MET. ESG accounting method management

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Topic

The Governance Admin will maintain a taxonomy of ESG topics. Informally, a taxonomy is a tree of categories; think of a folder structure.

An ESG Topic is a category that helps group indicators that relate to the same phenomenon. For instance, a topic named "Environmental impact" could groups indicators concerning annual CO2 emissions, annual electricity consumption, and annual waste produced by the organisation.

The tool will have a single, universal taxonomy of ESG topics, that is not dependent on the network.

Fields

• Id: text :key: . It is an identifier of the topic, just to later use it for reference and links within the database. The user is not meant to edit this id.
• Name: text. The name of the topic. E.g. “Environmental impact”. The Name should be translatable to all languages in the tool.
• Description: text. Brief explanation of the topic. The Description should be translatable to all languages in the tool.
• (parent_topic): Topic :arrow_upper_right: . It is an identifier of the parent topic. It is a reflective relationship that allows creating a taxonomy. As an initial policy, we recommend using at most two levels in the taxonomy of topics (i.e. topics and subtopics). Later, if needed, the Governance admin can create more levels. However, the tool should not prevent this; it is rather a recommendation.

Comments

• Ideally, we will be able to define a taxonomy before the migration of the Show your Heart database from V1 to V2.
• However, in order to make the migration easier, we could migrate the current Blocks from V1 to Topics in V2.

Indicator

An indicator is the definition of a measure that a method requests an organisation to assess and report on during the ESG accounting. For instance, an indicator for the topic "Diversity, equity and inclusion" could be the "Gender pay gap". Indicators are composed of direct and indirect indicators. For instance, "Gender pay gap" is an indirect indicator, while the "Average salary for men" and "Average salary for women" are direct indicators.

Fields

• Id: text :key:. It is an identifier of the indicator. E.g. "number_member_workers". Until now, REAS has used non-mnemonic identifiers for direct indicators (a.k.a. questions; e.g. "q0105") and indirect indicators (a.k.a. indicators; e.g. "ind1"). We now propose to use mnemonic indicators that help the user quickly recall or understand what indicator the identifier refers to (e.g. "q0105" --> "number_member_workers", and "ind1" --> "total_people_by_gender"). Id and Version are a compound identifier of Indicator.
• Version: text :key:. The version of the indicator. Typically it will be a year, so a number could suffice, but this is open to discussion so perhaps we need a text string. Id and Version are a compound identifier of Indicator.
• Name: text. Name of the indicator. E.g. “Average salary for men”. The Name should be translatable to all languages in the tool.
• (Description): text. A short description of the indicator. The Description should be translatable to all languages in the tool.
• :arrow_upper_right: primarytopic: Topic. This shows which topic the indicator is related to most strongly. It is the category under which this indicator is grouped. When downloading results of an ESG account or a campaign, from one organisation or many, related to one method or several, the tool will offer the option of structuring the indicators according to their primary topic. This relationship is mandatory.
• (secondarytopics): Topic :arrow_upper_right:. This points to other topics the indicator is also considered related to. This helps when searching for indicators that are related to a category. This relationship is optional.
• Type: enumerated. Whether the indicator is direct or indirect. In V1, the the terminology is "Question" and "Indicator". But in the new version V2, we refer to them as "Direct indicator" and "Indirect indicator"
  • direct: An indicator whose value can be directly extracted from a source; e.g. that can be asked to a stakeholder through a survey question. In V1, _Direct indicator_s are referred to as _Question_s.
  • indirect: An indicator whose value needs to be calculated based on the values of other indicators; i.e. they have a formula that refers to other direct or indirect indicators. In V1, _Indirect indicator_s are referred to as _Indicator_s.
• Category: enumerated. Only for Indirect indicator, or for both (but then direct indicators can only be of category performance). It defines what the indicator is used for. In version V1 only performance indicators are supported but several regional networks implement the other two categories in spreadsheets to evaluate organisations (e.g. XES). We enumerate the options below; for each category, we also give an example of a possible formula associated to the indicator.
  • performance: it assesses how well an organisation performs on a given topic, in terms that are meaningful to the stakeholders (e.g. “gender_ratio”)
    • Example: gender_ratio: formula = women_staff / (total_staff)
  • scoring: it calculates a score based on the values of performance indicators or other scoring indicators, probably with the intention to later check whether the organisation achieves a certification level (e.g. “gender_ratio_score”).
    • Example: gender_ratio_score: formula = IF gender_ratio < 0.15 THEN gender_ratio_score = 0 ELSE IF gender_ratio < 0.85 THEN gender_ratio_score = 10 * (gender_ratio - 0.15 ) / (0.85 - 0.15) ELSE gender_ratio_score = 10
  • certification: it is meant to determine whether the organisation has achieved a certification or label (e.g. "xes_social_balance_label").
    • Example: xes_social_balance_label: IF total_score > 4 THEN xes_social_balance_label = True ELSE xes_social_balance_label = False
• Datatype: enumerated. The data type of the values expected for this indicator. See the table below. Note that, when the data type is List multiple choice, List radiobutton or List dropdown, then the user Governance admin needs to indicate what list contains the answer options (see list in the subsection Relationships, below).

