🌐Double Materiality in Brightest

To enter double materiality data in Brightest navigate to the "Materiality Module".

The landing page of the Materiality Module is the double materiality assessment table. This assessment table includes all of the environmental, social and governance topics as well as sub-topics as identified in the European Sustainability Reporting Standards (ESRS) outlined by the European Financial Reporting Advisory Group (EFRAG).

In this table you can evaluate the individual topics and mark them as material or not material.

Table of contents:

How to evaluate a material topic

How to create a new material topic

Materiality Matrix

Double Materiality Matrix

How to evaluate a material topic

In the Materiality Module, you will see a list of all relevant topics and subtopics. You can filter your view to see all, topics that are material only, or see only environmental, social or governance topics.

To evaluate a topic, click on the gray "Evaluate" button in the Edit column.

If the topic is not material:

1. If the topic is not material, leave the "Material" option toggled off.

2. Provide an explanation as to why the topic is not material to your organzation in the field "Explanation". According to the CSRD (ESRS) reporting, an organization must state why the topic is determined to be "not material".

If the topic is material:

1. If the topic is material, switch the "Material" toggle on.

2. The form will prompt you to answer the following fields in relation to the material topic:

3. Geographic or Operational Boundary: select the geographic or operational scope or boundary of the material impact(s), risk(s) or opportunities. For example, does it affect your company at a regional scale, company-wide, or asset level etc.

4. Time Horizon: select the time horizon of the material impact(s). Will the impact be short-term, medium-term, or long-term? Typically, Short-term = 0-1 years, Mid-Term = 1-5 years, Long-term = 5+ years

Impact Materiality

1. Impact Potential: select the potential status of the material impact(s). "Actual" means the impact has or is already occurring, "Potential" means the impact is expected or likely to occur in the future, "None or N/A" means the impact is not expected to occur or is not material.

2. Impact Likelihood: select an option for how likely the impact, risk or opportunity is to occur

3. Impact Scope: select an option for how widespread the impact, risk or opportunity is

4. Scale of Impact, Risk or Opportunity: How significant is the impact, risk or opportunity on people and/or the environment?

5. Risk Mitigation Potential: select your organization's ability to address or mitigate any negative material impact(s) or risks. "Very high" means very easy to mitigate or achieve. "None or N/A" means cannot be mitigated or achieved.

6. Impact Materiality Score or Importance: The impact materiality importance or score for this topic to your organization (1-10 scale. 1 = lowest, 10 = highest)

7. Materiality Stakeholder Importance: The importance of this topic to your organization's stakeholders, including employees, investors, suppliers, customers, etc. (1-10 scale. 1 = lowest, 10 = highest)

8. Materiality Influence: Your organization's ability or capacity to positively influence or address this material topic (1-10 scale. 1 = lowest, 10 = highest)

Financial Materiality

1. Financial Value: Enter a financial value associated with this material theme if it has been determined to have financial materiality. The definition of what this financial value represents can be defined by your organization.

   1. For example, it can represent a financial risk to the company or it could be a budget that your company has allocated to this material topic. In the "Financial Materiality Category" field, you can select a financial materiality category from the dropdown menu. *Be sure to enter a positive value.

2. Financial Likelihood: How likely is this financial impact, risk or opportunity?

3. Financial Value Score Method: Which financial materiality scoring method do you want to use? Options: Financial value, Financial value * Financial Likelihood, Financial value * Financial Likelihood (adjusted for mitigation potential).

4. Financial Materiality Category: Select the financial materiality category from the dropdown menu that best represents the definition of the financial value you allocated to this material topic.

5. Click "Create or Update" and your changes will be saved to Brightest.

How to create a new material topic

Brightest has an extensive list of environmental, social and governance material topics that are predefined and in alignment with the CSRD (ESRS) standard. However, you also have the option to create custom material topics.

To create a material topic, click on the "Create topic" button in the top right menu bar.

1. Fill in the new material topic form:

   1. Name: enter the name of the topic

   2. Description: write a description of the topic

   3. Theme: select a theme from the dropdown menu that best describes the topic - environmental, social or governance.

   4. Select one of Brightest's sub-topics that best aligns with your custom topic

   5. Click save for the topic to be added to your materiality list of topics.

2. To fill out an evaluation for your new material topic, find it in your list of materiality topics. Then click on the gray "Evaluate" button. The form will ask

   If the topic is not material:

   1. If the topic is not material, leave the "Material" option toggled off.

   2. Provide an explanation as to why the topic is not material to your organization in the field "Explanation". According to the CSRD (ESRS) reporting, an organization must state why the topic is determined to be "not material".

   If the topic is material:

   1. If the topic is material, switch the "Material" toggle on.

   2. Complete the evaluation form as outlined above.

3. If you would like to edit your custom topic, you can do so by clicking on the white pencil edit symbol in the "Edit" column.

Materiality Matrix

To view your materiality topics in a matrix, click on the "Matrix" tab in the top left menu bar of your Materiality Module.

Once you've added materiality to a goal, you can view the Goal Materiality Matrix in the Materiality Module.

1. Navigate to the Materiality Module Click on the "Matrix" Select "Goal Materiality" next to the option "Generate matrix from".

2. This will show your organization's Goal Materiality matrix.

   1. The importance to your stakeholders is on the y-axis and the importance to your organization is on the x-axis. The rating scale is from 1 to 10; 1 is least important and 10 is most important. The bubble size is in relation to your organization's ability to positively influence the material theme.

   2. You can customize the matrix by clicking on the individual theme names in the legend to add or remove them from the matrix.

Double Materiality Matrix

To view your double materiality topics in a matrix, click on the "Matrix" tab in the top left menu bar of your Materiality Module.

Once you've added topic and financial evaluations to your material topics in the "Assessment" tab of the Material Module, you can view your Doublel Materiality Matrix.

1. Navigate to the Materiality Module Click on the "Matrix" Select "Double Materiality" next to the option "Generate matrix from".

2. This will show your organization's Double Materiality matrix.

   1. The importance to your stakeholders is on the y-axis and the importance to your organization is on the x-axis. The rating scale is from 1 to 10; 1 is least important and 10 is most important. The bubble size is in relation to the financial value which has been normalized to scale.

   2. You can customize the matrix by clicking on the individual theme names in the legend to add or remove them from the matrix.