Datamaran's glossary & key terms

Disclosure Diagnostics’ metrics are metrics reflecting the level of external disclosure of the company and are listed in the Summary tab. They consist of two different metrics: Public Risk Disclosure and Overall Disclosure Benchmark.

 

Executive Dashboard is a fully automated external risk management platform. Designed to support senior leaders and board members, it delivers company-specific analytics based on inputs selected by the user. 

 

External Risks Analysis is the main output of the Executive dashboard and the way risks are assessed based on a selection of curated key parameters selected by the company.  

 

External risks according to COSO (the Committee of Sponsoring Organizations of the Treadway Commission) is defined as: “The possibility that events will occur and affect the achievement of strategy and business objectives.” This includes negative effects (such as a reduction in revenue targets or damage to reputation) positive impacts (that is, opportunities – such as an emerging market for new products or cost-saving initiatives). 

Financial Issues: Refers to events that change or challenge the financial position of a company.

Example: The American Water Works share price is $141.65 per hour.

Legal highlights/issues: Description: refers to events or actions regulated by law which concern a company.

Example: US labor agency sues Starbucks over treatment of Seattle workers

Natural Language Processing (NLP) is a branch of Artificial Intelligence (AI) that aims to process large amounts of qualitative (i.e. text) data in a similar way that humans would. Datamaran uses NLP to process qualitative data from publicly available sources. 

Ontology is Datamaran’s patented list of risks listed under ESG + themes: Covering Environment, Social, Governance, Economic, Employee, Innovation, & Tech topics. These form the foundation of Datamaran’s risk universe. The Ontology is made up of the following three layers: Issues or Risks, Topics and Factors. A full description of these can be found in: How does the Executive Dashboard work?

 

Overall Disclosure Benchmark indicates the position of the company relative to the peers or organizations selected in the Risk Analysis set-up. This is assessed in terms of external disclosure across all annual reports, including SEC filings (10-K); Financial report and Sustainability Report disclosure. It is evaluated on a three-level scale: ‘Lagging’: meaning your risk disclosure is less than that of selected peers; ‘Middle’: your disclosure of the risk is in line with that of selected peers; and ‘Leading’: your disclosure of the risk is greater than that of selected peers. 

 

Public Risk Disclosure indicates whether a risk is identified in the risk factors section (or equivalent) of the company’s most recent 10-K or Annual Report. It is evaluated on a three-level scale: ‘No’: no coverage of any underlying topics; ‘ Partial’: at least one underlying topic not covered; and ‘Full’: all underlying topics covered. 

 

Risk Description is one of the areas in which insights from the risk analysis are organised and presented in the Executive Dashboard. The risk description is a page specific to each risk and includes a high-level description of the risk together with a: 

  • Summary: presenting the key risk and disclosure metrics, as well as high-level recommendations to guide your risk management, board oversight and annual reporting processes.
  • Risk definition: presenting the underlying topics and factors for that particular risk.
  • Drivers: presenting the overall influence of each source on the volition of that particular risk. 

 

Risk Dimensions are the metrics against which the insights from the Executive Dashboard are measured and specifically:

  • Likelihood: indicates the likelihood score relative to all analyzed risks, calculated according to the prevalence of the risk across all analyzed sources.
  • Impact: indicates the anticipated impact to your company, calculated by the emphasis placed on related disclosures in your most recent annual sustainability and financial reports.
  • Velocity: indicates the direction of change in the likelihood score over the past three months. 

 

Risk drivers are the categories representing Datamaran’s sources analysed and specifically:

  • Competitive Risk: is the potential for competitors to negatively impact your business. In the Executive dashboard, it is assessed through the analysis of data from corporate reports. 
  • Short term regulatory risk: is a risk related to mandatory regulatory requirements that are already, or soon-to-be, applicable to your business. In the Executive Dashboard, it is assessed through the analysis of data from relevant hard laws. 
  • Long term regulatory risk: is a risk related to voluntary regulatory requirements that can influence hard laws in the long-term. In the Executive Dashboard, it is assessed through the analysis of data from relevant soft laws.
  • Reputational risk is the potential loss of financial capital, social capital and/or market share resulting from damage to a firm's reputation. In the Executive Dashboard, it is assessed through the analysis of data from online news. 

 

Risk Groups are one of the areas in which insights from the risk analysis are organised and presented in the Executive dashboard. 

On the Risk Group page, risks are further classified into: 

  • Fully covered: all topics included in the risk, as defined in the selected industry(-ies)’s universe of risks, are covered in your 10-K or Annual report risk section
  • Partially covered: at least one topic included in the risk, as defined in the selected industry(-ies)’s universe of risks, is NOT covered in your 10-K or Annual report risk section.

 

Risk Overview is one of the three areas through which insights from the risk analysis are organised and presented in the Executive Dashboard.

On the Risk Overview page all relevant risks are included and categorized into the following groups: 

  • Action Required is one of the categories in which insights from the risk analysis are organised. It bundles risks with a higher likelihood that require immediate review and action, and further splits them into:
    • New to assess – Risks not covered in the risk section of your 10-K or Annual Report.
    • Existing to review – Risks currently fully or partially covered in the risk section of your 10-K or Annual Report.
  • Monitored is one of the categories in which insights from the risk analysis are organised. It bundles risks with a lower likelihood that should be monitored,  and further splits them into:
    • New to monitor – Risks not covered in the risk section of your 10-K or Annual Report.
    • Existing to monitor – Risks currently fully or partially covered in the risk section of your 10-K or Annual Report.

 

Risk Universe is provided by ourOntology and represents the list of relevant risks for the industry (ies) that form the basis of the External Risk Analysis in the Executive Dashboard.

 

SASB's Sustainable Industry Classification System® (SICS®) is the industry classification on which Datamaran Executive Dashboard is based.

Sources are the publicly available documents from which Datamaran gathers qualitative data from. These are:

  • Company Reports: SEC filings (10-Ks),  Annual Financial Reports (including integrated reports) and Non-financial or Sustainability Reports
  • Hard Laws: Mandatory regulations with binding requirements 
  • Soft Norms: Voluntary non-binding initiatives 
  • Online News: News articles from online media