How to score IROs

Goal

Score consistently, and help your stakeholders do the same.

Introduction

Every question is scored from 1 (minimal) to 5 (very high). Respondents can give one overall score or break it down by the ESRS 1 criteria. The criteria depend on the type of IRO. The definitions below are the ones shown in the platform. They follow EFRAG's guidance and are the same for every assessment, so that an auditor never has to argue about what a 4 means.

Share this page, or your own summary of it, with interviewers and with survey respondents in your invitation.

Impacts

Criterion	Question to ask	Applies to
Scale	How grave is the impact for the people or the environment affected?	Positive and negative impacts
Scope	How widespread is it? How many people, how large an area, how far along the value chain?	Positive and negative impacts
Irremediability	How hard is it to undo? Can the harm be reversed, and at what cost?	Negative impacts only
Likelihood	How likely is the impact to occur? For an actual impact, it is already occurring.	Potential impacts

Scale, scope and irremediability are scored from 1 to 5. Likelihood is captured on the same five bands:

Band	Likelihood	Applied as
1	Very unlikely	20%
2	Unlikely	40%
3	Possible	60%
4	Likely	80%
5	Very likely or already occurring	100%

Positive impact score = average of scale and scope, multiplied by the likelihood. Negative impact score = average of scale, scope and irremediability, multiplied by the likelihood.

For impacts on human rights, ESRS 1 says that severity takes precedence over likelihood. Score the severity as it would be if the impact occurred, and do not lower it because the impact is unlikely.

Risks and opportunities

Criterion	Question to ask
Magnitude	How large is the financial effect on your company? Think revenue, costs, assets, access to finance and cost of capital.
Likelihood	How likely is the effect to materialise within the time horizon of the IRO?

Magnitude from 1 to 5, likelihood on the same five bands as above.

Risk or opportunity score = magnitude multiplied by the likelihood.

What a score means

Score	Meaning
1	Minimal. Negligible for the people affected, or for your finances.
2	Low. Limited and manageable.
3	Medium. Noticeable, requires attention.
4	High. Significant, requires action.
5	Very high. Critical for the people affected or for the company.

Because likelihood is applied as a percentage, a scored answer runs from 0.2 to 5, not from 1 to 5. Scores are then aggregated and rescaled at subtopic level; see How results are calculated.

Overall score or breakdown

Respondents can give one overall score from 1 to 5 instead of the breakdown. It is faster and keeps response rates up among external stakeholders. The breakdown gives you the components, which auditors and your own analysis will ask for. Recommend the breakdown to everyone who has the time, and use it yourself in interviews and focus groups.

Your own scoring thresholds

Large companies often have their own thresholds, for example euro bands for magnitude aligned with their enterprise risk management. The platform definitions cannot be replaced per assessment. Share your thresholds with respondents in the invitation or the welcome video; the arithmetic is the same as long as they score from 1 to 5.

Tips for consistent scoring

• Score the IRO as described, not the company's performance on it. A strong policy does not make an impact small; it may make it less likely.
• For negative impacts, score the gross impact, before the measures you take.
• When in doubt between two scores, use the comment field to explain. Comments feed the qualitative analysis in your report.
• Skip a question you cannot judge. A skipped question is excluded from the calculation. A guessed 1 drags the score down.

Output

• A shared basis for scoring that your interviewers and your respondents use, so an auditor never has to argue about what a 4 means.
• Scores that aggregate cleanly into the calculation; see How results are calculated.