Explore the Metrics

Metrics
Explore the Metrics

This set of 21 core and 34 expanded metrics and disclosures were published in September of 2020, in the World Economic Forum report Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation.Focused on four themes, People, Planet, Prosperity and Principles of Governance, these metrics and disclosures reflect a six-month consultation process with more than 200 companies, investors and other interested parties.

People Metrics

Dignity and equality

Diversity and inclusion (%)

Percentage of employees per employee category, per age group, gender and other indicators of diversity (e.g. ethnicity)

Rationale

Gender, ethnic and cultural diversity, particularly within executive teams, continues to be correlated to financial performance across multiple countries worldwide. What drives this correlation is that more diverse companies are better able to innovate, attract top talent, improve their customer orientation, enhance employee satisfaction and secure license to operate.

Companies that focus on improving the representation of a diverse work force and effectively utilize inclusion and diversity as an enabler to develop their talent can reap tangible and intangible benefits.

Adapted from GRI 405-2

Dignity and equality

Pay equality

Ratio of the basic salary and remuneration for each employee category by significant locations of operation for priority areas of equality: women to men; minor to major ethnic groups; and other relevant equality areas

Rationale

Inclusion and diversity can only be achieved by promoting equal pay and by providing equal remuneration for the same jobs, in order to address social disparity and to maximize professional opportunities for all people irrespective of gender, color, caste, creed, religion and other diversity aspects.

Organizations in which imbalances exist expose themselves to reputational and legal risk, based on racial and other discrimination.

GRI 202-1, UK Companies (Misc. reporting) regulations 2018, Dodd-Frank Act

Dignity and equality

Wage level (%)

Ratios of standard entry-level wage by gender compared to local minimum wage

Rationale

Fair compensation and benefits contribute to the economic well-being of workers since the distribution of wages and income is crucial for eliminating inequality and poverty.

A wide gap between the CEO compensation and the median reinforces inequality and could impede long‑term value creation. Depending on how the organization is structured, it can become a crucial aspect for investors to make appropriate decisions.

GRI 408-1 (b), GRI 409

Dignity and equality

Risk for incidents of child, forced or compulsory labour

An explanation of the operations and suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour. Such risks could emerge in relation to type of operation (such as manufacturing plant) and type of supplier; or countries or geographic areas with operations and suppliers considered at risk.

Rationale

Child, forced or compulsory labour is a violation of fundamental human rights and has been identified as hindrance to development. There is a strong link between household poverty and child labour, which can also trigger to lower the standard of living across the generations.

The ripple effects arising from these issues can translate into legal and reputational risk for the companies, especially those with extensive value chains.

GRI 408-1 (b), GRI 409

Health & wellbeing

Health and Safety (%)

The number and rate of fatalities as a result of work-related injury; high-consequence work-related injuries (excluding fatalities); recordable work-related injuries, main types of work-related injury; and the number of hours worked GRI:2018 403 – 6 (a)

An explanation of how the organization facilitates workers’ access to non-occupational medical and healthcare services and the scope of access provided for employees and workers

Rationale

Maintaining strong standards of health, safety and labour rights can improve employee productivity and operational efficiency. Working proactively in these areas of business will help identify and mitigate risks and it is increasingly required by law.

Mental health and emotional wellbeing as components of overall worker health and safety are becoming increasingly important to drive innovation and deliver goods and services that are increasingly reliant on intellectual capital. In addition, health- related employee benefits that address physical illness and mental and emotional wellbeing issues are gaining importance.

GRI:2018 403 – 9 (a & b)

Skills for the future

Training provided (#)

Average hours of training per person that the organization’s employees have undertaken during the reporting period, by gender and employee category (total number of trainings provided to employees divided by the number of employees)

Average training and development expenditure per full time employee

Rationale

Skilled employees enhance a company’s human capital and contribute to employee satisfaction, which correlates strongly with improved performance.

Building human capital to secure a motivated, productive and skilled workforce is a key priority for companies. When firms fail to invest in training, education, skilling and reskilling of their employees, it can affect their business performance, reputation and ability to attract talented workforce. It can also lead to higher operating costs related to recruiting, developing and retaining employees.

Significant investment in training and development across all levels of the workforce will serve as a testament to the organization’s commitment on learning and development for all employees and supports the agile transformation of the companies.

