Materiality of potential dependencies

Materiality of potential dependencies

To assess the potential importance of the contribution an ecosystem service makes to a production process, and the materiality of the impact if this service is disrupted, two aspects were considered:

• How significant is the loss of functionality in the production process if the ecosystem service is disrupted?
• Limited loss of functionality: the production process can continue as is or with minor modifications.
• Moderate loss of functionality: the production process can continue only with important modifications (e.g. slower production or use of substitutes).
• Severe loss of functionality: Disruption in the service provision prevents the production process.
• How significant is the financial loss due to the loss of functionality in the production process?
• Limited financial loss: Disruption to the production process doesn’t materially affect the company’s profits.
• Moderate financial loss: Disruption to the production process materially affects the company’s profits.
• Severe financial loss: There is a reasonable possibility that the disruption in the production process will affect the financial viability of the company.

The dependency materiality assessment reflects both these considerations. A very high materiality rating means that the loss of functionality is severe and that the expected financial impact is severe as well.

Materiality of potential impacts

To assess the importance of a potential impact of a production process on natural capital, the following three aspects were considered:

• How frequently might the impact occur?
• High: The impact and its resulting effects on natural capital are expected to occur continuously throughout the project life cycle.
• Medium: The impact and its resulting effects on natural capital are expected to occur regularly throughout the project life cycle (i.e. from several times per year to several times per month).
• Low: The impact and its resulting effects on natural capital are expected to occur only a small number of times in the project life cycle (e.g. only during construction/set-up).
• How quickly might the impact start to affect natural capital?
• 1 year: The impact and its resulting effects on natural capital will occur within one year of the start of the production process.
• 1-3 years: The impact and its resulting effects on natural capital will occur between one and three years after the start of the production process.
• 3 years: The impact and its resulting effects on natural capital will occur more than three years after the start of the production process.
• How severe might the impact be?
• High: The impact and its resulting effects are expected to cause major, irreparable, and long-lasting damage to natural capital.
• Medium: The impact and its resulting effects are expected to cause significant and lasting damage to natural capital.
• Low: The impact and its resulting effects are expected to cause minor, reparable, and temporary damage to natural capital.
• Limitations of the materiality assessment
• The ratings indicate potential, not actual dependencies and impacts. These ratings should only serve to inform initial screening, which should be followed by spatially explicit and
• company-specific assessments before any final decisions are made.
• This is a generic global assessment. It must be recognised that many dependencies and impact drivers are very location specific. Any decisions taken based on these materiality ratings should first be validated using site-specific information.

In all instances ratings were assigned based on the best available information from scientific and grey literature (as compiled in the ENCORE dependencies and impacts databases). However, some links may be missing due to lack of sufficient robust literature. Users are encouraged to complement the information presented here with more refined and industry-specific knowledge.

The ratings consider present-day technologies and industry norms, and do not account for potential future developments by industries to reduce dependencies and impacts. However, this does not mean that a company necessarily has a Very High dependency or impact materiality, as it could have robust measures in place to avoid/reduce/mitigate actual dependencies and impacts. The inverse also applies. Ratings were assigned independent of other production processes. As such they do not compare the materiality of one dependency or impact for one production process against the materiality of the same dependency or impact for another production process.