Dr Axel Hesse

The test is consistent: data should be financially material, industry-specific, globally comparable and useful for decisions on risk, valuation and capital allocation.

• Broad frameworks that are not industry-specific risk generating large reporting volumes while offering institutional investors limited portfolio usability.
• Hesse asks which ESG information actually helps investment decisions, and argues that a relatively small number of sector-specific, financially material KPIs often carries the most relevant long-term signals.

One post states that three to nine standardised material ESG KPIs per industry are enough to steer equity, corporate bond and credit portfolios, and points to 14 years of standardised material KPIs available to banks and asset managers. Another traces the approach to the SD-KPI Standard 2010, described as a common minimum standard for financially material ESG KPIs across 68 industries.

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The recurring claim is that the question facing Europe is no longer how much ESG data should be reported, but which information is useful for investment decisions.

• Globally aligned frameworks such as SASB and ISSB gain relevance because they address that question.
• A reported EU move to align ESRS more closely with ISSB is read as a shift from broad, complex reporting toward a clearer separation of financial materiality from impact materiality.

One post reports that the EU is considering a last-minute alignment of ESRS with ISSB, framing it as a move from ESG as narrative to ESG as part of financial analysis. Another states that investors are increasingly asking which ESG factors affect risk, return and capital allocation rather than what should be disclosed.

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Dr Axel Hesse says this does not contradict market efficiency; financially material signals can be identified and structured consistently over time, and are not always fully priced immediately.

Figures given include long-term ESG time series of 17 or more years covering roughly 15,000 to 16,000 companies, applied through tilting approaches with no exclusions. The stated results are persistent but moderate effects, alongside a note that past performance, including backtested results, does not guarantee future results.

The 2023 post makes the performance claim more confidently, saying that integrating standardised material ESG KPIs into mainstream portfolios yields risk-adjusted outperformance effects, without a past-performance caveat. Later posts narrow this to moderate effects, explicitly describe the application method and add the past-performance qualification—a visible shift from promotional framing toward a more hedged one as the regulatory argument develops.

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Dr Axel Hesse returns to the SD-KPI Standards as an early working example of financially material, sector-specific ESG KPIs, and cites documented overlap with SASB to argue that the direction now visible in ISSB and SASB was already embedded in earlier frameworks. The approach is presented as predating the current regulatory consensus and having been validated by it.

One post states that the SD-KPI Standard 2010 brought together ESG analysts and sustainability experts to define a common minimum standard across 68 industries, and that in 2016 SASB noted a high degree of overlap between SD-KPI analysis and SASB industry standards. A later post repeats the 2010 origin and 2016 overlap, alongside the SD-KPInform database, described as covering 15,000+ companies with 17 years of history.

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Read it before the longer posts for a quick introduction.

Hesse calls ISSB/SASB the comprehensive global baseline for financially material ESG disclosure, then makes the case for three to nine standardized material KPIs per industry to steer equity, corporate bond and credit portfolios.

• The post points to 14 years of standardized material KPIs for banks and asset managers, and says integrating them into mainstream portfolios has produced risk-adjusted outperformance effects.
• It links to a presentation at the WM Datenservice International Financial Standards Conference and to SD-KPI standards material.
• Hesse makes the claim confidently, without the past-performance caveat included in later posts.

For brands planning a campaign

A data provider building its own KPI methodology can use this post as a compact pitch for narrow, sector-specific, decision-useful indicators rather than broad disclosure. It is also the clearest example of the conference and standards material Hesse draws on—an asset a partnership could reuse or co-present.

It explains why the debate has shifted from how much companies should report to which information investors can actually use.

Hesse frames the SFDR 2.0, ESRS and ISSB debate around four tests for useful ESG data: financially material, industry-specific, globally comparable, and decision-useful for risk, valuation and capital allocation.

• The post argues that the European question is no longer how much to report, but which information helps investment decisions.
• It warns that broad, non-industry-specific frameworks can produce large reporting volumes with limited portfolio usability.
• Hesse traces the idea to the SD-KPI Standard 2010, built with ESG analysts and sustainability experts across 68 industries, and notes that SASB saw a high degree of overlap with that analysis in 2016.
• The SD-KPInform database is described as covering 15,000+ companies with 17 years of history and sector-specific KPIs; historical portfolio applications show long-term positive performance effects.
• The post explicitly notes that past and backtested results do not guarantee future results, and invites asset owners, asset managers and index providers to respond.

For brands planning a campaign

The four criteria give a partner a ready-made framework for its own messaging.

• The closing question invites a comment or reply that puts a provider's methodology before the same audience.
• The 68-industry and 15,000-company figures give a campaign concrete numbers to work with, subject to checking against the provider's own data.