GRI 404-1, SASB HC0101-15

Dignity and equality

Pay gap (%)

Mean pay gap of basic salary and remuneration of full-time relevant employees based on gender (women to men) and indicators of diversity (e.g. BAME to non-BAME) at a company level or by significant location of operation.

Ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country

Rationale

The Pay Gap metric is considered an indicator of organizational structural inequality and under-representation of disadvantaged groups in senior and higher paid roles. Research has shown that women and people from ethnic minorities tend to earn less and be in less senior roles. This is often associated with social disadvantage and is arguably also caused by discrimination. A migrant workforce may have a poor command of the local language, possess qualifications that are not generally recognized by employers and be unfamiliar with the regional culture; these factors affect pay and position.

A wide gap between the highest paid individual and the median reinforces inequality and could impede long‑term value creation. Depending on how the organization is structured, it can become a crucial aspect for investors to make appropriate decisions.

Adapted from UK Government guidance on gender and ethnicity pay gap reporting, GRI 102-38

Dignity and equality

Discrimination and Harassment

Incidents (#) and the Total Amount of Monetary Losses ($)

Number of discrimination and harassment incidents, status of the incidents and actions taken and the total amount of monetary losses as a result of legal proceedings associated with (1) law violations and (2) employment discrimination.

Rationale

Organizational culture needs to be built on a foundation of respect, courtesy and professionalism, free from any acts of discrimination, bullying or harassment.

Commitment to eliminating discrimination and harassment in the workplace helps reduce inequalities and promotes organizational cultures that focus on performance and merit, ultimately building competitiveness.

GRI (406-1), SASBI (FB-FR-310a.4)

Dignity and equality

Freedom of Association and Collective Bargaining at Risk (%)

Percentage of active workforce covered under collective bargaining agreements.

An explanation of the assessment performed on suppliers for which the right to freedom of association and collective bargaining is at risk including measures taken by the organization to address these risks.

Rationale

The freedom to associate and bargain collectively are not only rights of employees but are also useful tools for organizations and employees to engage, build trust and negotiate solutions when potential conflicts arise.

Organizations can afford to bridge the widening representational gap by mitigating the risk of rise in potential conflicts. This can be ensured by facilitating decent work environments to the workforce, especially those who perform their jobs in the informal sector.

SASB (CN0401-17), GRI (407 – 1), WDI – 7.2

Dignity and equality

Human rights review, grievance impact and modern slavery (#, %)

Total number and percentage of operations that have been subject to human rights reviews or human rights impact assessments, by country.

Number and type of grievances reported with associated impacts related to a salient human right issues in the reporting period and an explanation of impacts.

Number and percentage of operations and suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour. Such risks could emerge in relation to a) type of operation (such as manufacturing plant) and type of supplier or b) countries or geographic areas with operations and suppliers considered at risk.

Rationale

The activities of companies may cause or contribute to environment or social abuses that violate the human rights of individuals, workers and communities. Without a mechanism for employees and other key stakeholders to report human rights violations, companies could miss opportunities to identify and mitigate such underlying issues.

Companies that encourage stakeholders to provide feedback can respond more quickly to misconduct, build trust with their stakeholders and prevent harm to long-term value.

Companies that tend to associate with modern slavery in any form will cause severe damage to reputation, brand and even their license to operate. In consequence it is extremely important for companies to engage with this topic and understand this risk across their value chain.

GRI (412-1), UN Guiding Principles, GRI (408-1 (a)), GRI (409-1), WDI 7.5

Dignity and equality

Living Wage (%)

Current wages against the living wage for employees and contractors in states and localities where the company is operating.

Rationale

Provision of living wages to employees, companies could help lift households and communities out of poverty. This aspect is a major contributor to achieving the Sustainable Development Goals (SDG’s).

This aspect provides a benchmark for responsible employers who respect human rights and who choose to pay their employees a rate that meets the basic cost of living in the region they operate-in.

MIT Living Wage Tool, EPIC Report, IMP

Health & wellbeing

Monetized Impacts of Work-related Incidents on Organization (#, $)

By multiplying the number and type of occupational incidents by the direct costs for employees, employers per incident (including actions and/or fines from regulators, property damage, healthcare costs, compensation costs to employees).

Rationale

The cost of work-related accidents and ill-health helps substantiate the business case for investments in occupational health and safety. Having this information available helps management in their decision-making process when it comes to investing in the business.

