LE6: Personal ESG Performance Targets – Above Green

(3.55 points)

Intent

This indicator intends to identify whether and to what extent, ESG issues are addressed in personnel performance targets. Including ESG factors in annual performance targets for all personnel can increase the entity’s capacity to achieve improved ESG performance.

Requirements

Select Yes or No: If selecting Yes, select applicable sub-options.

Does the entity include ESG factors in the annual performance targets of personnel?

Yes
- Does performance against these targets have predetermined consequences? (multiple answers possible)
  - Yes
    - Financial consequences - Select the personnel to whom these factors apply (multiple answers possible):
      - All other employees
      - Asset managers
      - Board of directors
      - C-suite level staff
      - Dedicated staff on ESG issues
      - ESG managers
      - External managers or service providers
      - Fund/portfolio managers
      - Investment analysts
      - Investment committee
      - Investor relations
      - Other: ____________
    - Non-financial consequences - Select the personnel to whom these factors apply (multiple answers possible):
      - All other employees
      - Asset managers
      - Board of directors
      - C-suite level staff
      - Dedicated staff on ESG issues
      - ESG managers
      - External managers or service providers
      - Fund/portfolio managers
      - Investment analysts
      - Investment committee
      - Investor relations
      - Other: ____________
No
- Provide additional context for the answer provided (not validated, for reporting purposes only)
  ________________________

Validation

Evidence: Document upload or hyperlink. The evidence should sufficiently support all the items selected for this question. If a hyperlink is provided, ensure that it is not outdated and the relevant page can be accessed within two steps.

Evidence requirements:

Existence of employee performance targets on ESG related issues to each of the selected personnel groups.
Clearly demonstrated financial and/or non-financial consequences for the selected personnel groups.
Targets must relate to all members within the selected personnel groups. If the target relates to a single employee, that employee should be listed as an Other.

Evidence examples may include but are not limited to:

Official documents from the entity describing rewards, penalties, or support associated with specific ESG-related targets.
Examples of financial consequence include employee KPI and bonus schemes. Examples of non- financial consequence include targets being covered in performance reviews, 'employee of the month' awards and recognition schemes.

Other: State the other employee type. Other answers should relate to groups of employees such as acquisition, development, or facilities teams, or specific personnel who have ESG targets assigned to them. Ensure that the other answer provided is not a duplicate of a selected option above (e.g., sustainability team when ‘dedicated staff on ESG issues’ is selected). It is possible to report multiple other answers.

Document upload: Participants may upload several documents. When providing a document upload, it is mandatory to indicate where relevant information can be found within the document.

See Appendix 4 of the reference guide for additional information about GRESB Validation.

Scoring

This indicator is scored as a Two Section Indicator (i.e. Section 1: 'Elements' response and, Section 2: 'Evidence' response).

Section 1:Fractional points are awarded depending on the participant having i.) financial or non-financial consequence of ESG targets and ii.) the selected group(s) of employees. Employee groups are not equally scored. Fractional points are then aggregated to calculate the indicator’s final score. It is not necessary to select all checkboxes to receive maximum points.

Other:Any ‘other’ answer provided will be manually validated and must be accepted before achieving the respective fractional score. If multiple ‘other’ answers are listed, more than one may be accepted in manual validation, but only one will be counted towards the score.

Section 2:‘Evidence’ is mandatory for this indicator. Therefore, no points will be awarded unless the hyperlink and/or the uploaded document is considered valid, based on the evidence criteria stated above. The evidence is validated which determines a multiplier, according to the table below:

Evidence: The evidence is manually validated and assigned a multiplier, according to the table below. The evidence must support the validation requirements. If any requirements are not met, the evidence may be partially accepted or not accepted depending on the level of alignment with the requirements.

Validation status	Score
Accepted	2/2
Partially accepted	1/2
Not accepted/not provided	0

Terminology

Annual performance targets: Targets set in annual performance reviews based on assessments of employee performance.

Asset manager: A person or group of people responsible for developing and overseeing financial and strategic developments of investments at asset level.

Board of Directors: A body of elected or appointed members who jointly oversee the activities of a company or organization as detailed in the corporate charter. Boards normally comprise both executive and non-executive directors.

C-suite level staff: A team of individuals who have the day-to-day responsibility of managing the entity. C-suite level staff are sometimes referred to, within corporations, as senior management, executive management, executive leadership team, top management, upper management, higher management, or simply seniors.

Dedicated employee(s) for whom ESG is the core responsibility: The employee(s)’ main responsibility is defining, implementing and monitoring the ESG objectives at entity level.

ESG manager: A person or a group who manages the ESG strategy and implementation of the entity.

External manager or service provider: Organizations, businesses or individuals that offer services to others in exchange for payment. These include, but are not limited to, consultants, agents and brokers.

Financial consequences: Monetary benefits (or detriments) incorporated into employee compensation structures. Financial consequences are contingent upon the achievement of the annual performance targets.

Fund/portfolio manager: A person or a group who manages a portfolio of investments and the deployment of investor capital by creating and implementing asset level strategies across the entire portfolio or fund.

Investment analysts: A person or group with expertise in evaluating financial and investment information, typically for the purpose of making buy, sell and hold recommendations for securities.

Investment Committee: A group of individuals who oversee the entity’s investment strategy, evaluates investment proposals and maintains the investment policies, subject to the Board’s approval.

Investor relations: A person or a group that provides investors with an accurate account of company affairs so investors can make better informed decisions.

Non-financial consequences: Non-financial benefits (or detriments), such as verbal or written recognition, non-financial rewards or opportunities. Non-financial consequences are contingent upon the achievement of the annual performance targets.

References

Alignment with External Frameworks

CDP Climate Change 2020 - C1.3 Employee Incentives

DJSI CSA 2019 - 4.3.1 Management Incentives

GRI Standards 2016 - 102-35: Remuneration policies

Good practice example: Please refer to page 27 at this link.