ESRS 2 — Description of the Processes to Identify and…

Q: IRO-1 ESRS 2: what should I collect before drafting the disclosure narrative?

Start with the page’s datapoints to prepare: assessment method, steps, cut-offs, assumptions, inputs, severity and likelihood bases, priority setting, high-risk focus areas, due diligence input, stakeholder and specialist input, how that input was used, and any changes identified and explained. The page also has a step-by-step preparation section you can use to turn those inputs into a draft.

Q: How do I use the IRO-1 page to set the scope and methodology for the assessment?

Use the page to capture the assessment method, the steps taken, the decision cut-offs, the working assumptions, and the inputs used. That gives you a practical basis for explaining how the assessment was done without relying on a one-line summary.

Q: What evidence should I gather for IRO-1 ESRS 2 to make the disclosure assurance-ready?

The page points you to an evidence pack with five items and six assurance claims to verify, each framed as claim, risk and evidence. In practice, that means keeping the underlying support for the assessment process, the inputs, and the reported changes together in one pack.

Q: Who should own the IRO-1 disclosure inputs, and how do I assign responsibilities?

The page is designed for sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the people who can evidence the assessment method, inputs, and changes. Use the step-by-step preparation section and workbook to allocate tasks and track who provides each input.

Q: How do I turn the IRO-1 workbook into a draft disclosure?

Use the Prep & Assurance workbook to organise the datapoints, then use the draft-output section for visualisation ideas, narrative starters, and a content-index line. The page is set up to move you from raw inputs to a draft narrative in a structured way.

Q: What are the common mistakes to avoid when preparing IRO-1 ESRS 2?

The page includes a list of common reporting gaps and mistakes, so it is meant to help you check for missing method detail, weak evidence, or unclear explanations of change. Use that list as a final review before you lock the draft.

Q: How should I document stakeholder consultation for the IRO-1 disclosure?

The datapoints to prepare include consulted stakeholders, outside specialists consulted, and how their input was used. Keep those three elements linked so the disclosure shows not just who was consulted, but what influence the input had on the assessment.

Q: What does the IRO-1 page say about explaining changes from one reporting period to the next?

It asks you to capture identified changes and the explanation for those changes. That means you should be able to show what changed, why it changed, and how that affects the current disclosure.

Q: Can I use the synthetic example on the IRO-1 page as a template for my own disclosure?

Yes, as a drafting aid only. The page includes synthetic illustrative example disclosures, including a quantitative table, so you can see how the information may be presented, but you should replace it with your own company data.

Q: Where can I find supporting materials for IRO-1 ESRS 2 disclosure preparation?

The Download Centre provides a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf format. The page also links to a 'From company reports' table with real published reports for reference.

Disclosure focus

The practical emphasis is on whether the process is broad and systematic enough to cover the organisation’s real footprint, rather than only a few well-known or flagship sites. A useful explanation would show how the organisation looks across its own operations and, where relevant, its wider value chain, and how it makes sure important issues are not missed because they sit outside the most visible parts of the business.

This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official European Commission source.

Request the data

Request the impact-and-risk assessment process evidence

Translate the disclosure into an internal business question — then adapt it to your organisation's own language.

How do we currently identify, screen, prioritise and update the sustainability topics that matter most to the business?

Use your organisation’s own names for the process, committees, scorecards and review cycles first, then map them to the reporting disclosure. Keep the request in the language people actually use internally, and check the source material before sign-off.

Weak request

Please provide the ESRS 2:IRO-1 materiality assessment methodology, decision steps, thresholds, assumptions, inputs, severity criteria, likelihood criteria, prioritisation approach, heightened-risk areas, due diligence input, stakeholders consulted, external experts consulted, how input was used, changes identified and reason for change.

Why it fails: It uses framework language only, which can be hard for the business owner to recognise. It also bundles many concepts into one long ask, so the recipient may not know which internal documents or systems to check. That makes it slower to answer and easier to miss evidence.

Better request

Please share the documents and notes that show how your team reviews and ranks the sustainability topics that matter most for [period]. I need the process steps, the rules used to separate higher-priority items, the main inputs, the criteria used to judge seriousness and chance of occurrence, any higher-risk areas, who was consulted, how their input changed the outcome, and what changed since the last cycle. A short table plus source files or links is fine.