Adapted Indicator based on European Commission, Safe Work Australia

Health & wellbeing

Well-Being (%)

The number and rate of fatalities as a result of work-related ill-health; recordable work-related ill-health injuries, main types of work-related injury; and the main types of work-related ill-health for all employees and workers.

Percentage of employees participating in 'best practice' health and well-being programs that help to reduce absenteeism and improve productivity and employee absentee rate (AR) for all employees.

Rationale

Employee mental well-being directly affects how employees think and feel about their job and organization. Research has consistently shown that employee well-being predicts job attitudes and performance.

Employee well-being has important implications for productivity and work relationships. Having a hygienic and healthy workplace culture contributes to a high-performing organization that is productive and innovative, with employees who are socially integrated.

GRI: 2018 403 – 10 (a & b), GRI 2016: 403 – 2(a), Embankment Project

Skills for the future

Number of Unfilled ‘Skilled’ Positions (#, %)

Number of Unfilled “Skilled” positions (#)

Percentage of Unfilled “Skilled” positions for which the company will hire unskilled candidates and train them. (%)

Rationale

The rapid changes in global markets and business models including technology have given way to a rise in skills gaps. It is imperative for the organization to identify skill gaps and train its employees to bridge the gap. For several reasons it is paramount for organizations, society and investors alike to measure the effects of available skills and learning.

Investing in training programs will help the organization fill vacant skilled positions thereby improving productivity and reducing employee turnover.

WBCSD (Measuring Impact Framework Methodology Version1.0 (2008)

Skills for the future

Monetized Impacts of Training - Increased earning capacity as a result of training intervention (%, $)

Investment in training a percentage (%) of payroll.

Effectiveness of the training and development through increased revenue, productivity gains, employee engagement and/or internal hire rates.

Rationale

Training does affect valuation and financial performance and create pressure for change. For organizations, it could mean a leverage for innovation and a tool to manage human capital and a measurement to improve performance.

Investment in training enhances the intellectual capital of an organization. Providing training that is adequate and relevant to the job leads to the enhancement of human capital and has a direct impact on financial capital.

OECD, United Nations, WDI 5.5

Planet Metrics

Climate change

Greenhouse Gas (GHG) emissions

For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous oxide, F-gases etc.), report in metric tonnes of carbon dioxide equivalent (tCO2e) GHG Protocol Scope 1 and Scope 2 emissions.

Estimate and report material upstream and downstream (GHG Protocol Scope 3) emissions where appropriate.

Rationale

GHG emissions are the primary driver of rising global temperatures and therefore a key focus for policy, regulatory, market and technology responses to limit climate change. As a result, business models associated with significant emissions are likely to be more impacted by risks in the transition to a low carbon economy. While challenges remain in the accurate quantification of Scope 3 emissions, companies across all major sectors of the economy already report on Scope 3 emissions and in the context of the transition to a low carbon economy, material Scope 3 emissions may have a significant bearing on a company’s potential for long term value creation.

Adapted from GRI 305:1-3, GHG Protocol

Climate change

TCFD implementation

Fully implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). If necessary, disclose a timeline of at most three years for full implementation. Disclose whether you have set, or have committed to set, GHG emissions targets that are in line with the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C – and to achieve net-zero emissions before 2050

Rationale

The TCFD recommendations are already established as the primary framework for disclosure of information on the management of climate related risks and opportunities in main annual filings. Elevating disclosure of metrics relating to people, planet, prosperity and principles of governance into main annual filings is a key objective of this initiative and we therefore lend our full support to broader adoption of the TCFD recommendations. Additionally, we emphasize the importance of GHG emissions targets that are in line with the goals of the Paris Agreement.

Recommendations of the Task Force on Climate-related Financial Disclosures, Final Report. CDSB R01, R02, R03, R04 and R06; SASB 110

Nature loss

Land use and ecological sensitivity

Report the number and area (in hectares) of sites owned, leased or managed in or adjacent to protected areas and/or key biodiversity areas (KBA).

Rationale

Key biodiversity areas (KBA) provide a science-based and internationally recognized means of identifying sites contributing significantly to the global persistence of biodiversity while protected areas indicate nationally (and often internationally) recognized areas of ecological or cultural importance, typically with specific legal protections. Having operations inside or close to such areas indicates heightened risk of adverse impacts on biodiversity and heightened risk of exposure to associated legal or reputational risk.

