Intensity Score: Impact on the Company

This pillar focuses on evaluating the reputational damage, the financial and operational risk a company faces due to an ESG event.

The impact on the company takes into account the potential operational disruption and financial implications of the event. It also assesses the scale of reputational impact by considering the severity. The scale of these challenges determines the level of scrutiny the company faces, and hence, the potential reputational damage.

The ‘Impact on the Company’ will result in three levels:

• Not Material: Events classified as "Not Material" do not pose a significant risk to the company’s financial or strategic health. They may be considered minor issues that do not necessitate substantial changes in corporate governance, strategy, or operations.
• Material: Events at this level are deemed significant enough to impact the company’s operational or financial outlook. They might affect revenue streams, cause temporary disruptions, or require changes in business practices. These events necessitate proactive measures to mitigate their impact.
• Highly Material: Events classified as "Highly Material" are critical and could lead to severe consequences for the company’s financial and operational health. These events may affect the company's ability to operate, cause major reputational damage, or even threaten its survival. Such events could require drastic measures, including reorganization or changes to the company’s business model.

Examples: