What factor determines the significance of an actual negative impact?

The significance of an actual negative impact is primarily determined by the severity of the impact. Severity refers to the extent of the harm or adverse effects that result from an issue. Understanding the severity helps organizations prioritize their responses and allocate resources effectively to address the most critical challenges first.

For instance, an impact that causes profound damage to the environment or severe harm to human health is deemed significant due to its potential for lasting and widespread consequences. In the context of sustainability reporting, having a clear understanding of severity allows organizations to assess which impacts warrant more immediate attention or corrective action and to communicate these impacts transparently to stakeholders.

In contrast, while likelihood of occurrence, cost of mitigation, and duration of impact may play important roles in the overall analysis of an issue, they do not directly define the significance of the impact itself. They contribute to a broader assessment but do not encapsulate how severe the impact is, which is the central factor in determining significance.