GRI (304-1)

Fresh water availability

Water consumption and withdrawal in water-stressed areas

Report for operations where material, mega litres of water withdrawn, mega litres of water consumed and the percentage of each in regions with high or extremely high baseline water stress according to WRI Aqueduct water risk atlas tool.

Estimate and report the same information for the full value chain (upstream and downstream) where appropriate

Rationale

Water consumption and water withdrawal in water-stressed areas are indicators of the potential for negative societal impacts (resulting from competition with other water users) and associated business risks including the potential for operational disruptions and shutdowns.

SASB (CG-HP-140a.1.); WRI Aqueduct water risk atlas tool; https://www.wri.org/aqueduct

Climate change

Paris-aligned GHG emissions targets

Define and report progress against time-bound science-based GHG emissions targets that are in line with the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C. This should include defining a date before 2050 by which you will achieve net-zero greenhouse gas emissions and interim reduction targets based on the methodologies provided by the Science Based Targets initiative if applicable.

If an alternative approach is taken, disclose the methodology used to calculate the targets and the basis on which they deliver on the goals of the Paris Agreement.

Rationale

The Paris agreement on climate change sets a long-term goal to keep the increase in global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the increase to 1.5 °C, recognizing that this would substantially reduce the risks and impacts of climate change. All actors including businesses need to play their part in delivering on this goal if we are to avoid the worst effects of climate change. In June 2020, countries representing more than half of global GDP have set or committed to set net zero by 2050 targets and more than 900 companies have published Science Based Targets consistent with the Paris Agreement. As such, defining emissions targets that are at least consistent with the meeting the goal of the Paris Agreement is fast becoming the minimum expectation for businesses.

Science-Based Targets initiative

Climate change

Impact of Greenhouse gas emissions

Report wherever material along the value chain (GHG protocol scopes 1,2&3), the valued societal impact of greenhouse gas emissions.

Disclose the estimate of the social/societal cost of carbon used and the source or basis for this estimate.

Rationale

Reporting valued impact in monetary terms provides a meaningful indication of the scale of impacts in units that can be readily understood by executives and compared across impact areas and with financial figures. Valuation of environmental impacts is increasingly recognized as the most efficient and effective way of incorporating as much relevant contextual information as possible in order to provide estimates of actual impact, rather than simply measures of output as is the case with most quantitative environmental metrics.

US EPA fact sheet on the Social Cost of Carbon (2016); Natural Capital Protocol (2016); ISO 14008: Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance; https://www.value-balancing.com/

Nature loss

Land use and ecological sensitivity

For operations (if applicable) and full supply chain (if material):

Area of land used for the production of basic plant, animal or mineral commodities (e.g. the area of land used for forestry, agriculture or mining activities).

Year-on-year change in the area of land used for the production of basic plant, animal or mineral commodities.
Note: Supply-chain figures can initially be estimated where necessary based on the mass of each commodity used and the average mass produced per unit of land in different sourcing locations.

Percentage of land area in (1) or of total plant, animal and mineral commodity inputs by mass or cost, covered by a sustainability certification standard or formalized sustainable management programme. Disclose the certification standards or description of sustainable management programmes along with the percentage of total land area, mass or cost covered by each certification standard / programme.

Rationale

Growth in demand for land is the primary underlying driver of new conversions of ecosystems, which is in turn the primary driver of nature loss. The overall area of land used in operations and supply chain reflects the contribution of the current business model to overall demand for land; and the year on year change indicates whether the company is currently contributing to increasing or decreasing pressure for new conversions of ecosystems. The proportion covered by a sustainability certification standard or other formalized sustainable management programme is an indicator of how much of the land that is used is being actively managed for long term value creation.

New metric

Nature loss

Impact of land use and conversion

Report wherever material along the value chain, the valued societal impact of use of land and conversion of ecosystems.

Rationale

Natural Capital Protocol (2016); ISO 14008 Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance https://www.value-balancing.com/;

Fresh water availability

Impact of freshwater consumption and withdrawal

Report wherever material along the value chain, the valued societal impact of freshwater consumption and withdrawal.

