Add and assess an IRO – impact and financial effect

You record an IRO in the DMA exactly once and answer two questions about it: does your company affect people or the environment, and does it affect your finances? Each side that applies is assessed by scoring or by written reasoning.

Prerequisites

• The topic’s DMA has the status “Draft”.
• You have the role Administrator, Manager or Editor.

Step by step

1. On the DMA page, click “Add IRO” – in the “Matrix” section, above the IRO table, or on a sub-topic area card, which is then preselected. The wizard takes you through Source, Description, Impact, Financial effect and Outcome.
2. Source: Keep “Our own records” or choose “A stakeholder engagement” (see Record stakeholder engagement on an IRO). Click “Next”.
3. Description: Fill in “Name”, “Description”, “Sub-topic area” and “Value chain position”. If no area fits, choose “Something else — a topic of your own” and enter a topic name.
4. Impact: Answer “Impact on people or the environment”. For “No”, one line under “Why there is no impact” is enough. For “Yes”, choose “Time horizon”, “Negative or positive”, “Actual or potential”, for negative impacts “Human rights impact” where it applies, and then the “Assessment method”.
5. Financial effect: Answer “Financial effect on us”. For “Yes”, choose a separate time horizon, risk or opportunity, “Arises from”, for climate the “Category”, at least one of the “Areas affected” and the assessment method. “Quantified effect” is optional; if it is empty on a material financial side, “Why no figure” appears. At least one of the two sides has to apply.
6. Outcome: Review the outcome, the scores and “What saving this does”, then click “Save”.

How scoring works

• “Scoring” on the impact side: you rate “Scale”, “Scope” and – for negative impacts only – “Irremediable character” from 1 to 5. The average times 5 gives the score (at most 25). A potential impact is also weighted by “Likelihood”, except a negative human rights impact, where severity alone counts.
• On the financial side, “Magnitude” times “Likelihood” gives the score, again at most 25.
• A side is material at 12.5 of 25 or above; the threshold is fixed. The IRO is material as soon as one side is material. Example: an actual negative impact rated 4, 4, 4 scores 20.0; magnitude 4 and likelihood 4 score 16.0.
• “One dimension is high.” If an actual negative impact scores below 12.5 although one dimension is at 4 or 5, you make “Your decision”: material because of that dimension, or not material with a reason under “Why the average is right”.
• “Written reasoning”: you write the “Reasoning” and choose the “Decision” yourself. Such sides have no position on the matrix.

Save an unfinished IRO

Once source and description are filled in, you can click “Save” in any step. The message then reads “IRO … saved — it has no outcome yet”. Later, open the IRO from the table and complete it with “Edit”. Until then, the completeness check reports it as an IRO without an outcome.