Key Performance Indicators

Legal base

Article 1 of the DIRECTIVE sets out that the non-financial statement contains information including: e. "non-financial key performance indicators relevant to the particular business;"

Relevant key performance indicators 

 The non-financial statement should include material narratives and indicator-based disclosures. In order to give a fair and comprehensive view of their policies, outcomes, and principal risks, companies are expected to use a smart mix of qualitative and quantitative information. This includes relevant key performance indicators (KPIs).

Companies are expected to report KPIs that are consistent with metrics actually used by them in their internal management and risk assessment processes. This enhances the overall relevance and usefulness of the disclosures, and effective transparency.

Companies should disclose key performance indicators that are necessary to understand their development, performance, position and impact of their activity. Some KPIs may be useful for a broad variety of companies and business circumstances. Other KPIs have more to do with issues and circumstances of a given sector. Companies are encouraged to disclose material KPIs, both general and sectoral. Companies, taking into account their specific circumstances and the information needs of investors and other stakeholders, are expected to provide a comprehensive picture of their business, including a "smart mix" of general, sectoral and, as used for internal management purposes, company-specific KPIs.

Companies are expected to disclose high quality KPIs that are broadly recognized metrics, widely used in their sector or for specific thematic issues, which could also improve comparability of information reported across companies.

Quantitative information is generally highly appreciated by users of information as it helps measuring progress, checking consistency over time, and comparability.

KPIs are also considered effective tools to connect qualitative and quantitative information, and to build linkages, enabling companies to provide a balanced and comprehensive view in a concise and effective manner.

KPIs should be used consistently over reporting periods in order to provide reliable information on progress and trends. Reported KPIs may, of course, evolve over time because of business or technical reasons. In these cases, companies should explain the reasons for changing. They may consider appropriate resetting of past information, and explaining clear and effectively how to factor these changes.

Companies are expected to explain data collection, methodology, frameworks relied upon, and analysis of the KPIs that they disclose. Companies should present the information in a way that makes possible the understanding of KPIs disclosed. For example, companies may explain why KPIs increased or decreased in the reporting year, and how KPIs might evolve in the future.

Companies are expected to present KPIs, where appropriate, in the context of targets, past performance, and comparison with peers.