Rationale

Natural Capital Protocol (2016); ISO 14008 Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance https://www.value-balancing.com/;

Air pollution

Report wherever material along the value chain: Nitrogen oxides (NOx), sulphur oxides (SOx), particulate matter and other significant air emissions.

Wherever possible, estimate the proportion of specified emissions that occur in or adjacent to urban/densely populated areas.

Rationale

Localized air pollution, in the form of fine particulate matter and oxides of sulfur and nitrogen, is a leading cause of ill health and premature death around the world. Emissions in densely populated areas tend to be particularly harmful because they contribute to high ambient concentrations of pollution and affect a large number of people.

GRI 305-7

Air pollution

Impact of air pollution

Report wherever material along the value chain, the valued impact of air pollution, including nitrogen oxides (NOx), sulfur oxides (SOx), particulate matter and other significant air emissions.

Rationale

Natural Capital Protocol (2016); ISO 14008 Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance https://www.value-balancing.com/

Water pollution

Nutrients

Estimate and report wherever material along the value chain, metric tonnes of nitrogen, phosphate and potassium in fertilizer consumed.

Rationale

Keeping nitrogen, phosphorus and potassium cycles in balance is critical to the effective functioning of ecosystems. Current agricultural practices have pushed bioavailable levels of nitrogen, phosphorus and potassium far beyond sustainable thresholds in many parts of the world, leading to freshwater and oceanic dead-zones and a host of other ecological and public health issues. “Biogeochemical flows” (of nitrogen and phosphorous) is one of only two of the nine planetary boundaries that is already deemed to have been breached. As such, all organizations with significant agricultural operations or supply chains are recommended to identify their exposure to this global problem.

SASB (CN0101-11)

Water pollution

Impact of water pollution

Report wherever material along the value chain, the valued societal impact of water pollution, including excess nutrients, heavy metals and other toxins.

Rationale

Natural Capital Protocol (2016); ISO 14008: Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance https://www.value-balancing.com/

Solid waste

Single use plastics

Report for the full value chain, estimated metric tonnes of single-use plastic consumed.

Disclose the most significant applications of single use plastic identified, the quantification approach used and the definition of "single-use plastic" adopted.

Rationale

Metrics for reporting on single use plastics have not yet been standardized, but the global scale of negative impacts associated with their use is sufficient to justify additional investigation of corporate value chains to identify their principle applications and the scale of their use. Experimenting with measurement will help the company understand its exposure to an issue of high public concern and disclosing the results and approach will help to advance understanding of the issues more widely.

New metric

Solid waste

Impact of solid waste disposal

Report wherever material along the value chain, the valued societal impact of solid waste disposal, including plastics and other waste streams.

Rationale

Natural Capital Protocol (2016); ISO 14008: Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance https://www.value-balancing.com/

Resource availability

Resource circularity

Report the most appropriate resource circularity metric(s) for the whole company and/or at a product, material or site level as applicable. Potential metrics include (but are not limited to) the "Circular Transition Indicators" (WBCSD & KPMG), indicators developed by the Ellen MacArthur Foundation and company developed metrics.

Disclose the methodological approach used to calculate the chosen circularity metric(s) and the rationale for the choice of metric(s).

Rationale

Metrics for reporting on resource circularity have not yet been standardized but some promising example metrics have been developed and tested by multiple companies. Applying emerging circularity metrics and disclosing the results will help to progress this fundamentally important area. It also indicates proactive engagement with the risks and opportunities presented by the circular transition and can be used to demonstrate progress towards genuine resource sustainability.

WBCSD & KPMG "Circular Transition Indicators; Ellen MacArthur Foundation "Circulytics™ indicators"

Prosperity Metrics

Employment and wealth generation

Absolute number and rate of employment

Total number and rate of new employee hires during the reporting period, by age group, gender, other indicators of diversity and region

Total number and rate of employee turnover during the reporting period, by age group, gender, other indicators of diversity and region

Rationale

Employment and job creation are key drivers of economic growth, dignity and prosperity.

The metrics provide a basic indication of a company’s capacity to attract diverse talent, which is key to innovate new products and services. Employee turnover may serve as an indication of employee satisfaction or dissatisfaction and potential unfairness in the workplace. These metrics are related to the “People” pillar but included within “Prosperity” because it captures the degree to which a company is supporting employment within a region.

