Questions & Answers
Can a sustainability matter be material from a positive impact perspective only?
- Materiality
- positive impact only material
Background
The question received by the submitter: ‘Can an impact be material if it is material from a positive impact perspective only?’ was reworded to the above question to be clearer.
Background as provided by the submitter:
‘It is essential that when I have evaluated and qualitatively assessed the actual/potential negative and positive effects on human beings and the environment, I have concluded that the topic is irrelevant in terms of actual negative impacts and also irrelevant in terms of actual positive impacts. However, it is critical from the perspective of potential positive impacts. Is my topic then considered significant?’
ESRS 1 paragraph 43 states: ‘A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term.’
ESRS 1 paragraph 46 states the criteria on which positive impacts materiality are based: ‘For positive impacts, materiality is based on:
(a) the scale and scope of the impact for actual impacts; and
(b) the scale, scope and likelihood of the impact for potential impacts.’
Answer
Yes, a sustainability matter can be material from a positive impact perspective only.
Based on the definition in ESRS 1 paragraph 43, a sustainability matter is material when it pertains:
(h) to material actual or potential impacts or
(i) to material positive or negative impacts.
Positive impacts can be either actual or potential.
ESRS 1 chapter 3.4 defines the criteria used to assess materiality. For actual positive impacts, the criteria are scale and scope. In addition, for potential positive impacts likelihood is considered.
ESRS 1 paragraph 45 describes the relationship between negative impacts and the due diligence process defined in international instruments (i.e., the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises). In particular, due diligence focuses on negative or adverse impacts on people and the environment, but this does not mean that impact materiality is limited to negative impacts under ESRS reporting.
Relations
Paragraph | Content |
|---|---|
3.4 Impact materiality | |
3.4 Impact materiality | |
3.4 Impact materiality | |
For positive impacts, materiality is based on: | |
A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term. Impacts include those connected with the undertaking’s own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships. Business relationships include those in the undertaking’s upstream and downstream value chain and are not limited to direct contractual relationships. | |
For positive impacts, materiality is based on: | |
A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term. Impacts include those connected with the undertaking’s own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships. Business relationships include those in the undertaking’s upstream and downstream value chain and are not limited to direct contractual relationships. | |
For positive impacts, materiality is based on: | |
A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term. Impacts include those connected with the undertaking’s own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships. Business relationships include those in the undertaking’s upstream and downstream value chain and are not limited to direct contractual relationships. |