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 and Group

Financial ESG and sustainability criteria are also included in the annual scorecards (Short Term Incentives) for the Mediobanca Chief Executive Officer and Group General Manager, if appointed, to be assessed over the one-year time horizon for the performance. Their weighting is up to 10% of the quantitative component, and they refer to the annual ESG objectives contained in the Strategic Plan for the Group’s principal businesses, with financial KPIs related to, for example, growth in the volume of ESG products (new loans; CIB, Compass and Mediobanca Premier), deeper penetration rates for SFDR Article 8/9 ESG funds in clients’ portfolios, etc.

The CEO’s and Group General Manager’s annual scorecards also include non-financial ESG and CSR objectives, with an overall weighting of 15% of the total indicators.

Performance evaluation is also supported by quantitative indicators and measurable evidence provided in detail to the Board of Directors to assist them in making the correct assessment.
 

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.