Data type (EN)	Data type (ES)	Explanation
Text short	Texto corto	A short string up to ??? characters
Text long	Texto largo	A long string up to ??? characters
Natural number	NA in V1	A positive whole number, including zero (e.g. 0, 1, 2, 3)
Integer number	Entero	A positive or negative number with no decimal, including zero (e.g. 0, 1, -1, 2, -2)
Integer gendered number	Género entero	An integer number that is asked for each gender: men, women, non-binary. The indicator is seen by the user-entity as a question with a three-box blank for entering the numbers.
Real number	Decimal	A positive or negative number that can include decimals, including zero (e.g. 0, -2.54, 1000.33)
Real gendered number	Género decimal	A real number that is asked for each gender: men, women, non-binary
Yes No	Sí/No	An enumerated list that consists of the values Yes or No; it can be rendered in the interface of the surveys as a radio button or a dropdown field. The options should be translatable to all languages in the tool
Range	Rango	A range list between a minimal number value and a maximal number value. Clicking this option showcases the minimal and maximal field (entering a integer number in each case).
Weight	Peso	A positive number that is asked with no decimal.
Date	Fecha	A date dd/mm/yyyy; it can be rendered in the interface of the surveys as a calendar component
Document	Documento	A file that can be uploaded to the tool from the computer of the user
List multiple choice	Lista (selección múltiple)	A user-defined enumerated list that is rendered in the interface of the surveys as a list of checkboxes. The options should be translatable to all languages in the tool.
List radiobutton	Lista (radio)	A user-defined enumerated list that is rendered in the interfce of the surveys as a list of radiobuttons. The options should be translatable to all languages in the tool.
List dropdown	Lista (desplegable)	A user-defined enumerated list that is rendered in the interfce of the surveys as a dropdown list. The options should be translatable to all languages in the tool.
Literal	Literal	A question with no answer for the end-user. It showcases only the question (it's used as an explanation of some sort for the organization of the method).
Sector	Sector	A user-defined enumerated list that is rendered in the interface of the surveys as a list of checkboxes (we need to talk with the User-group if we want to keep this feature).
Group of percentages	Grupo de porcentajes	A user-defined enumerated list that is rendered in the interface of the surveys as a list of checkboxes (we need to talk with the User-group if we want to keep this feature).

