Environment, Social and Governance (ESG) – trend is KPI’s

An interesting fact that comes from draft technical standards on ESG in Europe, is the importance of “KPIs” and “quantitative” goals.    

The four (4) key pillars recently set out by the European Banking Authority, for the firms it regulates in Europe were as follows:

1. Environmentally sustainable activities
2. ESG and diversity information
3. ESG risks and mitigations (KPIs and quantitative goals)
4. Disclosure in investment product literature and financial advice

Fuzzy, vague ESG will not meet the pillars espoused by the European Banking Authority. 

We agree with that.

Instead, having a sense of direction, and culture, will always be a good start in forming ESG goals.

KPIs – and culture – are the root to ESG success.  That is why Board Originator has quantitative KPIs in the Risk and Objectives power tool.  Board Originator also prompts subscribers to select cultural values – without which, ESG will be meaningless.

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