Adapted, to include other indicators of diversity, from GRI 401: Employment (2016) – Disclosure 401-1a New Employee hires and 401-1b Employee Turnover

Employment and wealth generation

Economic Contribution

Direct economic value generated and distributed (EVG&D) – on an accrual basis, covering the basic components for the organization’s global operations, ideally split out by: EVG&D can provide a valuable snapshot of the direct monetary value added to local economies through generation of products and services, servicing of capital, payment of wages, taxes and community investment, while the significant financial assistance received from government, when compared with separate disclosures on taxes, can be useful for developing a more balanced and transparent snapshot of the balance of transactions between the company and government.
1. Revenue
2. Operating costs
3. Employee wages and benefits
4. Payments to providers of capital
5. Payments to government
6. Community investment

Financial assistance received from the government - Total monetary value of financial assistance received by the organization from any government during the reporting period

Rationale

Economic contribution provides a basic indication of how a company has created wealth for stakeholders.

GRI 201: Economic Performance (2016) – Disclosure 201-1 Direct Economic Value Generated and Distributed (EVG&D) and 201-4 Financial assistance received from government

Wealth creation and employment

Financial investment contribution disclosure

Total capital expenditures (CapEx) – Depreciation supported by narrative to describe the company’s investment strategy

Share buybacks + Dividend payments supported by narrative to describe the company’s strategy for returns of capital to shareholders

Rationale

Investment is a key driver of an economy’s growth and a company’s capacity to expand its operations and create additional employment.

Wealth creation from investment activities can be evidenced through the company’s expenditures to grow the business as compared to distribution of capital to shareholders.

As referenced in International ; Accounting; Standard (IAS) 7 – Statement of Cash Flows and US GAAP Accounting Standards Codification (ASC) 230 Statement of Cash Flows

Innovation in better products and services

Total R&D expenses ($)

Total costs related to research and development

Rationale

Innovation, and therefore R&D, is key to prosperity. Total R&D expenses gives a basic indication of a company’s efforts to innovate new products and services and be fit for the future.

This can also provide insight into the capacity of the company to create new offerings, generate social or environmental benefits and more detailed specific disclosure could demonstrate progress against the SDGs.

US GAAP definition ASC 730

Community and social vitality

Community investment is included within the economic contribution metric (part of EVG&D)

Rationale

N/A

Community and social vitality

Total tax paid

The total global tax borne by the company, including corporate income taxes, property taxes, non-creditable VAT and other sales taxes, employer-paid payroll taxes and other taxes that constitute costs to the company, by category of taxes

Rationale

Reporting of total tax paid provides global information on the company’s contribution to governmental revenues through the different forms of taxation imposed on it. This reporting provides information on the company’s global tax profile and on the various categories of taxes that support governmental functions and public benefits.

Adapted from GRI 201-1 (2016) - Direct Economic Value Generated and Distributed

Employment and wealth generation

Infrastructure investments and services supported

Qualitative disclosure to describe the below components:

Extent of development of significant infrastructure investments and services supported.

Current or expected impacts on communities and local economies, including positive and negative impacts where relevant.

Whether these investments and services are commercial, in-kind, or pro bono engagements.

Rationale

Combined with investment in its own operations, this metric captures the company’s capital contribution to the economy through provision of infrastructure services.

This metric expands upon the Economic Contribution metric to identify further contributions to long term value and a prosperous society.

GRI 203: Indirect Economic Impacts (2016) - Disclosure 203-1 Infrastructure investments and services supported

Employment and wealth generation

Significant indirect economic impacts

Examples of significant identified indirect economic impacts of the organization, including positive and negative impacts

Significance of the indirect economic impacts in the context of external benchmarks and stakeholder priorities (e.g. national and international standards, protocols, policy agendas)

Rationale

Indirect economic impacts such as economic development in areas of high poverty, improving or deteriorating social or environmental conditions and enhanced skills and knowledge in a community or in a geographic location are particularly important to assess as a facet of a company’s overall contribution to local communities and regional economies.

This metric expands upon the Economic Contribution metric to identify further contributions to long term value and a prosperous society.

GRI 203: Indirect economic impacts (2016) - Disclosure 203-2

Innovation in better products and services

Social value generated (%)

Percentage of revenue from products and services designed to deliver specific social benefits or to address specific sustainability c

Rationale

This metric captures the degree to which a business is generating products and services that support sustainability and can also provide insights into the capacity of the company to create new offerings through recognizing the benefits (e.g., revenue) from offering these products and services.