Formal email template

Subject: Request for process evidence for sustainability topic assessment

Hi [name],

We are preparing the reporting pack and need the evidence behind how [team / function] identifies, screens and updates the sustainability topics that are most important to the business.

Please could you share, for [period]:
- the method used to run the review
- the steps followed to decide what was included or escalated
- the cut-offs or rules used to separate higher-priority items from the rest
- the assumptions and judgement calls made
- the main inputs used, including any internal data, workshops, surveys, risk logs or external sources
- the criteria used to judge seriousness and chance of occurrence
- how items were ranked or prioritised
- any areas treated as higher risk
- whether due diligence work fed into the review
- who was consulted, including any outside specialists
- how that input was used
- what changed compared with the previous cycle, and why

If helpful, please return this in the table below or in your own format with the same information. Please include the source files or links where available.

[Insert response table]

Thanks,
[preparer name]

Short Teams / Slack version

Hi [name] — could you send over the evidence for how [team / function] reviews and ranks the sustainability topics that matter most, for [period]? Please include the method, steps, cut-offs, assumptions, inputs, seriousness/chance criteria, prioritisation approach, higher-risk areas, any due diligence input, who was consulted, how that input was used, and what changed since last time. A table or links to source files is fine. Thanks.

Industry examples

Manufacturing

Context. A group with several plants wants evidence from operations and EHS on how site-level issues are screened and escalated into the group review.

Adapted request. Please send the process note, workshop pack and risk log extracts that show how plant issues are screened, scored and escalated for [period]. Include the cut-offs used, the criteria for judging seriousness and chance of occurrence, the sites or lines treated as higher risk, and any changes made after consultation with site managers or external specialists.

Example response. Returned pack includes a process note, a scoring sheet, a list of plants reviewed, the escalation threshold, and a change log showing two new site risks added after the annual workshop.

Retail

Context. A consumer business wants evidence from strategy, risk and procurement on how supplier and customer issues are prioritised across the chain.

Adapted request. Please share the review pack that shows how customer, supplier and store issues were identified and ranked for [period]. Include the method used, the decision rules, the main data sources, the seriousness and chance criteria, any supplier regions or product lines treated as higher risk, and how input from procurement or external advisers was used.

Example response. Returned pack includes a workshop deck, a risk register extract, supplier survey results, a prioritisation matrix and notes showing that two supplier regions were moved into the higher-risk group after external input.

Draft your disclosure

Notes that turn data into a disclosure

LRA training templates — adapt them to your organisation, and check the official source before sign-off.

Method note

We can describe the basis of the assessment by setting out the method used, the steps followed to reach decisions, the cut-offs applied, the assumptions made, and the main inputs relied on.

Context note

This section can explain what the figures mean in practice by linking the assessment criteria, the ranking approach, any outside input, and the areas identified as needing closer attention.

Fluctuation statement

If the numbers moved during the period, we can explain that by pointing to the changes identified, the reasons behind them where known, and any shift in the inputs, thresholds, or external input used.

Content index entry

IRO-1 Description of the Processes to Identify and Assess Material Impacts, Risks and Opportunities — [location / page] / [notes]

Download Centre

Preparation tools & forms

Download preparation tools for IRO-1 with free verified email access for 24 hours. Source-report links remain public.

Free · Email access

01XLSPrep & Assurance workbookDatapoints, risks, evidence to check, owner and evidence pack.Get it free ↧ 02XLSData-request packRequest email, message template, response fields and sign-off structure.Get it free ↧ 03PDFLibrary CardPrintable one-page summary of this disclosure card.Get it free ↧

