Severity — Severity of impacts in ESRS double materiality
Magnitude of the adverse impact assessed by scale, scope and irremediable character of the harm. Codified in ESRS 1 §45 and EFRAG IG 1 as the central dimension of impact materiality.
Context
Severity is the canonical ESRS 1 §45 concept that assesses the magnitude of an adverse impact on people or the environment. It is built from three dimensions: scale (severity of the harm), scope (extent of the impact) and irremediable character (reversibility of the harm).
Regulatory origin
Codified in ESRS 1 §45 (Delegated Regulation (EU) 2023/2772) plus AR 10 with operational criteria. EFRAG IG 1 Materiality Assessment develops its practical application to the double materiality analysis.
«The materiality assessment of a negative impact is based on the severity of the impact, while the materiality assessment of a positive impact is based on its scale and scope.»
View verbatim quote in English
“The materiality assessment of a negative impact is informed by the due diligence process; the severity of an actual negative impact is determined by the scale, scope and irremediable character of the impact”
The three dimensions of severity
Severity of the harm. How grave is the impact on the affected person or ecosystem? (e.g. minor injury vs death, local vs systemic pollution).
Extent of the impact. How many people or how much territory is affected? (e.g. 10 workers vs 10,000 · 1 hectare vs 1,000).
Reversibility. Can the harm be reversed or is the effect permanent? (e.g. reversible monetary compensation vs irreversible death).
Severity vs likelihood
| Dimension | Question | When it prevails |
|---|---|---|
| Severity | How grave if it occurs? | In human rights, severity prevails over likelihood (ESRS 1 §45 in fine). |
| Likelihood | How likely is it to occur? | In contributory environmental impacts, likelihood is weighed alongside severity. |
Timeline
UN Guiding Principles
The UN codifies severity as a central criterion of human rights due diligence.
OECD due diligence guidance
The textile-footwear sectoral guidance integrates severity with scale, scope and irremediable character.
ESRS codification
Delegated Regulation (EU) 2023/2772 codifies severity in ESRS 1 §45 + AR 10.
Applied case
A textile brand assesses the severity of the impacts identified in its IRO-1 analysis. It applies the three canonical dimensions with documented criteria to each candidate impact.
Scale: gravest (deprivation of liberty). Scope: ~100,000 workers affected according to UN OHCHR. Irremediable character: high (permanent psychological trauma). Severity: maximum · severity prevails over likelihood in human rights · material even though the sourcing is indirect.
Scale: medium (slow accumulation · ecotoxicological effects). Scope: global. Irremediable character: high (non-biodegradable microfibres). Severity: high · material for environmental reporting (ESRS E2 Pollution).
Scale: medium (accumulated fatigue · accident risk). Scope: ~340 workers across 3 plants. Irremediable character: medium (reversible with shift changes). Severity: medium-high · material for social reporting (ESRS S2 Workers in the value chain).
Common mistakes
Severity is not calculated with the three factors in AND nor with an average: any one of them on its own can make it material.
ESRS 1 AR 11 in faithful paraphrase: any of the three characteristics (scale, scope and irremediable character) can make a negative impact severe. EFRAG IG 1 ¶118 reaffirms it. Applying AND logic (requiring all three factors to be grave simultaneously) or averaging them in a matrix invalidates the assessment: companies with isolated but highly irremediable impacts (e.g. child labour, one-off toxic spills) may underestimate severity if they apply AND or an average.
In potential human rights impacts, severity prevails over likelihood — even if the estimated likelihood is low.
ESRS 1 ¶45 in fine + AR 11 in faithful paraphrase: in the case of a potential negative impact on human rights, the severity of the impact takes precedence over its likelihood. EFRAG IG 1 ¶120 reinforces it. This rule is hierarchical and unique — for potential human rights impacts, high severity makes the impact material even if the estimated likelihood is low. Applying standard severity×likelihood matrices without recognising this human rights exception leads to under-reporting material impacts on workers in cultivation or processing chains.
Severity does not apply only to negative impacts: for positive impacts it is measured by scale and scope (ESRS 1 ¶46).
ESRS 1 ¶46 in faithful paraphrase: for positive impacts, materiality is based on (a) the scale and scope of the impact for actual impacts; and (b) the scale, scope and likelihood of the impact for potential impacts. The irremediable character factor does NOT apply to positive impacts — positive impacts can only become larger or smaller, not irremediable. Reporting only negative impacts by severity and omitting positive ones (where they exist) breaches the symmetry of the ESRS framework.
Severity is not the same as likelihood — they are two distinct factors in the materiality of potential impacts.
ESRS 1 ¶45 in faithful paraphrase: for potential negative impacts, materiality is based on the severity and likelihood of the impact. Severity and likelihood are two independent dimensions that are multiplied or combined to assess the materiality of potential impacts (not actual ones — actual impacts are measured by severity only). EFRAG IG 1 ¶122 in faithful paraphrase: in terms of likelihood, the likelihood of a potential negative impact refers to the probability that the impact will occur. The likelihood of an impact may be measured or determined qualitatively or quantitatively depending on the available information. Confusing severity and likelihood leads to poorly constructed matrices.
Severity is a lingua franca between the UN Guiding Principles, OECD, GRI and ESRS — it is not an invention of the European framework.
ESRS 1 ¶45 declares it, in faithful paraphrase: the materiality assessment of a negative impact is informed by the due diligence process defined in the international instruments of the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. UN Guiding Principle 14 and its commentary, as well as the OECD Due Diligence Guidance for Responsible Business Conduct, contain the same three factors (scale, scope and irremediable character) — the novelty of ESRS is the formalisation in a binding European framework, not the technical concept. Companies with due diligence already implemented under the UN Guiding Principles or OECD can reuse criteria and thresholds with minimal adjustments.
Frequently asked questions
What is severity in ESRS?
Canonical concept ESRS 1 §3.4 + EFRAG IG 1: the severity of an adverse impact on people or the environment is assessed through 3 dimensions: (i) scale (severity of the harm), (ii) scope (extent of the impact · how many people or areas affected), (iii) irremediable character (reversibility of the harm).
How is severity assessed in double materiality?
Severity x likelihood = impact materiality score. The company documents the assessment process in IRO-1: definition of thresholds (high/medium/low) for each dimension, sources of evidence, stakeholders consulted. Severity is assessed for both actual and potential impacts.
What is the difference between severity and likelihood?
In accordance with ESRS 1 §3.4 + EFRAG IG 1 Materiality Assessment: severity is the magnitude of the harm IF the impact occurs (scale + scope + reversibility as the three canonical dimensions). Likelihood is the probability that the impact will occur. Both combine in impact materiality: a high-severity but low-likelihood impact may be material; a medium-severity but high-likelihood impact may also be — the combined matrix determines the threshold.
What happens if a company underestimates severity?
Underestimating severity is a CSRD compliance risk: the resulting materiality matrix may be invalid (it does not reflect actual impacts) and the sustainability statement does not comply with ESRS 1 §3. The external auditor + affected stakeholders (NGOs, trade unions) can challenge the matrix, triggering a restatement of the report and potential penalties.
Fuentes oficiales
- European Commission · Delegated Regulation (EU) 2023/2772 · Annex I31 jul 2023Delegated act in force
- European Financial Reporting Advisory Groupmayo 2024Non-binding technical guidance
- United Nations · OHCHR2011International framework
- OECD2018International guidance