Adapted from: GRI (FiFS7 + FiFS8) and SASB FN0102‑16.a; EPIC Report (2018)

Innovation in better products and services

Vitality Index

Percentage of gross revenue from product lines added in last three (or five) years calculated as the sales from products that have been launched in the past three (or five) years divided by total sales, supported by narrative that describes how the company innovates to address specific sustainability challenges.

Rationale

The metric is a proxy to measure the effectiveness and productivity of a company’s investments in innovation and serves as a primary metric for the maturity phase of innovation.

Adapted from OECD Oslo Manual; Section 8.3.1

Community and social vitality

Total social investment ($)

Total Social Investment (TSI) sums up a company’s resources used for “S” in ESG efforts defined by CECP Valuation Guidance.

Rationale

This metric is a more inclusive definition of community investment, which seeks to capture the multiple ways in which companies can demonstrate their investment in social activities beyond traditional charitable giving investments.

CECP; Valuation Guidance

Community and social vitality

Additional tax remitted

Rationale

Companies may choose to report on additional tax remitted in order to provide global information on their further contribution to governmental revenues through the total taxes they collect in their business interactions with other taxpayers and remit to governments. The support that a company provides through this function enhances the operation of tax systems and reduces the administrative burden that governments otherwise would bear in collecting these taxes.

The total additional global tax collected by the company on behalf of other taxpayers, including VAT and employee-related taxes that are remitted by the company on behalf of customers or employees, by category of taxes.

Adapted from GRI 201-1 (2016) - Direct Economic Value Generated and Distributed

Community and social vitality

Total and additional tax breakdown by country for significant locations

Total tax paid and, if reported, additional tax remitted, by country for significant locations.

Rationale

Companies may choose to supplement their reporting of total tax paid, as well as additional tax remitted (if reported), by providing country-level information for significant business locations in order to highlight their contributions to governmental revenues and support for tax collections, in such countries.

Adapted from GRI 201-1 (2016) - Direct Economic Value Generated and Distributed

Principles of Governance Metrics

Governing Purpose

Setting purpose

The company’s stated purpose, as the expression of the means by which a business proposes solutions to economic, environmental, and social issues. Corporate purpose should create value for all stakeholders, including shareholders

Rationale

Oversight of a company’s chosen priorities in terms of economic, environmental, and social issues requires a clear understanding and articulation of the firm’s purpose. The more that firms can link their purpose and core business, the better they can deliver long‑term value for all stakeholders, including shareholders.

The British Academy and Colin Mayer, GRI (102-26), EPIC, and others

Quality of Governing Body

Governance body composition

Composition of the highest governance body and its committees by: competencies relating to economic, environmental, and social topics; executive or non-executive; independence; tenure on the governance body; number of each individual's other significant positions and commitments, and the nature of the commitments; gender; membership of under-represented social groups; stakeholder representation

Rationale

The capabilities and perspectives of board members are important for making robust decisions on an ongoing basis. This disclosure captures a variety of important dimensions to composition, going beyond a single metric, and emphasizing competencies relating to economic, environmental, and social topics.

GRI (102-22), GRI (405-1a), IR (4B)

Stakeholder Engagement

Material issues impacting stakeholders

A list of the topics that are material to key stakeholders and the company, how the topics were identified, and how the stakeholders were engaged

Rationale

This disclosure highlights the importance of the relationship between what is material to a firm and to its stakeholders; it captures the output of a process to understand the impact of the company on its stakeholders, and the implications for the company.

GRI (102-21), GRI (102-43), GRI (102-47)

Ethical Behaviour

Anti-corruption

Total percentage of governance body members, employees and business partners who have received training on the organization's anti-corruption policies and procedures, broken down by region

(a) Total number and nature of incidents of corruption confirmed during the current year but related to previous years (b) Total number and nature of incidents of corruption confirmed during the current year, related to this year

Discussion of initiatives and stakeholder engagement to improve the broader operating environment and culture, in order to combat corruption

Rationale

Corruption undermines stakeholder legitimacy and trust; it is linked to misallocation of capital, environmental harm, human exploitation and unethical and illegal behaviour.