Check

For each claim, check the evidence

We used our own process notes to show how we mapped the figure to the parts of the business we actually reviewed, including relevant links in the supply chain and customer side where they mattered.
Risk An assurer may test whether the coverage was genuinely broad enough, or whether important parts of the business or value chain were left out without a clear reason.
Evidence to check Scoping papers, boundary memos, process maps, and working files showing which entities, sites, activities and value-chain stages were included or excluded, with reasons for exclusions.
We can point to the step-by-step review trail we followed, from initial screening through to the final judgement on what was included in the report.
Risk An assurer may look for gaps in the decision trail, unclear sequencing, or evidence that the judgement was made informally rather than through a defined process.
Evidence to check Assessment workflow, meeting notes, decision logs, review checklists, sign-off records, and version history showing the sequence of decisions.
Our files show how we extended the review beyond our direct operations to the wider chain where that was relevant to the assessment.
Risk An assurer may challenge whether the disclosed scope really covered upstream and downstream matters, or whether the boundary was set too narrowly.
Evidence to check Boundary methodology, scope rationale, supplier/customer screening records, and any maps or matrices showing how the wider chain was considered.
We kept a record of the methods, source data, assumptions and cut-offs we relied on when deciding what was material.
Risk An assurer may probe whether the approach was sufficiently robust, whether assumptions were arbitrary, or whether thresholds were set to steer the outcome.
Evidence to check Methodology paper, calculation sheets, assumption register, threshold settings, sensitivity checks, and approvals for any judgement calls.
We can show when the last refresh of the assessment was completed.
Risk An assurer may question whether the date is current, whether the assessment has been updated after major events, or whether the reporting period is misstated.
Evidence to check Project timetable, dated sign-off, board or committee papers, and the final version control record showing the update date.
The wording in the report reflects our own assessment work rather than a copied template.
Risk An assurer may test whether the narrative is generic, recycled from another report, or too vague to demonstrate the entity’s actual process.
Evidence to check Drafts with tracked changes, internal review comments, source working papers, and evidence that the narrative was tailored to the entity’s own process.

Evidence pack to prepare

The governing policy or written commitment behind this disclosureA methodology / definition note setting out how the disclosure was scoped and preparedSource-system exports the figures or facts were drawn fromThe internal approval / sign-off record for the disclosure before publicationMinutes or records evidencing the relevant engagement or consultation

Common reporting gaps

The information is presented without a date or as-at point.
The scope or boundary of the statement is left undefined.
Key terms are used inconsistently across the report.
Material changes since the previous period are not disclosed.
Assertions are made without supporting detail or a source record.
Boilerplate is used that does not actually answer what is asked.

Where drafts go wrong

Mistakes to avoid and where judgement is needed

The left column is what preparers get wrong while collecting; the right column is where you will have to make and explain a judgement.

Mistakes to avoid

Wrong ownerThe team asks the sustainability lead for process details that sit with operations, risk, legal, or procurement, so the evidence comes from the wrong part of the business.
Framework language onlyPeople ask for answers in ESRS-style terms instead of the organisation’s own working language, which produces vague responses that staff cannot verify against source records.
Scope left unclearThe data request does not state which business units, sites, or activities are in scope, so different teams send mixed coverage that cannot be reconciled.
Wrong time basisOne team uses the reporting year while another uses a later cut-off or an earlier snapshot, so the collected evidence does not line up to the same period.
Counting bases mixedHeadcount, incidents, and spend are gathered using different counting rules without being separated, which makes the underlying figures impossible to compare cleanly.
Source labels lostOriginal file names, system codes, case IDs, or document titles are stripped out during collection, so the trail back to the first record is broken.
Separate groups mergedData from different populations that should stay apart, such as sites, functions, or issue types, is combined too early and the detail needed for review disappears.
No evidence trailThe pack is assembled without notes on where each input came from, who checked it, and who approved it, so there is no clear sign-off history.

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Judgement needed

Setting the group boundary after a buy-in or saleUse the reporting perimeter that matches the period you are explaining, and if a purchase or disposal changes what sits inside the business, say when that change was brought into the assessment and how it affected the process steps and any updated findings.
Reconciling different local definitions across countriesWhere local rules or operating labels differ by country, choose one internal basis for the assessment, explain the mapping from local terms to that basis, and note any places where the comparison is not exact.
Deciding how to treat people or sites near the edge of scopeIf a worker group, supplier tier, site, customer segment, or community sits close to the boundary, state the rule used to include or exclude it and explain why that rule was applied consistently.
Choosing the cut-off date for the assessmentIf the process uses a year-end snapshot, an average over the period, or another timing point, disclose that choice and make clear how it affects what was seen as significant in the period.
Using estimates where direct measurement is not availableWhen the assessment relies on estimates, proxies, or modelled inputs rather than direct records, identify the main assumptions, explain why they were needed, and distinguish them from information taken straight from source data.
Setting the level at which small items are grouped or roundedIf you group low-value items, combine similar cases, or round figures, explain the rule used, show that the simplification does not change the overall picture, and keep the method consistent across the disclosure.
Handling sensitive people data through aggregationWhen privacy or confidentiality means you cannot show detailed people data, present it in grouped form, explain the aggregation rule, and make clear how that still supports the assessment of significance.
Applying one scoring method when evidence quality variesIf some parts of the business have strong records and others rely on weaker evidence, describe the scoring approach used, note where judgement filled gaps, and explain how you kept the comparison fair across the whole assessment.
Updating the process after a major business changeIf a restructuring, acquisition, disposal, or new operating model changes how the business is reviewed, say what changed, why the process was adjusted, and whether the latest assessment was run on the old or revised basis.

