Defining the IROs Materiality Thresholds in Datamaran

[Double Materiality module]

Setting a materiality threshold is a critical step in your sustainability strategy. It allows you to distinguish between Impacts, Risks, and Opportunities (IROs) that are material to your organization and those that are not. Datamaran provides a data-driven approach to help you define this cut-off point confidently.

With the latest update, you can now also identify IROs that are bordering on your threshold, ensuring no critical IRO is overlooked due to a marginal score difference.

Why This Matters

• Precision & Control: You can set a specific numeric threshold that aligns with your strategic goals, ensuring your reporting focuses on what truly matters.

• Proactive Decision Making: The new "Close to threshold" indicator highlights IROs that are near your materiality cut-off. This allows you to spot IROs that might become material with small changes in data, helping you make more informed decisions during your reviews.

• Efficiency: Quickly visualize borderline IROs without manual calculation, speeding up your validation process.

How to Define Your Thresholds

1. Navigate to the Double Materiality module and select your analysis.

2. Click on the Materiality review tab to visualize your scored IROs.
   
   

3. Select Add thresholds.

   • You can apply up to four different thresholds corresponding to the four dimensions of double materiality: Positive impacts, Negative impacts, Risks, and Opportunities.

     

   • Note: The IRO thresholds are quantitative and depend on the scale resulting from your IRO score formula calculations.

   

4. Set the "Close to threshold" range (Optional)

   Once you have defined the threshold value for an IRO type, the modal offers an additional option to Flag scores close to threshold.

   • If you wish to use this feature, enter your desired range value in the provided field.

   Why set a range?
   Defining a "close to threshold" range creates a buffer zone around your strict cut-off point. This is crucial because a hard number might exclude an IRO that is statistically very close to being material. By setting a range, you acknowledge that minor variances in scoring shouldn't automatically disqualify an IRO from further discussion.

5. Click on Done to apply the changes.

6. Review the Results

   Back on the main screen, Datamaran automatically categorizes your IROs based on your settings:

   • IROs above the set threshold are marked as "Material".

   • IROs below are marked as "Not material". This creates your preliminary short list of material IROs.

Identifying Borderline IROs

If you applied the Close to threshold indicator, you can specifically review borderline IROs to ensure your assessment is robust.

1. If the view is currently filtered, untoggle the Material only filter to see the full list of IROs.

2. Look for the flag icon next to the score of specific IROs. These are the topics falling within the range you defined in step 4.

3. Action: Review these flagged IROs carefully. Since their scores are very close to your cut-off, a minor shift in data or stakeholder priority could move them from "Not Material" to "Material" (or vice versa). Use this insight to discuss these specific topics during your validation workshops.