Key Performance Indicators for ESG - XBRL

1 DVFA Committee on Non-FinancialsDVFA Committee on NonFinancialsKey Performance Indicators for ESGESGS ociety of Investment Professionals in GermanyDVFA Criteria for KPIs for Extra-/Non-FinancialDVFA Criteria for KPIs for Extra/NonFinancial IMPERATIVE: Depict correlation to Depict correlation to zRiskzSuccess factors of corporate business Significant and relevant for investment decisionsSignificant and relevant for investment decisions Firmly anchored in corporate management system Quantified Comparable 2008 from peer to peerzDepict dynamic from reporting period to reporting period Accepted by mainstream financial analysts and investorspyy Manageable amount ( Key ) small set of max.

2 30 KPIs Not yet another reporting scheme: KPIs can be reported within ztraditional reporting statements quaterly reports, annual reports,zSustainability formats GRI s G3 ESG Issues considered importantESG Issues considered important4,19 Customer Satisfaction 44,02ff&(G )R&D Expenses Revenues w ith New Products Introduced 3,643,673,73 Energy Efficiency (in General) Anti-competitive behavior, anti-trust, monopoly practices Health and safety of products & services (in General) 2008 ,63,64 Litigation payments for non-compliance w ith law s and regulation and social Training & qualification 3,383,443,59 Staff turnover Number of Patents Handling of corruption 3,3,012345 Deployment of Renew able Energies (in General) Perception of the 24 KPIs: Summary (2)Perception of the 24 KPIs.

3 Summary (2)3,25 Maturity of Workforce 3123,143,17 Restructuring caused relocation of jobsEnd of life cycle impact / Reclaiming of Resources (in General) Environmental Compatibility/Tolerance of Products sold (in General) 3,073,113,12 Waste CO2 Emissions (in General) Restructuring-caused relocation of jobs 2008 ,993,04 Screening of SUPPLIER agreements w ith rgds to human rights Absenteeism Rate 2,552,642,93 Contributions to political parties NO, SO and other air emissions by type and w eight (in General) Screening of investment agreements w ith rgds to human rights 2,44012345 Unburned Hydrocarbon (UH) (in General) What are the Specifics of the Approach?

4 What are the Specifics of the Approach? Utilize XBRL as an analytical tool firstthbl then as an enabler Open source framework Validation process mandate of DVFA and EFFAS Clear separation between topical area (ESG) and measurable item (KPI) Provision of KPI line item for Corporate andBenchmark 2008 investment analysis approach Detailed taxonomyDefinitionsDefinitionsTwo levels of Standardisation Topical areas are called ESGszESG has several topical areas CO2 Emissions, Maturity ofWkfHdlifCtiESG(IAS)Workforce,Handling ofCorruption =ESG(->IAS)zExample: ESG 15 Waste, ESG 18 DiversityzLitmus test.

5 ESG are not measurable! 2008 Measurable elements are called KPIs(Key Performance Indicators )zAlways linked to an ESGzCan be modified according to industry-groupStructure of ESGsStructure of ESGsESGV E Environmental SSocialGGovernanceV Longterm Viability ESG 1 Energy Efficiency ESG 3 Staff Turnover ESG 8 Contributions to Political Parties ESG 11 Customer Satisfaction ESG 2 Deployment of Renewable Energy SourcesESG 4 Training & QualificationESG 9 Anti--competitive Behaviour MonopolyESG 12 Revenues from New ProductsGeneral:Renewable Energy SourcesBehaviour, MonopolyProducts ESG 5 Maturity of Workforce ESG 10 Corruption ESG 6 Absenteeism ESG 7 Restructuring-related Relocation of Jobs General.

6 ESGs which apply to all industry-groups 2008 ESG 13 CO2 Emissions ESG 18 Diversity ESG 25 Litigation Payments ESG 27 R&D Expenses ESG 14 NO,SO Emissions ESG 19 % of Credit Loans, Undergone ESG Screening ESG 26 Dimension of Pending Legal Proceedings ESG 28 Patents ESG 20 % of Funds ManagedESG 29 Investments in ResearchESG 15 Waste ESG 20 % of Funds Managed in Accordance to ESG Criteria ESG 29 Investments in Research on New Risk ESG 16 Environmental Compatibility ESG 21 Financial Instruments held in Accordance to ESG Criteria ESG 30 Customer Retention ESG 17 End-of-Lifecycle Impact ESG 22 Investments in Accordance with ESG ESG 23 Supplier AgreementsIndustry-Group Specific.

7 ESGs which apply to select industry-groups ESG 23 Supplier Agreements in Accordance with ESG ESG 24 Health & Safety of Products ESGs and KPIsESGs and KPIsElGeneralIndustry-specificGeneralESG sIndustry-specificExample:ESG 15 Waste is applicable to certain industries only Oil & Gas Producers,Chemicals, Forestry & Paper, etc. Example:ESG 1 Energy Efficiency should be reported by all industriesGeneral ESGs~ issues or topical areas which corporates in all industriesshould report aboutIndustryspecific ESGs~ issues or topical areas which corporates in specific industriesshould report aboutTopical Areas = ESGs 2008 of KPIs forIndividual ESGsadapted to meet the needs of specific industries List of KPIs forIndividual ESGsadapted to meet the needs of specific industries Example:Example:Measurable items = KPIsESG 15 Waste has the following KPIs.

8 - Waste by Unit Produced% of Waste RecycledCorporates from industries to which the dfESG 1 Energy Efficiency has the following KPIs:Electric Energy Consuption TotalElectric Energy consumptionperIndustry-Specific ESGapplies should report at least 1 KPIconsumptionperemployee(..)All corporates should report at least 1 KPI for this General ESGKPIs for ESG and XBRLKPIs for ESG and XBRL Taxonomy designed by PwC NY David vun KannonT t d ith d t fAt4 Tested with data from Asset4 Section within WICI framework Next step: pilot with corporates 2008