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Examples

How it reads on the page

Synthetic, written by LRA — not from a company report, not text from any standard.

Illustrative (synthetic) example — Food processing

Illustrative only. We first mapped the issues most likely to affect our business model and supply chain, then screened them using a simple scoring method that combined scale of effect, how hard it would be to put right, and how likely it was to happen. We treated matters as higher priority where the score crossed our internal cut-off, where our assumptions were more conservative, or where the issue sat in a known higher-risk part of the business; for this exercise, we used 18 internal and external data inputs, consulted 12 people from operations, procurement, HR and worker representatives, and brought in 2 outside specialists, whose views helped us refine the ranking and confirm 4 areas for closer due diligence. - Our method used a three-step review: identify, score, then rank; the cut-off for escalation was a combined score of 12 or more out of 20. - We assumed stable production volumes, unchanged supplier mix, and no major acquisition during the period. - We found 3 changes in the period: 1 new issue added, 1 issue moved up in priority, and 1 issue removed after further review.

Illustrative summary of the internal review used for this example (count)

Item	Count
Total inputs used	18
People consulted	12
External experts consulted	2
Areas flagged for closer due diligence	4
Changes identified	3

Synthetic illustration for training only; not legal, assurance, or filing advice.

Illustrative (synthetic) example — Apparel manufacturing

Illustrative only. We assessed our impacts by starting with a longlist of topics, then testing each one against agreed severity and chance criteria before deciding what to focus on first. In practice, we gave more weight to issues with larger potential effect, longer recovery time, wider reach, and stronger likelihood signals; we also paid special attention to labour-intensive sites and water-stressed locations, which we treated as heightened-risk areas. For this review, we drew on 15 information sources, spoke with 10 internal and external stakeholders, involved 3 independent advisers, and used their input to adjust the scoring, confirm that due diligence was needed for 5 topics, and record 2 material changes from the prior cycle. - Our decision path was: gather evidence, test against the criteria, then prioritise the most significant matters. - The working assumptions were steady demand, no major regulatory shock, and no sudden loss of a key supplier. - The period brought 2 changes: one topic became more significant and one dropped below our threshold.

Illustrative summary of the internal review used for this example (count)

Item	Count
Information sources used	15
Stakeholders consulted	10
External advisers consulted	3
Topics requiring due diligence	5
Changes identified	2

Synthetic illustration for training only; not legal, assurance, or filing advice.

Quality ladder

Basic
I used one screening process this year.
Better
I used one group-wide screening process this year, based on our internal criteria, to sort impacts, risks and opportunities by significance.
Best
I used one group-wide screening process this year across our operations and value chain, drawing on internal criteria, stakeholder and expert input, and due-diligence findings; we updated the list of priority topics because new site-level evidence showed higher exposure in two areas.

Check your understanding

Scenarios to work through

A group is drafting its materiality process note. The team has a workshop map and a spreadsheet of site, supplier and customer inputs, but the write-up only says the board reviewed the outcome.

QWhat extra process detail should be captured so a reader can see how the assessment was actually carried out?

Reveal model answer →

A preparer has ranked several issues using a scorecard. One issue was placed above the rest because it could cause serious harm even though the team thought it was less likely than others, and the draft does not explain why that issue came first.

QHow should the team explain its ranking approach so the ordering is understandable?

Reveal model answer →

The sustainability team consulted worker representatives and an external environmental adviser. Their draft mentions the meetings, but it does not say what parts of the assessment were shaped by that input.

QWhat should the preparer add about the use of outside and stakeholder input?

Reveal model answer →

Last year’s process focused mainly on operational sites. This year the team added a new supplier-screening step and changed the threshold for escalating climate-related issues after a severe weather review.

QWhat should the preparer disclose about changes in the process from one reporting cycle to the next?

