The assessment of Impacts, Risks and Opportunities (IROs) is done by each company, using its own understanding of its business and value chain. Subject Matter Experts (SMEs) usually lead this, sometimes with input from relevant stakeholders.
Datamaran's IRO Hub gives you a structured way to score IROs against set criteria. The score then feeds the materiality threshold you set in the Materiality Review tab, which decides whether each assessed IRO is Material or Not material. Until you set thresholds, an assessed IRO shows as Undecided. See Defining the IROs materiality thresholds.
Default scoring approach
IROs are scored on a 1 to 5 scale across set criteria. The formulas for the final IRO score are:
- Risks & Opportunities: Magnitude × Likelihood / 5
- Impacts: Severity × Likelihood / 5
Where Severity is: (Average(Scale, Scope, Irremediability) + Max(Scale, Scope, Irremediability)) / 2
Note: irremediability applies only to negative impacts.
You can also use custom scales and custom formulas.
Criteria for assessment
For Risks & Opportunities:
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Classification (current / anticipated)
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Time horizon
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Magnitude
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Likelihood
For Impacts:
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Classification (current / anticipated)
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Time horizon
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Scale
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Scope
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Likelihood
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Irremediability (only for negative impacts)
Save your changes as you assess. You can also map IROs to ESRS-AR16 at this stage.
Viewing IROs
Use the filtering options to manage your IRO inventory. For more on assessment scales, contact the Customer Enablement team.