ESG topics
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ESG topics are fields of action from the areas of E - Environmental, S - Social, and G - Governance. These are needed for sustainability reporting according to EU Directive CSRD (Corporate Sustainability Reporting Directive). Which of the topics must be included in the reporting is the result of double materiality analysis, also done in this menu item.
Overview of the fields of action
An overview of all fields of action created for or imported into the current management system can be found under "Risk management → ESG topics". Their gross and net score is shown alongside them.
Creating fields of action
A new field of action can be created with the "plus" button. If a field of action is selected at that moment, the new field of action is created as a node below this field. The dropdown-"plus" button is for creating a field of action on the topmost layer.
| Code | For the code, optionally enter the structuring of the field of action. |
|---|---|
| Name | For the name you must enter what the field of action is to be called. |
| Description | For the description you should describe/explain the field of action. |
| Remark | Here you can describe how the evaluation of the field of action was determined. |
Importing fields of action
HITGuard offeres the possibility of importing the list of topics as per ESRS 1 AR 16 (European Sustainability Reporting Standard).
Within the ESRS one finds the three topics of "Environmental (ESRS E)", "Social (ESRS S)", and "Governance (ESRS G)". These again contain subtopics which can be added to and edited.The import of ESRS fields of action is available in German.
Right-clicking on the top node of a tree representing the fields of action brings up the “Duplicate” option. This allows you to duplicate an existing structure for the fields of action, including all associated content and links. This is useful, for example, when an already developed ESRS structure needs to be further refined for a new reporting period.
When duplicating, the following information is carried over:
- the entire action area hierarchy with all subordinate nodes
- all links to risks, opportunities, and impacts
- descriptions and other recorded content
- individual customizations to the structure, such as added or removed nodes
Double Materiality
Each field of action on this page can be linked to risks, opportunities, and impacts. Risks, opportunities, and impacts can also be created directly within the field of action using a “Plus” button.
This serves to analyze dual materiality. The link to risks and opportunities reflects financial materiality and thus the outside-in perspective. The link to positive and negative impacts illustrates impact materiality and thus the inside-out perspective. Double materiality therefore highlights the relevance of individual issues based on their influence on the company from the outside and the company’s influence on the outside world.
Scores of the fields of action
Every field of action has two scores: net and gross.
Using the scores, the fields of actions are placed on the KPI.
Net score
The net score shows the value the topic would receive in the materiality matrix if only risks/opportunities & impacts assigned directly to it were considered.
Score = risk ratio | impact ratio (e.g., 20 | 5)
The ratios for the calculation of the field of action are determined as follows:
- Risk ratio = the highest absolute value of all risks and opportunities assigned to the field of action
- Impact ratio = the highest absolute value of all impoacts assigned to the field of action (positive and negative)
For fields of action of the lowest hierarchy level, the net score equals the gross score.
Fields of action that contain subfields only show a net score, if they have been evaluated directly.
::Example:The screenshot shows that the field of action "Energie" has a net and gross score of 2 | 11. This is made up of the highest risk ratio for the risks and opportunities (2) and the highest impact ratio of the impacts (11). Both scores are the same, because "Energie" does not have any subordinate fields of action.
Gross score
The gross score is the value the topic receives in the materiality matrix. It is the highest value from out of the net score of the topic and the net scores of any subordinate topics.
Fields of action with subtopics can have different net and gross scores if one or more of the subordinate topics has a higher risk ratio and/or a higher impact ratio.
- Example: The screenshot shows that the field of action "E1 Klimawandel" has a net score of 15 | 12, which shows its own evaluation. Its gross score, however, is 20 | 13, because "Anpassung an den Klimawandel" has a risk ratio of 20 and "Klimaschutz" has an impact ratio of 13. The full ross scroe of the ESRS is 30 | 21, because subordinate topics include the risk ratio 30 and the impact ratio 21.