- Introduction
- Common architecture across the three assessments
- Where the requirements diverge
- Illustrative Example: Integrated Assessment Output (Agriculture/Food Sector)
Introduction
Three sub-requirements in the B Lab Standards explicitly converge on the same foundational activity: assessing impacts across a company's operations and value chain to determine the company’s most material impacts that should be addressed as a priority. While PSG2.3 (materiality assessment), HR2.1 (salient human rights issues), and ESC1.7 (nature and animal welfare impact assessment) are distinct requirements, companies may conduct one integrated assessment that satisfies all three – provided the assessment meets each sub-requirement's specific compliance criteria. In fact, if the company carries out separate assessments, the material topics it identified under PSG2.3 must cover those identified under ESC1.7 and HR2.1 (even if at a high level). This article explains how to conduct an integrated materiality assessment, what the common architecture looks like, and where the requirements diverge.
Common architecture across the three assessments
The following elements are shared across PSG2.3, HR2.1, and ESC1.7:
Scope: Operations and value chain
Prioritisation method: Severity and likelihood scoring; severity should outweigh likelihood so that high-severity/low-probability impacts are not systematically excluded
Recency: Assessment carried out within the last 36 months (with interim reviews for PSG2.3)
Where the requirements diverge
If the three assessments are conducted jointly, supplementary materials may be required as evidence. For instance, performance data, impact metrics and tools used to identify the company's interface with nature to support ESC1.7.
Illustrative Example: Integrated Assessment Output (Agriculture/Food Sector)
The following illustrates how a company might document its integrated assessment. Severity is scored 1–5 (5 = most severe); likelihood 1–5 (5 = most likely). Materiality threshold: An issue is considered material if the severity score is 4 or higher (regardless of likelihood), or if the combined score of severity and likelihood is 6 or higher and severity is at least 3.
Threshold methodology note: Severity is scored using the UNGP/GRI 3 framework: scale (how grave), scope (how many affected), remediability (how reversible). Likelihood combines probability of occurrence and frequency. Topics falling below the threshold are documented and monitored; any topic in the non-material category for ESC1.7 (specifically water, biodiversity, waste) requires a written explanation supported by scientific evidence.
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