Step 4: Consider the Golden Rules when Rating

The Impaakt Team

11 min Read Time | November 25th 2022

Key Takeaways


Only rate the impact discussed in the analysis without taking into consideration other impacts the company may have, remaining unbiased.


Regardless of whether companies mitigate their negative impact, or the opposite, consider the absolute value of the impact, whether it is positive or negative.


You can gauge the severity of the impact by considering the absolute numbers. You can consider the comparisons to its peer-group, whilst taking into account the difference in absolute impact to companies in different industries.


We have identified a lack of perspective readers may have. It is paramount to contextualise the impact in the analysis you are rating, especially when it comes to comparing and benchmarking between:

  • The company with its topic versus its peer-group/industry

  • The absolute impact of one company versus any other in the Impaakt universe

  • The company with its topic versus other topics (GHG emissions versus water, waste, etc.).

To avoid skewing scores due to this myopic view, there are three golden rules to follow when rating.

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Golden Rule 1: Do Not Rate Individually

We have identified the most significant social and environmental impacts for each industry, which we call ‘Topics’.

An impact assessment is then conducted for a specific company on a specific topic, ultimately published on the platform.

All industries have a Core Business Impact analysis about their core products & services, as well as 5 positive or negative externalities:

  • Taxes,

  • Job Creation,

  • GHG Emissions,

  • Employee Inclusion, and

  • Employee Gender Diversity.

Then, there are industry-specific positive and negative ‘externalities’, i.e., additional topics offered and written on, such as Water Pollution, Environmental Impacts from Material Sourcing, and Supply Chain Empowerment.

To learn more about topics and other frameworks we have implemented, click here: /knowledge-centre/our-frameworks.

(warning emoji) It is essential to rate the value and the severity of the specific analysis you are reading only, without considering other topics for the company.

You must avoid taking into consideration other impacts the company has when rating the analysis. It is important to remain neutral and unbiased without taking into account any personal experience with the company, scandals you may have heard about, or other analyses you read on the platform.

For example, you should not consider the issues surrounding Nestlé's privatization of water when rating the assessment of the company's contribution to feeding the world.

When you do the ratings for one analysis, it should be on that specific analysis/impact only. But, to conduct a proper benchmarking, it is important to consider the absolute impacts from other companies on the same topic.

A tool that may help you with this general overview is the bubble graph. Using it you can have an overall idea of the topics covered for a company as well as how the industry is performing.

Below you will find an image of Nestlé’s bubble graph. This is the distribution of the ratings made on each analysis published pertaining to a topic.

The bubble graph below can help you visualise all of the impacts the company is having on the environment and society, helping you locate the impact of the note you are rating in the best position. Is the company's impact on gender inclusion greater in severity than its impact on job creation? Ask yourself these sorts of questions to find the perfect location for the impact rated.

Don't hesitate to voice your opinion of the company by ratings its various environmental and social impacts.

The topics belong to wider themes, which can then be compared to the company’s peer group. Other bases for comparison are the:

  • UN’s Sustainable Development Goals

  • ILG

  • Products vs. Processes

Golden Rule 2: Put Remediation Efforts Into Context

Remediation are steps taken by a company to mitigate its impact. 

For instance, a car company producing a high amount of product end-of-life waste through its vehicles having a take-back initiative that is lower in volume is considered remediation. Another example is job creation, where companies create employment but offer indecent working conditions. 

Simply put, if an analysis mentions remediation efforts, it renders the impact ‘less negative’, but it still remains negative. It is the same for the flip side; the impact can sometimes be ‘less positive’, but it is still positive.

Example: Taxes


Regardless of the amount paid, the analysis will remain positive. If the company was exempt from paying taxes, then the impact can be neutral. 

Depending on the net taxes paid, whether it was in full or not, will be expressed through the severity. Therefore, the severity of the rating can reflect the scale, scope, and irremediability of the company’s social impact through its contributions.

  • If the company evaded taxes, which is a different topic in itself, this means that they are illegally not paying taxes as they should. Tax evasion is different from avoidance, where the latter is about companies paying fewer taxes than they should through legal means.


The severity should capture how much taxes were paid:

  • Breadth: consider the absolute amount of taxes paid

  • Depth: in your opinion, how important is it to pay taxes? Does it deeply or superficially impact society?

  • Persistence: has the company consistently paid the taxes it must pay? Has it consistently benefited from discounts? For instance, if a company has not paid taxes or paid fewer taxes in a year, this would be reflected in a lower effective tax rate. 
    • If in full - the severity is on the higher end,

    • If partially paid - the severity is on the lower end, but the impact remains positive

Whilst considering the ultimate value of the impact, remediation efforts should be taken into consideration when rating the persistence.

The depth is completely subjective and up to the reader to decide how superficial or deep the impact is. When rating the persistence, a key aspect to consider is when a company is making significant mitigation efforts, such as reducing its GHG emissions and consumption of renewable energy. This shows that the impact is not permanent, but somewhere between the latter and transitory.

Golden Rule 3: Putting the Impact into Perspective

We compare absolute impacts, regardless of the industry the company belongs to.

For instance, Company A in the Oil & Gas industry emitting 1 million tonnes of CO2e should get a lower breadth rating than Company B in the Real Estate Services company emitting 500 million tonnes of CO2e.

Example: GHG Emissions


Regardless of the volume of emissions released, the analysis will remain negative. The severity of the rating can reflect the depth, breadth, and persistence of the company’s environmental impact.

There are some exceptions to this rule:

  • If a company mitigated its impact through carbon sequestration and other techniques to the point where it zeroed out its emissions, the value would be neutral.

  • If a company took it a step further, and sequestered more than it emitted, the value would be positive.


The severity should capture the tonnes of greenhouse gases released, although this can be applied to all topics considering different units and metrics:

  • Scale: Do you believe that companies emitting GHG emissions, regardless of the amount or industry they are in, have a profound impact on the environment?
  • Scope: Only consider absolute metrics. The severity given here should be completely irrespective of the industry the company belongs to. How many tonnes of GHGs did the company emit?

  • Irremediability: Consider the progress the company has made and it if has shown it has changed its ways. A time frame evaluation can help you by asking yourself what the trend of the impact is over time.
    • For instance, if a company has been consistently shifting to renewable energy and this has consistently reduced its emissions, the rating on persistence will be lower as it would not persistently emit all it is emitting in the present.

    • Remediation efforts can also be taken into consideration here, such as carbon capture and sequestration.


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