Extra Financial Factors 

Extra Financial Factors Defined

• Extra-financial factors are those issues which are likely to have at least a long-term effect on business results and asset price performance but which lie outside the customary span of variables that get integrated into investment decisions.
• Extra-financial factors routinely analysed by the RI team include, but are not limited to, corporate governance, intellectual capital management, executive remuneration, human rights, occupational health and safety and human capital practices, innovation, research and development (R&D), customer satisfaction, climate change, consumer and public health, reputation risk, and the environmental and social impacts of corporate activity.
• These factors tend to be of a medium to long term nature, but may also act over the short term.
• They are also frequently difficult to quantify (at least at the start of efforts to do so).