jones Industry Classification Benchmark (ICB) which offers a classification scheme with four
distinct levels of granularity. We decided to opt for the highest level of granularity – subsector – of which the ICB
features 114. For each of the 114 subsectors we provide a subsector supplement which encompasses all proposed
KPIs – general and specific – for the respective subsector. (General ESGs and KPIs are highlighted in grey)
2. KPIs for ESG reflect requirements of economic stakeholders in general and investment professionals in
particular
DVFA and EFFAS as professional associations represent investment professionals i.e. individuals who manage or
evaluate investments or credit risks as professionals. While we acknowledge that corporate ESG or sustainability
disclosure is aimed at a host of stakeholders such as civil societies, NGOs, employees, trade unions, governmental
organisations etc., we do not take party for these organisations nor do we claim to express expectations or
requirements for any target groups other than investment professionals. We encourage other stakeholder groups
to consider and use the KPIs for ESG 3.0 in their respective dialogues with companies, but we fully respect that
these groups may require disclosure of other or additional issues.
© DVFA April 2010 ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, recording, without the prior permission of the copyright holder.
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