Anti‑corruption training and investment in initiatives to improve both operating environment and culture develop a company’s anti‑corruption capabilities. The total number and nature of corruption incidents are a proxy for the effectiveness of a company’s overarching anti‑corruption culture and capabilities.

GRI (205-2) and GRI (205-3)

Ethical Behaviour

Protected ethics advice and reporting mechanisms

A description of internal and external mechanisms for

Seeking advice about ethical and lawful behaviour and organizational integrity;

Reporting concerns about unethical or lawful behaviour and organizational integrity

Rationale

This disclosure focuses on the ongoing ability of a company to both prevent and remedy ethical issues.

GRI (102-17)

Risk and Opportunity Oversight

Integrating risk and opportunity into business process

Company risk factor and opportunity disclosures that clearly identify the principal material risks and opportunities facing the company specifically (as opposed to generic sector risks), the company appetite in respect of these risks, how these risks and opportunities have moved over time and the response to those changes. These opportunities and risks should integrate material economic, environmental, and social issues, including climate change and data stewardship

Rationale

This disclosure focuses on company specific risks and opportunities, the onus on the board to oversee management of those risks and opportunities, and the corporate response over time as they change; it provides broad, management and board-centred insight.

EPIC, GRI (102-15), WEF Integrated Corporate Governance, IR (4D)

Governing Purpose

Purpose-led management

How the company’s stated purpose is embedded in company strategies, policies, and goals

Rationale

Embedding purpose within the company’s strategy and policies is necessary to realizing its stated benefits for all stakeholders, including shareholders.

GRI (102-26)

Quality of Governing Body

Progress against strategic milestones

Disclosure of the material strategic economic, environmental, and social milestones expected to be achieved in the following year, such milestones achieved from the previous year, and how those milestones are expected to or have contributed to long-term value

Rationale

An outcome-oriented measure of board and management quality, this disclosure focuses on the company’s achievement of its stated objectives. This disclosure combines both leading and lagging indicators of the board oversight and management’s ability to set, guide and execute on the company’s strategy.

EPIC

Quality of Governing Body

Remuneration

How performance criteria in the remuneration policies relate to the highest governance body's and senior executives' objectives for economic, environmental and social topics, as connected to the company’s stated purpose, strategy, and long-term value

Remuneration policies for the highest governance body and senior executives for the following types of remuneration:
1. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, and deferred or vested shares
2. Sign-on bonuses or recruitment incentive payments
3. Termination payments
4. Clawbacks
5. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees

Rationale

The incentives provided to board members and senior executives, and the way they are structured, can significantly reinforce or impede long-term value creation. Importantly, this disclosure requires the reporting organization to explicitly address how its approach to remuneration relates to the organization’s economic, environmental, and social objectives.

GRI (102-35)

Ethical Behaviour

Alignment of strategy and policies to lobbying

The significant issues that are the focus of the company’s participation in public policy development and lobbying; the company’s strategy relevant to these areas of focus; and any differences between its lobbying positions, purpose, and any stated policies, goals, or other public positions

Rationale

Consistency between corporate activity related to lobbying and the firm’s publicly stated purpose and strategy is a core component of alignment on long‑term objectives, which in turn is essential for long‑term value creation. Monitoring this consistency is an important element of overall transparency and the authentic pursuit of the company’s objectives.

GRI 415: Public Policy 2016

Ethical Behaviour

Monetary losses from unethical behaviour

Total amount of monetary losses as a result of legal proceedings associated with: fraud, insider trading, anti-trust, anti-competitive behaviour, market manipulation, malpractice, or violations of other related industry laws or regulations

Rationale

This metric is a critical advanced indicator of ethical behaviour, focusing on the company’s observed behaviour and relying on outside parties (regulators) and a robust formal process (enforcement and the courts) to assess that behaviour. Additionally, measurement in monetary terms facilitates comparison across firms.

SASB (510a.1)

Risk and Opportunity Oversight

Economic, environmental, and social topics in capital allocation framework

How the highest governance body considers economic, environmental, and social issues when overseeing major capital allocation decisions, such as expenditures, acquisitions and divestures

Rationale

This disclosure is an important way to gauge the quality of risk and opportunity oversight and the extent to which it incorporates economic, environmental, and social considerations. Capital allocation is at the core of any business model and illustrates the company’s longer-term priorities, and as such it is a leading indicator of long‑term value creation.

CDSB (REQ-02)