• (PreUnit): Unit :arrow_upper_right:. A unit that is placed as a prefix when displaying the value of this indicator. E.g. “C” as in a value of “12.50” meant to be displayed as “C 12.50.” Another example is “$”. PreUnits and PostUnits can be defined by the Governance admin; while we could have a separate screen to manage the units, perhaps a better option is using a an editable dropdown list (it offers available options while leting the user create a new option).
• (PostUnit): Unit :arrow_upper_right:. A unit that is placed as a suffix when displaying the value of this indicator. E.g. “Tons of CO2 equivalents” as in a value of “600” meant to be displayed as “600 Tons of CO2 equivalents”. Other examples are “kg”, “m2”, “°C”, “days”, “MMBtu”, “points”, “KWh”
• :arrow_upper_right: list. This indicates the list of options that are available as values for this indicator. This is only applicable when the indicator datatype is List multiple choice, List radiobutton or List dropdown.
• (Condition): text. Only for Direct indicator. A logical formula (i.e. calculating a Boolean value) that determines whether the direct indicator is applicable to a given organisation. The formula can use references to other indicators (either direct or indirect) and to the fields requested during registration (e.g. Primary legal entity type). The expressiveness of conditions is equivalent to the expressiveness of indirect indicator formulas (e.g. arithmetic operations, if-then-elses).
• Formula: text. Only for Indirect indicator. The formula shows how an indirect indicator is calculated.
• (validations): Validation :arrow_upper_right:. A derived and redundant relationship to link all the validations that refer to this indicator. The indicator _Id_s are referred in the logical formula of the validation, but this relationship keeps an explicit link so they are easier to find. In the Figma prototype several fields of the validations are embedded in the screen that presents and allows editing indicators; but indicators and validations are actually separate concept (tables). Relationships for either direct or indirect indicators
• (used_in_immediate): Indicator :arrow_upper_right:. This derived and redundant relationship points to the set of indirect indicators that refer to this indicator in their formulas. In other words, it points to the set of indirect indicators that use this indicator to calculate their value. In the Figma prototype, this is referred to as "Related indicators" and they appear in green bubbles.
• (used_in_distant): Indicator :arrow_upper_right:. This derived and redundant relationship points to the set of indirect indicators that do not refer to this indicator in their formulas, but still use the value because, in the chain of indirect indicators that rely on other indicators, we eventually arrive at this indicator. In the Figma prototype, this is referred to as "Related indicators" and they appear in blue bubbles.
• needs_immediate: Indicator :arrow_upper_right:. Only for Indirect indicator. It is the opposite direction to used_in_immediate. This derived and redundant relationship points to the set of indicators that this indirect indicator refers to in its formula. It is redundant because the formula already defines which other indicators are used to calculate the value of the indirect indicator (we refer to such indicators as operand indicators because they are used in mathematical operations to calculate the indirect indicator). However, the formula is a text string, so this relationship makes the links to the operand indicators explicit in the database.
• needs_distant: Indicator :arrow_upper_right:. Only for Indirect indicator. This derived and redundant relationship is similar to needs_immediate but now it points to the set of indicators in the chain that this indirect indicator eventually needs, despite not referring to them in the formula.
• related_methods: ESG method :arrow_upper_right:. It points to the set of methods that use this indicator.

Example to clarify the used_in and needed relationships

For each indicator, we just show the new mnemonic identifier Id, the old identifier between parentheses, the Type (direct or indirect), the Formula in case of indirect indicators (first using mnemonic identifiers, and then using the old indicators among parentheses), the list used_in, and the list needed.

• Id: number_member_workers ${{\color{Grey}{(earlier\ q0105)}}}$  
  • Type: direct
  • used_in_immediate: total_workers, total_workers_by_gender ${{\color{Grey}{(earlier\ ind118,\ ind169)}}}$
  • used_in_distant: percentage_workers_by_gender, electricity_per_worker ${{\color{Grey}{(earlier\ ind495,\ ind4203)}}}$
• Id: number_non_member_workers ${{\color{Grey}{(earlier\ q0106)}}}$
  • Type: direct
  • used_in_immediate: total_workers, total_workers_by_gender ${{\color{Grey}{(earlier\ ind118,\ ind169)}}}$
  • used_in_distant: percentage_workers_by_gender, electricity_per_worker ${{\color{Grey}{(earlier\ ind495,\ ind4203)}}}$
• Id: total_workers ${{\color{Grey}{(earlier\ ind118)}}}$
  • Type: indirect
  • Formula: number_member_workers.all + number_non_member_workers.all ${{\color{Grey}{(earlier\ total\_q0105\ +\ total\_q0106)}}}$
  • needs_immediate: number_member_workers, number_non_member_workers ${{\color{Grey}{(earlier\ q0105,\ q0106)}}}$
  • used_in_immediate: percentage_workers_by_gender, electricity_per_worker ${{\color{Grey}{(earlier\ ind495,\ ind4203)}}}$
• Id: total_workers_by_gender ${{\color{Grey}{(earlier\ ind169)}}}$
  • Type: indirect
  • Formula: number_member_workers + number_non_member_workers ${{\color{Grey}{(earlier\ q0105\ +\ q0106)}}}$
  • needs_immediate: number_member_workers, number_non_member_workers ${{\color{Grey}{(earlier\ q0105,\ q0106)}}}$
  • used_in_immediate: percentage_workers_by_gender ${{\color{Grey}{(earlier\ ind495)}}}$
• Id: percentage_workers_by_gender ${{\color{Grey}{(earlier\ ind495)}}}$
  • Type: indirect
  • Formula: total_workers_by_gender / total_workers ${{\color{Grey}{(earlier\ ind169/ind118)}}}$
  • needs_immediate: total_workers_by_gender, total_workers ${{\color{Grey}{(earlier\ ind169,\ ind118)}}}$
  • needs_distant: number_member_workers, number_non_member_workers ${{\color{Grey}{(earlier\ q0105,\ q0106)}}}$
• Id: total_electricity_consumed_KWh ${{\color{Grey}{(earlier\ q4202)}}}$
  • Type: direct
• Id: electricity_per_worker ${{\color{Grey}{(earlier\ ind4203)}}}$
  • Type: indirect
  • Formula: total_electricity_consumed_KWh / total_workers
  • needs_immediate: total_electricity_consumed_KWh, total_workers ${{\color{Grey}{(earlier\ q4202,\ ind118)}}}$
  • needs_distant: number_member_workers, number_non_member_workers ${{\color{Grey}{(earlier\ q0105,\ q0106)}}}$

