In this process step, the previously recorded impacts are assessed according to their severity and probability of occurrence.
In this process step, you now evaluate all your previously collected impacts according to their severity and probability of occurrence. The severity is assessed on the basis of three criteria: Scale, Scope and Irremediability. To carry out the evaluation, go to the desired row of the impact and fill in the description and the numerical rating for the three criteria in each column.
For the scale, describe how serious the negative impact is or how beneficial the positive impact is for people and/or the environment. The description should remain generic. If relevant, company-specific information that influences the extent can be mentioned. In doing so, you should ensure that only measures that change the extent of the impact when it occurs are to be stated - as a rule, however, the probability of occurrence or extent are influenced by measures. The numerical evaluation (rating) is based on a 5-point scale, where 1 stands for “very low” and 5 for “very high” (1 to 3 = not significant; > 3 = significant). It is possible to assign decimal numbers. The materiality thresholds defined here are based on the CSRD guidelines.
Helpful question for the description: What are the consequences of the impact for the affected stakeholder group and how serious/beneficial are they?
The scope is used to assess how far-reaching the negative or positive impacts are. In the case of environmental impacts, geographical areas can be specified or, in the case of impacts on people, the number of people affected. For example, is the environmental pollution limited to a single site or does it affect all of the company's sites (i.e. does it systematically result from business activities)? The assessment is also based on a 5-point scale, where 1 stands for “very low” and 5 for “very high” (1 to 3 = not significant; > 3 = significant). It is possible to assign decimal numbers. The materiality thresholds defined here are based on the CSRD guidelines.
Helpful question for the description: How widespread (area: local/global, proportion of affected groups of people, proportion of product portfolio, etc.) is the impact?
Finally, in the case of negative impacts, the irremediability must be assessed, i.e. whether and to what extent these could be remedied. The assessment is also carried out on a 5-point scale, where 1 stands for “completely remediable” and 5 for “ not remediable” (1 to 3 = not significant; > 3 = significant). It is possible to assign decimal numbers. The materiality thresholds defined here are based on the CSRD guidelines.
Helpful question for the description: To what extent can the negative impact be remedied or people/environment be restored to the state they were in before the company's impact? What effort is required to eliminate the impact?
In the case of positive impacts, the assessment of irremediability does not apply. This means that only the “scale” and “scope” need to be taken into account.
In the case of potential (positive/negative) impacts, the probability of occurrence must also be assessed numerically. This is also done on a 5-point scale with the categories 1= 0%, 2 = 25%, 3= 50%, 4 = 75% and 5 = 100%.
Once you have filled in and evaluated all the columns, the last column, Impact materiality, shows you the overall evaluation from which the impact materiality results. Fig. 6 shows how the values are to be interpreted. A special feature is that in the case of potential negative impacts on human rights, the severity is prioritized over the probability of occurrence (ESRS 1.45).
The Continue button takes you to the next process step, the assignment.
From this step in the process, the comment function with history is also available to you. This displays the respective users, including the time stamp. Existing comments are highlighted with a turquoise marker including the number of comments stored so that you can see at a glance where feedback has already been received.
Practical note:
The comment function can be used to establish workflows, even if no direct approval via buttons is provided. For example, supervisors can mention an editor in the comment, who confirms the implementation after editing, and then the supervisor releases the entry. This method enables traceable and transparent coordination within your team.
Assistance
The assessment always requires a “gross assessment”, i.e. negative impacts in particular must be assessed as they would have been before the effects of compensatory (protective) measures.
You can find more specific descriptions of the scales in the table.
Further information on the materiality assessment can be found here:
How is the materiality assessment carried out?