Analysis of social and environmental performance trends

Social and Environmental Performance: trend analysis with SPI Online tools

SPI Online audit tools capture social and environmental data for informed management and decision-making at financial institutions. These audits, supervised to guarantee data quality, cover a wide range of institutions, from traditional providers to digital suppliers.

SPI Online audits assess six dimensions of the Universal Standards, including a seventh dimension (optional before 2022) for environmental performance. The dimensions relating to the balance of financial and social performance (dimension 6), as well as responsible treatment of employees (dim. 5) and customers (dim. 4), achieve the highest scores. This corresponds to a responsible approach, where customers and employees are protected, and where financial results are not the exclusive objective. The dimensions focusing on management’s commitment to social and environmental objectives (dim. 2) and the definition and monitoring of these objectives (dim. 1) are more demanding, and underline their crucial importance for the strategic success of institutions.

Environmental assessments were included in 60% of audits, showing a growing interest in these topics. However, scores remain low (29% for SPI4 - a comprehensive audit tool - and 39% for ALINUS, an investor due diligence tool), indicating significant room for improvement in environmental performance.

Of course, scores vary according to context, region and legal status. The key is to start the process at your own pace: measure your performance, compare it with that of your peers, identify areas for improvement, define an action plan and implement it.

Perseverance pays off, and audits help identify quick wins

Institutions that carry out repeated audits show significant progress. An analysis of institutions that have carried out three or more audits reveals a steady improvement in scores, from 72% at the first audit to 77% at the third. This progress reflects the institutions’ efforts to implement the recommendations of previous audits.

The fastest progress was made in product design (dim. 3) between the first and second audits: work on improving products and services led to rapid gains. Balancing financial and social performance (dim. 6) requires a more sustained commitment, with no marked difference between the first and second audits.

Effective management of social and environmental performance enhances the quality of your portfolio

One positive and pragmatic result in favor of social performance management: institutions with higher SPI scores tend to have better portfolio quality, with a lower portfolio at risk rate (PAR 30). This correlation is particularly strong in dimensions linked to customer protection, responsible treatment of employees and management commitment to social objectives. Financial performance and social performance go hand in hand!

Committed to sustainability

SPI Online audit scores provide crucial insights for building institutions’ social and environmental strategies. Using the Universal Standards and audit results, institutions can measure their performance, refine their strategies, improve their practices and better align their social and environmental objectives with their financial performance.

More than a set of best practices, social and environmental performance management is a commitment to sustainability and positive impact on the communities served. Even in the face of complex challenges, a methodical, customer-focused approach can lead to tangible, beneficial results.