Calibrating Materiality Scores

When you upload a Business Activity, materiality scores for impacts and dependencies are assigned based on the activity type (ISIC Class) using the ENCORE database. These results indicate potential impacts and dependencies and are convenient for prioritizing Business Activities for next steps.

However, to accurately assess nature risk, the materiality scores should be calibrated to reflect the actual impacts and dependencies for each of your Business Activities. If you have a large number of Business Activities, this may take some time. We recommend starting with the highest priority Business Activities first to uncover risk as quickly as possible.

Evidence for calibration

You must provide an explanation when calibrating a materiality result, and the platform will prompt you to provide the explanation. This will make it easy for an auditor or certifier to validate the process you used to determine materiality.

Calibrating a “No Data” result

While comprehensive, the ENCORE data are not complete. In some instances you will see “No Data” appear as a result. This means there was insufficient research available to assess materiality based on industry data, and you must provide your own materiality score using the calibration capability.

How to calibrate your materiality scores 

Adapted from the ENCORE methodology.

Impacts

Impact materiality ratings are meant to reflect the magnitude of the pressure exerted by your business activity at that location (e.g. area size used, volume of pollutants emitted), based on the size of your operation and the magnitude of pressure created by your business activity.

You can calibrate your impact materiality ratings based on these two factors:

1. Size of Your Operation. How does the size of your operation at this location compare to typical operations in your sector?

• Is your total financial output at this location substantially smaller than typical operations in your sector? This may warrant calibrating one level lower.
• Is your total financial output at this location substantially larger than typical operations in your sector? This may warrant calibrating one level higher.

If you are unsure how your operation's size compares to typical operations in your sector, use the ENCORE materiality rating until you gather evidence indicating whether your operation is larger or smaller than average.

2. Mitigation Measures in Place. Have you implemented mitigation measures to reduce the pressure created by your operations at this location?

• If you have not implemented any mitigation measures, use the ENCORE materiality rating. 
• If you have implemented measures that substantially reduce or nearly eliminate this pressure at this location (e.g., comprehensive pollution control systems, closed-loop water systems, significant habitat restoration), consider calibrating to Low or Very Low.
• If you have implemented measures that moderately reduce this pressure at this location (e.g., partial pollution controls, some water recycling, limited habitat protection), consider calibrating one level lower.

The ENCORE methodology indicates that the extent of your mitigation measures carries 3x more weight than the size of your operation when determining your overall impact materiality. This means that when considering the two above factors, mitigation measures matter more than the size of your operation- they should not be considered equally.

What if an Ecosystem Pressure doesn’t apply?

If an Ecosystem Pressure clearly doesn't apply to your Business Activity, you can calibrate it to Very Low and document your rationale. For example, if Marine Ecosystem Use appears as a material impact but your site isn't located near marine areas, you can justify a Very Low rating.

Reasons you might calibrate your impact materiality score

• Operational controls & mitigation measures:
  • You have implemented pollution control systems or waste treatment technologies that significantly reduce emissions or discharges
  • You maintain environmental management systems that minimize impacts beyond regulatory requirements
  • You have adopted best management practices that reduce ecosystem pressures compared to standard industry operations
• Physical infrastructure & technological solutions:
  • You have invested in technologies that reduce resource extraction or land conversion (e.g., recirculating aquaculture systems, vertical farming, precision agriculture)
  • Your facilities incorporate design features that minimize habitat disruption or species disturbance
  • You use closed-loop systems or circular processes that dramatically reduce waste outputs
• Business model characteristics:
  • Your specific operations/production methods are less intensive or damaging compared to industry averages
  • You have already transitioned to lower-impact processes or materials (e.g., sustainable sourcing)
  • Your business model emphasizes restoration, regeneration, or net-positive outcomes for ecosystems
• Temporal or scale factors:
  • The impact is intermittent or occurs only during specific operational phases rather than continuously
  • The geographic footprint or intensity of your impact is actually much smaller than the default assessment assumes

Dependencies

The dependency materiality ratings reflect how much your business activity relies on each ecosystem services. Consider what your company has already implemented and how your operations actually function. Where does your dependency materiality truly sit? 

Base your calibration on the two categories below. For each question, select one option from each column. If both factors point to lower materiality, use the lower rating. If they conflict, consider the factor that represents the greater constraint to your business.

Reasons you may calibrate your dependency materiality score

• Operational controls & redundancies:
  • You have alternative sourcing strategies or substitute materials/services available
  • You maintain significant inventory buffers that reduce immediate exposure
• Physical infrastructure & technological solutions:
  • You have invested in technological alternatives that reduce ecosystem service dependency (e.g., closed-loop water systems, artificial pollination, climate-controlled facilities)
• Business model characteristics:
  • Your specific operations/production methods are less intensive in this ecosystem service compared to industry averages
  • You have already transitioned away from processes that were previously dependent on this service
• Temporal or scale factors:
  • The dependency is seasonal or intermittent rather than continuous, making the materiality lower than suggested
  • The volume/scale of your reliance is actually much smaller than the default assessment assumes
  • Your exposure is short-term or transitional

Getting Started with Calibration

Begin by prioritizing your highest-risk Business Activities—those with the most material impacts and dependencies, or those located in ecologically sensitive areas. Calibrating these first will help you identify your most significant nature-related risks quickly.

Remember that calibration is an iterative process. As you gather more operational data, implement new mitigation measures, or modify your business practices, revisit your materiality scores to ensure they remain accurate. Regular updates will provide a more precise picture of your nature risk profile over time.

Key principles to keep in mind:

• Always document your rationale for calibration decisions with specific evidence
• Be conservative in your assessments—if uncertain, maintain the ENCORE rating until you have clear evidence to support a change
• Focus on material differences from industry standards rather than minor variations
• Consider both current conditions and any planned operational changes that may affect materiality in the near term

If you need further support calibrating your materiality scores or have questions about specific Business Activities, contact our team at support@dunya-analytics.com.