ESG-related KPIs

We have ensured that indicators related to environmental, social and governance objectives have been integrated into the incentivization schemes.

As part of the performance evaluation process in relation to the Group Remuneration Policy, priority and increasing space is devoted to delivering on Environmental, Social and Governance (ESG) objectives. Performance in this area is measured through KPIs applied at the level of individual area of responsibility, having regard also to the reward systems applicable at both the individual and divisional level.

ESG indicators in Short-Term Incentives (STIs) for CEO

The annual scorecard for the Chief Executive Officer, which governs the Short-Term Incentive, includes financial ESG and sustainability indicators, that are evaluated over the one-year horizon. These indicators account for as much as 10% of the quantitative component, and refer to the annual breakdown of the three-year Strategic Plan ESG objectives for the Group’s main business lines, including financial KPIs linked, for example, to growth in volumes in terms of new ESG loans (CIB, Compass, Mediobanca Premier), or to deeper penetration of SFDR Article 8/9 funds in client’s portfolios.

The CEO’s annual scorecard also comprises non-financial objectives, including of an ESG and CSR nature, with an aggregate weighting of up to 15% of the total indicators.

Assessment is supported by quantitative indicators and by detailed evidence which is provided to the Board of Directors, to ensure that performance is evaluated correctly.
 

ESG indicators for other Key Function Holders and MRTs

The short-term incentive mechanism for other senior management (Key Function Holders and Material Risk Takers who head up the main business lines, including the CEOs and General Managers of the largest Group Legal Entities), both individually and as part of the scorecards used to define the divisional bonus pools, and where appropriate to the scope under consideration, the presence of quantitative, measurable ESG indicators with weightings of up to 10%. These ESG KPIs include, but are not limited to:

  • Higher volumes of green products (new loans), and deeper penetration of Article 8/9 funds in client portfolios
  • Number of green and sustainability bonds issued
  • Monitoring and accounting for portfolio assets from an ESG standpoint
  • Integrating ESG valuations into the fund investment process.
  • Increasing green/ESG-linked bond issues and lending activities
  • Screening of suppliers based on ESG criteria
  • Electricity target levels from renewable sources.

Non-financial ESG objectives have also been set for these figures, with focus primarily on People Strategy issues (diversity, training, succession planning, work-life balance, staff conditions, etc.), also structured as projects.

The remaining staff are assigned a Group objective (with a weighting of between 5% and 10% of the total) to evaluate the performance delivered in terms of socially responsible behaviour, in line with the Group’s Corporate Social Responsibility policies, and with reference in particular to protection of the environment, to diversity, and to the protection of human and social rights.