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Banca Monte dei Paschi di Siena - Sustainability Tree Matrix (STM)

Added on 22-03-2013


Banca Monte dei Paschi di Siena



Business challenge

Since 2001 Banca Monte dei Paschi di Siena have been publishing socio-environmental reports to communicate its extra-financial attitudes, which are believed to have positively contributed to the bank’s general performance over its history. But when it comes to measuring and tracking these extra-financial assets there was no systematic program in place.

Banca Monte dei Paschi di Siena believes that CSR is a corporate factor that can contribute to optimizing the group’s overall value based management system. Thus a measurement and economic valuation model for the most important extra-financial components of the business aimed to address a better understanding and controlling of issues that lie on the heart of the bank’s medium and long-term success.


Objectives of the solution :

  • Measuring and tracking non-financial information;
  • Stimulating performance in non-financial areas;
  • Helping on the better understanding of the connection between financial and non-financial performance;
  • Helping on integrating non-financial information into corporate process;
  • Moving towards an integrated reporting with both financial and non-financial information.

Implementation process:

  • The idea came from the CSR team and was approved by the CEO in 2009, starting phase 1 of the project;
  • CSR and HR department worked together in identifying which non financial metrics were already being collected and used;
  • There was already an IT software supporting the collection and flow of the non-financial data in place;
  • Working groups were set up to define which key metrics would better describe their CSR domain, this process took 5 months;
  • Used benchmarking activities provided by CSR Europe to complete the model;
  • Moved on to phase 2 of the project in 2010, when they began to investigate the co-relation between financial and non financial performance, other people came on board to study the factor;
  • Corrected some factors that composed the model;
  • Worked with other parts of the bank to set up the sustainability matrix;
  • Aggregated a lot of indicators for then deciding for and setting up the ones key to their business, started collecting around 100 indicators and now make use of 35 basic indicators;
  • Defined a weighting system approved by top management to be used as the sustainability index;
  • The indicators were weighted and combined into the sustainability index;
  • The internal reporting of the index is periodically sent to managers and CEO who provide comments and inputs as a feedback;
  • After approval the information was used at a top management level for the first time in 2010;
  • The bank started setting goals for managers related to the index and the KPI was also included in their incentives program;
  • The phase 3 of the project, in 2011, comprises writing an operating procedure to describe the processes of the model and;

Defining a more appropriate IT supporting tool for the non financial information

Challenges/Lessons learned:

Banca Monte dei Pasci di Siena was able to come up with a complete and sophisticated sustainability index for its business which is being used at a top management level and is part of their goals and incentives. The results are shared internally on a periodic basis and are being integrated to the business planning. Banca Monte dei Pasci di Siena is now skilled to collect and manage non-financial information on a strategic way, being able to monitor the proper use of the data base and detect improper use of profits with ineffective activities. The tool is helping them moving on with the process of having an integrated report for financial and non-financial information and having both aligned to business strategy.

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