How we calculate your Financial Materiality results
Interpreting the risk matrix
The colour of each tile represents a different level of risk to your company. Below is an example of a risk matrix with the colours labelled and their corresponding meaning:
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Critical: Almost certain to have a severe negative impact on the organisation, potentially leading to critical operational, legal, or financial challenges
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Significant: Likely to have a substantial adverse effect on the organisation's ESG performance and may demand immediate corrective actions.
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Important: Could affect the organisation's ESG performance or reputation, requiring active management and monitoring.
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Informative: Could potentially have a minor impact on the organisation's ESG performance or reputation, no need for active management and monitoring for now.
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Minimal: Unlikely to impact the organisation's ESG performance in a significant way.
There are two ways your Financial Materiality Assessment results are calculated.
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If at least one Risk has a rating of Critical or Significant, the system will automatically recommend that the ESG issue is Material.
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If at least one Opportunity has a rating of High or Medium, the system will automatically recommend that the ESG issue is Material.
Each level of Criticality in the Risk corresponds to a numeric Risk rating. This rating then triggers a Materiality recommendation.
|
Preliminary Financial Materiality |
Material result |
|
|
Critical |
4 |
Trigger materiality recommendation |
|
Significant |
3 |
Trigger materiality recommendation |
|
Important |
2 |
Trigger materiality recommendation |
|
Informative |
1 |
|
|
Minimal |
0 |
For Opportunities, High and Medium levels of Potential upside will trigger a Materiality recommendation.
|
Degree of Potential Upside |
Material result |
|
High |
Trigger materiality recommendation |
|
Medium |
Trigger materiality recommendation |
|
Low |
|
|
Very Low |
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