Key Performance Indicators (draft 1)

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1 Stakeholder Information December: Key Performance s (draft 1) Oliver Schmid-Schoenbein / Dr. Arthur Braunschweig / Gaby Oetterli Zürich, December 18th 2001 E2 Management Consulting Ltd. Wehntalerstr. 3, CH-8057 Zürich, Tel , Fa e2post@e2mc.com

Arthur Braunschweig / Gaby Oetterli Zürich, December 18th 2001 E2

2 Introduction and Contents The project enters into its 2 nd stakeholder consultation phase. Since the 1 st round of stakeholder meetings in August 2001 the participating financial institutions have developed this first draft of key performance indicators (KPI). The criteria when selecting these indicators were: social relevance of an issue epectations of stakeholders feasibility of data collection the goal to limit the number of key performance indicators to a feasible number This document contains draft 1 of the KPIs including comments and provisional defintions. This draft 1 of KPIs represents from the perspective of the SPI participants the best solution when applying these criteria. However the project is still open to changes in this selection which in particular may arise from stakeholder feedback, as well as from comparison to international standards or regulations and from verification of the KPIs within the financial institutions. Stakeholders are now invited to provide feedback to this first draft of indicators. In order to facilitate the feedback process, please download the feedback form named SPI Stakeholder Comments Draft KPIs.doc (Word-Document) from the website Please provide your feedback to our contact person Gaby Oetterli. She can be reached by at oetterli@e2mc.com, by phone at or by fa at We would appreciate recieving your feedback not later than January 14th, Feedback that reaches us later than January 31st, 2002 cannot be considered. Contents CSR Management page 3 Anti-Money-Laundering page 6 Internal Performance page 4 Retail Banking page 6 Performance to Society page 5 Investment Banking page 7 Suppliers page 5 Asset Management page 7 Insurance page 8 by E2 Management Consulting Ltd. and / December 18th, 2001 page 2

The criteria when selecting these indicators were: social relevance of an issue epectations of stakeholders feasibility of data collection the goal to limit the number of key performance indicators

3 SPI-Finance Overview (draft 1) CSR Management Quality of Management System CSR 1 CSR Tet CSR as an epression of an organisations' core social values. It may consist of one or more documents, including CSR policies for separate business sectors (e.g. human resources, suppliers, lending policy, investment policy etc.). CSR 2 CSR Organisation Tet A qualitative description of the organisation eplaining the installed procedures. CSR 3 CSR Audits # audits; hours; empl. Includes both internal and eternal audits on compliance with CSR policy, procedures and data. Compliance CSR 4 CSR Compliance # recorded noncompl. Non-compliance to laws, regulatory and voluntary codes of conduct (e.g. advertising code). To be counted e.g.: referrals to the ombudsman, reports to an advertising standards authority where the complaint was upheld, law cases having resulted in court action. Participation CSR 5 Stakeholder Dialogue Tet Description of stakeholder involvement procedures. Key K = Key Performance - Quantitative Q = Key Performance - Qualitative A = additional indicator, which is important for measuring performance, but does not qualify for an overall KPI due to local, regional or legal contet by E2 Management Consulting Ltd. and / December 18th, 2001 page 3

CSR 2 CSR Organisation Tet A qualitative description of the organisation eplaining the installed procedures. CSR 3 CSR Audits # audits; hours; empl.

4 SPI-Finance Overview (draft 1) Internal Performance CSR Management Int 1 Internal CSR Tet Is there a CSR policy in place? May contain anti-harassment policy, freedom of association (incl. unions), part-time employment / job sharing, layoff policy incl. outplacement support, anonymous feedback facility. Employment and Protection Int 2 Int 3 Employee Fluctuation Employee Satisfaction Survey survey results (, scale) changes in a given year. Not to be included are pension leaves and deaths. Survey results covering employee satisfaction with job security, remuneration & benefits, work/life-balance, training & development, company's communication culture, company's social performance. Fair Compensation Int 4 Int 5 Salary & Security Benefits Sustainability oriented bonus incentives $ Includes bonuses, etc.; total and average per full-time equivalent. Bonuses based on long term successes and/or achieving social performance criteria. To be reported only where bonuses make up for a material part of remuneration. Equal Opportunity Int 6 Female-Male Salary Relation ratio Ratio of female to male salaries including bonus, etc. per hierarchy level. Some globally active companies might not publish, for fear of legal problems (esp. in US). Int 7 Employee profile Employee profile on gender, ethnicity, disability, age, etc. per hierarchy level by country. Some globally active companies might not publish, for fear of legal problems (esp. in US). Key K, Q, A: see p. 4 by E2 Management Consulting Ltd. and / December 18th, 2001 page 4

Employment and Protection Int 2 Int 3 Employee Fluctuation Employee Satisfaction Survey survey results (, scale) changes in a given year. Not to be included are pension leaves and deaths.