Read it to see how the argument holds up under scrutiny from a portfolio manager.

Hesse reports that the EU is considering a last-minute move to align ESRS more closely with ISSB, separating financial from impact materiality and pushing ESG toward decision-useful, financially relevant information.

• The post revisits the 2010 SD-KPI origin and 2016 SASB overlap, then describes long-term ESG time series of 17+ years and roughly 16,000 companies used to tilt portfolios toward financially material signals without exclusions.
• Hesse reports persistent but moderate effects on return, risk and risk-adjusted performance across different implementations.
• They say this does not contradict market efficiency: material signals can be identified and structured consistently over time, and are not always fully priced immediately.
• The post asks which ESG factors are truly material and how consistently they are applied.

For brands planning a campaign

For a campaign aimed at investment teams rather than sustainability teams, this post brings the argument into financial analysis. A provider can build a webinar or explainer around the tilting approach and the market-efficiency concession, which Hesse frames in terms a portfolio manager will accept.

Dr Axel Hesse argues that broad, non-industry-specific frameworks risk producing large reporting volumes with limited portfolio usability. They say a relatively small number of sector-specific KPIs per industry is enough to steer equity, corporate bond and credit portfolios: three to nine standardised material ESG KPIs per industry.

The argument turns on a contrast: how much ESG data should be reported, versus which information is useful for investment decisions? A short numbered list of criteria and a concrete KPI count answer the question, rather than a general endorsement of more disclosure.

For brands planning a campaign

A strong fit for a data provider pitching financially material KPI methodology. The post offers a rationale for keeping indicator sets narrow and sector-specific, and for framing investor messaging around decision usefulness rather than reporting completeness.

Examples: Source 1 · Source 2 · Source 3

One reports that the EU is reportedly considering a last-minute move to align ESRS more closely with ISSB.

• Dr Axel Hesse reads this as a shift from broad, complex ESG reporting toward a clearer separation of financial materiality from impact materiality.
• The recurring question is which ESG factors actually affect risk, return and capital allocation.
• Globally aligned frameworks such as SASB and ISSB are presented as gaining relevance for that reason.

The posts report a current regulatory development, state its reported status, then translate it into a directional claim about the future of ESG reporting. Short bulleted lists separate the ‘from’ and ‘to’ positions.

The EU move is reported as conditional, not confirmed. Ask for an update before presenting the alignment as settled.

For brands planning a campaign

Useful for investor messaging around regulatory transition, and for positioning a KPI methodology as aligned with the direction of convergence between ESRS and ISSB rather than earlier broad-disclosure approaches.

Examples: Source 1 · Source 2

One post states that the SD-KPI Standard 2010 brought together ESG analysts and sustainability experts to define a common minimum standard across 68 industries.

• It also says that in 2016 SASB noted a high degree of overlap between SD-KPI analysis and SASB industry standards.
• This history supports the argument that the direction now visible in ISSB and SASB was already embedded in earlier financially material KPI frameworks.

Provenance serves as evidence: an earlier standard and a documented overlap with a now-mainstream framework show continuity rather than novelty.

For brands planning a campaign

A data provider can lead with a defensible origin story and an overlap claim when explaining why its KPI set resembles SASB-aligned standards. Source any overlap assertion to the original comparison; don’t present it as a general equivalence.

Examples: Source 1 · Source 2 · Source 3

One gives 14 years of standardised material ESG KPIs; others cite 17 years and coverage of roughly 15,000 to 16,000 companies.

• Portfolio integration uses tilting approaches without exclusions, with persistent but moderate effects on return, risk and risk-adjusted performance.
• Dr Axel Hesse argues that this does not contradict market efficiency, but suggests financially material ESG signals can be identified, structured consistently over time and are not always fully priced immediately.

Claims are supported by duration and coverage figures and a stated application method, and framed as measured observations rather than strong performance promises.

The posts state that past performance, including backtested results, does not guarantee future results, and describe the effects as moderate.

For brands planning a campaign

Relevant to a data provider marketing a long history and portfolio application, but performance claims are deliberately hedged. Keep the same moderation and past-performance qualification; don’t turn the findings into a return claim.

Examples: Source 1 · Source 2 · Source 3

The posts invite readers to request more information or test access. Ask Hesse to clarify their relationship with SD-M.

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The post links to the presentation story; no sponsorship, client, or other commercial relationship is stated.

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One post works through the revised EFRAG ESRS exposure drafts point by point, noting structural improvements and wording changes that matter to auditors; the other asks whether simplifying standards supports accountability. Hesse likewise examines ESRS, ISSB and SASB, asking which parts of the frameworks carry decision weight for investors.

