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How does the scoring of Material Issues work?
How does the scoring of Material Issues work?

Learn more on how the material issue scoring works and how the issues are segmented.

Nina Lee avatar
Written by Nina Lee
Updated over a week ago

Ansarada's Materiality Assessment software calculates scores for each ESG issue based on the ratings provided by stakeholders using a 5-point scale (from Lowest to Highest), with values assigned as follows: 0.2, 0.4, 0.6, 0.8, and 1.0. These scores are then used to determine the importance of each issue.

The internal score for an issue is calculated by taking the average of all scores provided by internal stakeholders for that issue (Axis X), and the external score is similarly calculated using external stakeholders' ratings (Axis Y). The average score for each issue is then determined by measuring its distance from the point (0,0) on a graph where Axis X and Axis Y intersect.

After obtaining scores for all issues, we sort them in descending order based on their average scores. Finally, we segment these issues into four categories as follows:

  • Segment 1: Issues ranked 1-10 are categorized as "Act Now."

  • Segment 2: Issues ranked 11-20 are categorized as "Monitor & Manage."

  • Segment 3: Issues ranked 21-30 are categorized as "Learn & Prepare."

  • Segment 4: Issues ranked 31-38 are categorized as "Consider & Review."

Some items that would be considered "lowest" on the materiality matrix segments do not necessary have the "lowest" selected by stakeholders within the assessment, and vice versa for the "highest" issues on the matrix. They are comparatively lower/higher than the remaining items as this would better for prioritization.

⚠️ Good to know

The Materiality Matrix shows segments 1 - 3, whilst segment 4 can be found in section 3.2 of the Materiality Report under "Segment 4: Consider & Review".

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