Reveal model answer →

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Framework references

Relevant ESRS requirements and related disclosures

ESRS

IRO-1

within ESRS 2: General Disclosures

Open official source →

Guides that settle this question

ESRS 2 General Disclosures: basis of preparation, governance, strategy, business model, stakeholders, material IROs, content index and GDR →ESRS and CSDDD: Reporting, Due Diligence and Value Chain Responsibilities Compared →ESRS Double Materiality Assessment: A Step-by-Step Guide for 2026 →How to Prepare an ESRS Sustainability Statement: Complete Step-by-Step Guide →

Related & explore

General Basis for Preparation of Sustainability Statements → Card Disclosures in Relation to Specific Circumstances → Card Actions and Resources in Relation to Material Sustainability Matters → Card Metrics in Relation to Material Sustainability Matters → Card Policies Adopted to Manage Material Sustainability Matters → Card Browse all disclosures →

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FAQ

Questions this page answers

IRO-1 ESRS 2: what should I collect before drafting the disclosure narrative?+

How do I use the IRO-1 page to set the scope and methodology for the assessment?+

What evidence should I gather for IRO-1 ESRS 2 to make the disclosure assurance-ready?+

Who should own the IRO-1 disclosure inputs, and how do I assign responsibilities?+

How do I turn the IRO-1 workbook into a draft disclosure?+

What are the common mistakes to avoid when preparing IRO-1 ESRS 2?+

How should I document stakeholder consultation for the IRO-1 disclosure?+

What does the IRO-1 page say about explaining changes from one reporting period to the next?+

Can I use the synthetic example on the IRO-1 page as a template for my own disclosure?+

Where can I find supporting materials for IRO-1 ESRS 2 disclosure preparation?+

	Report A	Report B	Report C
Datapoint 1	✓ p.213	unclear	✓ p.87
Datapoint 2	✓ p.214	—	✓ p.90

Description of the Processes to Identify and Assess Material Impacts, Risks and Opportunities

What to collect before drafting

Assessment method

Assessment steps

Decision cut-offs

Working assumptions

Assessment inputs

Impact severity basis

Impact likelihood basis

Priority setting approach

High-risk focus areas

Due diligence input

Consulted stakeholders

Outside specialists consulted

Use of input

Identified changes

Change explanation

How to prepare it

Request the impact-and-risk assessment process evidence

Notes that turn data into a disclosure

Preparation tools & forms

For each claim, check the evidence

We used our own process notes to show how we mapped the figure to the parts of the business we actually reviewed, including relevant links in the supply chain and customer side where they mattered.

We can point to the step-by-step review trail we followed, from initial screening through to the final judgement on what was included in the report.

Our files show how we extended the review beyond our direct operations to the wider chain where that was relevant to the assessment.

We kept a record of the methods, source data, assumptions and cut-offs we relied on when deciding what was material.

We can show when the last refresh of the assessment was completed.

The wording in the report reflects our own assessment work rather than a copied template.

Mistakes to avoid and where judgement is needed

Mistakes to avoid

Judgement needed

How it reads on the page

Scenarios to work through

Ask the Knowledge Hub AI Assistant about this disclosure

Check your text

Relevant ESRS requirements and related disclosures

Questions this page answers

Secure your enrolment

Description of the Processes to Identify and Assess Material Impacts, Risks and Opportunities

What to collect before drafting

Assessment method

Assessment steps

Decision cut-offs

Working assumptions

Assessment inputs

Impact severity basis

Impact likelihood basis

Priority setting approach

High-risk focus areas

Due diligence input

Consulted stakeholders

Outside specialists consulted

Use of input

Identified changes

Change explanation

How to prepare it

Request the impact-and-risk assessment process evidence

Notes that turn data into a disclosure

Preparation tools & forms

For each claim, check the evidence

We used our own process notes to show how we mapped the figure to the parts of the business we actually reviewed, including relevant links in the supply chain and customer side where they mattered.

We can point to the step-by-step review trail we followed, from initial screening through to the final judgement on what was included in the report.

Our files show how we extended the review beyond our direct operations to the wider chain where that was relevant to the assessment.

We kept a record of the methods, source data, assumptions and cut-offs we relied on when deciding what was material.

We can show when the last refresh of the assessment was completed.

The wording in the report reflects our own assessment work rather than a copied template.

Mistakes to avoid and where judgement is needed

Mistakes to avoid

Judgement needed

How it reads on the page

Scenarios to work through

Ask the Knowledge Hub AI Assistant about this disclosure

Check your text

Relevant ESRS requirements and related disclosures

Questions this page answers

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