Setting materiality thresholds

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Materiality thresholds define the level of significance a topic must reach before it is considered material in your organization’s ESG reporting process. In IBM® ESG Suite's Sustainability Reporting Manager, these thresholds determine whether an ESG topic and its related questions are tagged as material when you add them to a disclosure.

About this task

As a system administrator, you can set company-level thresholds for impact materiality and financial materiality under the Admin menu. These thresholds serve as benchmark for evaluating which ESG topics, based on their assigned value, are automatically considered material. When a topical question’s impact or financial materiality score meets or exceeds the set threshold, Envizi ESG Suite automatically tags any disclosure questions that are mapped to that topic as material.

Note: Materiality thresholds apply to the scores of topical questions in materiality frameworks. These topics represent ESG themes such as energy, water, or diversity. This helps help ensure that only disclosure questions relevant to material topics are tagged as material, which maintains consistency between materiality assessment and reporting frameworks.

Procedure

  1. Go to Admin > Organization Preferences.
  2. Under the Sustainability Reporting Manager section, go to Materiality Thresholds.
  3. Enter the wanted values for Impact Materiality Threshold and Financial Materiality Threshold. These values represent the minimum value that is required for a topical question to be considered material.
  4. Save your changes to apply across the whole organization.

Results

After you save the thresholds, the specified thresholds are used to determine whether topics and their related disclosure questions are material. When users add the disclosure questions to a disclosure, they are easily identified which ensures consistency when determining which ones qualify as material for reporting.

What to do next

Document your materiality assessment by using materiality frameworks. For more information, see Using the Envizi ESG Suite materiality framework and Creating custom materiality frameworks.

When you finish documenting your materiality assessment, you can create disclosures and use the content switcher when you add questions from reporting frameworks. For more information, see Adding questions.