5 SPI-Finance Overview (draft 1) Performance to Society Contributions Soc 1 Aggregated contributions $ Provision of contribution data according to the London Benchmarking Guidelines. Value Added Soc 2 Total and split of value added to stakeholders $ Value added epresses the economic value created by a company's activities. It is the company's contribution to the GNP. Suppliers Performance of Suppliers Sup 1 performance screening of suppliers Tet Report on policy and procedures to screen suppliers' social performance (esp. top suppliers). Perform. towards Suppliers Sup 2 Supplier satisfaction survey Tet Supplier satisfaction with e.g. prompt payment, prices and treatment. Report on supplier satisfaction survey, where available also quantitatively. Key K, Q, A: see p. 4 by E2 Management Consulting Ltd. and / December 18th, 2001 page 5

Suppliers Performance of Suppliers Sup 1 performance screening of suppliers Tet Report on policy and procedures to screen suppliers' social performance (esp. top suppliers). Perform. towards Suppliers Sup 2 Supplier satisfaction survey Tet Supplier satisfaction with e.

6 SPI-Finance Overview (draft 1) Anti-Money-Laundering Training AML 1 Amount of training Amount of training Training activities are legally required in some countries anyway. Compliance AML 2 Reports to authorities Number of reports The number of reports is available to every financial institution. Yet the eact definition still has to be defined. Financial institutions are still considering whether 'reports to authorities' or 'reports leading to prosecution ' is more appropriate. Management AML 3 Comparison of AML- Systems Tet Qualitative reporting of the system in place (e.g. the Swiss Federal Banking Commission EBK/SFBC report on the Abacha-case). Retail Banking RB 1 Lending Tet The social criteria applied in lending as defined by each financial institution. Customer Profile RB 2 Lending Profile Repartition of lending business, including industrial sectors and company sizes (mentioning SME-part of lending). Fostering Capital RB 3 Lending with high social benefit Provision of tailored and innovative products and services applying special ethical / sustainability criteria, incl. provision of finance to deprived communities. Key K, Q, A: see p. 4 by E2 Management Consulting Ltd. and / December 18th, 2001 page 6

Financial institutions are still considering whether 'reports to authorities' or 'reports leading to prosecution ' is more appropriate.

7 SPI-Finance Overview (draft 1) Investment Banking IB 1 Investment Tet criteria applied, incl. (a) developing countries credit & debt issues; (b) human rights policy in (co-) financing projects, (c) Corporate Governance control. Customer Profile IB 2 Customer profiles: global transaction structure According to World Bank classification of economies (4 groups of per-capita GNP). Fostering Capital IB 3 Transactions with high social benefit Provision of tailored and innovative products and services applying special ethical / sustainability criteria. High social benefit can also mean to prove not to have a major social performance deficit. Asset Management AM 1 Asset Management Tet Report on eistence of policy and its social performance contents. Include e.g. responsible marketing / "best advice. Fostering Capital AM 2 Assets under Management with high Benefit Provision of tailored and innovative products and services applying special positive ethical / sustainability criteria. Includes investments in developing countries. AM 3 SRI oriented shareholder activity May include SRI oriented communication with board, SRI oriented motions or votes at shareholder meetings, etc. Key K, Q, A: see p. 4 by E2 Management Consulting Ltd. and / December 18th, 2001 page 7

8 SPI-Finance Overview (draft 1) Insurance Ins 1 ly relevant elements of underwriting policy Tet Reporting may include socially relevant policy elements, e.g. responsible marketing, medical screening, genetic testing, transparent commissioning. Reporting may include how policy application is ensured. Customer and Company Profile Ins 2* Customer profile #, $ and # of customers (private, business), age profile (private), male/female profile (private, possibly business), ethnicity split (private, possibly business), business size profile (for companies), geographical split. Ins 3 Risks profile Types of risks covered; contract sizes. Basic information (even if not necessarily a socially relevant KPI in itself). Equity of Access Ins 4 Equity of access to insurance in lowincome areas Insurance given to people and SMEs in deprived areas (to be defined per area). Ins 5* Customer complaints # Info on complaints "qualities" (e.g. pricing, settling, eclusion). Fostering Capital Ins 6 Insurances with high social benefit Provision of tailored and innovative products and services applying special ethical / sustainability criteria. (Insurance basically offers social benefit. "High" benefit might be (a) giving basic cover which (b) is not yet offered by the market at large). Keys: K, Q, A: see p. 4 * = indicator does not apply for re-insurance by E2 Management Consulting Ltd. and / December 18th, 2001 page 8

Financial Services Sector Supplement: Social Performance

Financial Services Sector Supplement: Social Performance For use with the GRI 2002 Sustainability Reporting Guidelines November 2002 GRI (2002) Primary Authors SPI-Finance 2002 (hereafter the project )