Dunstan Allison-Hope reasons from business and human rights: the UN Guiding Principles, the CSDDD, the EU AI Act's fundamental rights impact assessment, and what corporate due diligence on impacts on people actually requires.

• Dr Axel Hesse reasons from investment data: which financially material, industry-specific KPIs belong in a portfolio and how they should be structured over time.
• Follow Allison-Hope for human rights due diligence; follow Hesse for ESG data used in capital allocation.

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Giovanna Jagger's posts ask whether organisations will change what they measure or only what they publish, and set out three questions: which ESG priorities their operations can influence, what evidence already exists, and where ownership or measurement is missing. Dr Axel Hesse applies the same test to investment data, asking which information is useful for a decision.

Giovanna Jagger works from corporate real estate, workplace strategy and healthy buildings, connecting building-level evidence to sustainability priorities and advisory work on aligning strategy, evidence and action.

• Dr Axel Hesse works from data standards and portfolio construction: industry KPI sets, long ESG time series and tilting approaches.
• They share an interest in the revised ESRS, but approach it from different practices.

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Thomas Palm describes supplier-level product carbon footprints, why a Catena-X certified calculation matters, and why compliance and sustainability teams should work from one shared data core. Dr Axel Hesse makes the parallel case for investor data: standardised, sector-specific, comparable KPIs, used within a single consistent structure over many years.

Thomas Palm focuses on the product and supply chain, using a software platform that collects primary data from manufacturers to inform supplier decisions about compliance and customer requirements. Dr Axel Hesse focuses on the portfolio, using industry-level KPI standards and index or framework questions to inform asset-owner and manager decisions about risk, valuation and capital allocation.

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The two posts are working notes on the revised ESRS exposure drafts and on whether simplicity or complexity better supports accountability in business and human rights.

• The ESRS post flags specific structural fixes — moving material impacts, risks and opportunities out of the strategy section, and policies and actions into metrics and targets — and warns that dropping the phrase 'for example' from ESRS S3 and S4 human-rights wording could change how auditors read the standard.
• The AI Act post argues that the non-AI-specific CSDDD may matter more for human rights due diligence at many companies than the AI Act's narrow fundamental rights impact assessment requirement, and recommends starting with the UNGPs and OECD Guidelines before moving to detailed rules.

The tradeoff is focus.

• Dunstan Allison-Hope writes about regulatory interpretation and human rights due diligence, not financially material ESG KPI sets, scoring thousands of companies or portfolio-tilting effects.
• A provider selling KPI data and investor messaging would gain standards expertise and credibility on materiality, but still need another voice for quantitative methodology and the asset-owner pitch.

Examples: Source 1 · Source 2

Both posts ask whether the revised ESRS will change what organisations measure or only what they publish, and set out a three-question starting point: which ESG priorities the buildings and workplace can influence, what evidence is already collected across the portfolio, and where ownership, measurement or action is missing.

• The posts are written for leaders whose sustainability activity sits with different teams in different formats, and who need to make that work legible to clients and investors.
• For a data provider whose buyers are corporates reporting under ESRS, Jagger offers a practical route into that audience.
• The same conversation applies whether an organisation reports under ESRS or answers questions from clients and partners.

The tradeoff is the buyer.

• Jagger's audience is corporate real estate and workplace leaders, not asset owners, asset managers or index providers.
• The posts discuss evidence collection and alignment inside a company, not KPI methodology, sector-specific indicator design or portfolio performance.
• A provider seeking to shape investor messaging would get a corporate-reporting user's perspective, not an investment-community argument.

Examples: Source 1 · Source 2

The two posts describe Ford's decision to calculate the Kuga's product carbon footprint entirely from primary supplier data, and the case for one shared data core across compliance and sustainability teams.

• Palm argues that 70 to 90 percent of a vehicle's carbon footprint occurs upstream, that OEMs and suppliers need granular bottom-up primary data, and that compliance teams already hold material data that sustainability teams re-collect.
• The Catena-X certified calculation and the free six-month supplier offer show how the tooling is being positioned.
• The second post diagnoses the organisational split: compliance and sustainability sit on different floors with different reporting lines while working from the same material and supplier data.
• This is the relevant alternative when the buyer task is supplier data exchange, IMDS, product carbon footprints or automotive compliance.

The tradeoff is the level and the audience.

• Palm works at the product and material level with OEMs, suppliers and compliance functions; the posts do not address financially material ESG KPIs, index construction, asset-owner decisions or portfolio risk and return.
• A provider seeking investor messaging on a small set of sector KPIs would get supply-chain data expertise and an industrial audience, but would need another voice for the investment-community framing.

Examples: Source 1 · Source 2