Constraints

• With regard to conditions, circular references should be avoided. E.g. the condition should not refer to the same direct indicator where the condition is being defined. Similarly, the conditions of two different direct indicators should not refer to each other.
• It is only possible to create links of the type items when the indicator Datatype is sis List multiple choice, List radiobutton or List dropdown.
• With regard to formulas, circular references should be avoided. E.g. the formula should not refer to the same indirect indicator where the formula is being defined. Similarly, the formulas of two different indirect indicators should not refer to each other.

ESG accounting method

A specification of how ESG accounting should be performed, according to the _Network admin_s who created the method. This includes the specifications of indicators, stakeholder groups, surveys, validation rules, certification levels, etc. But a method might also include guidelines on, for example, the reporting format or on whether the results of an accounting have to be published.

Examples of ESG accounting methods used within REAS are the Social Audit of REAS Euskadi, the Social Audit of REAS Navarra, and the Social Balance of XES. Examples of ESG accounting methods outside REAS are the B Impact Assessment by B Labs, the Common Good Balance Sheet by Economy for the Common Good, the GRI Standards by the Global Reporting Initiative, UN Global Compact by the United Nations, etc.

Equivalent terms: non-financial reporting, integrated reporting, CSR reporting, sustainability reporting.

Add/Edit method Field

• Id: text :key:. It is an identifier of the method. E.g. "XES_social_balance".
• Name: text. The name of the method. E.g. "XES Social Balance" and "Balance Social de la XES". It should be translatable to all languages of the tool.
• Description: text. A short description of the method. E.g. "Complete Social Balance. In addition to the basic questions, it includes qualitative questions to delve deeper into certain aspects and job-related questionnaires that should be sent to employees at each organization." It should be translatable to all languages of the tool.
• network_owner: Network :arrow_upper_right:. The network that is responsible for the creation and maintenance of this method.
• network_users: Network :arrow_upper_right:. The networks that is offer this method to their members.
• surveys: Survey:arrow_upper_right:. The set of surveys the method defines to collect the values of direct indicators from stakeholder groups. It includes both single-stakeholder and multiple-stakeholder surveys. When listing the surveys of a method in the user interface, it would be nice to show the name of the survey and the number of questions (direct indicators) it contains.
• UnitOfAnalysis: enumerated. It indicated whether the method is intended to measure the impact of organisations or projects. So, possible values are:
  • organisation: When the method assesses the impact of organisations. E.g. this is the case of the Social Balance of XES or the Social Audit of REAS Euskadi.
  • project: When the method assesses the impact of projects. E.g. this is the case of the Communitary Balance of XES.
  • external survey: When the method assesses an external valuation of the entity, typically by members of the said entity (workers, volunteers, partners etc.). E.g. this is the case of the Workplace survey of the XES Balance.
• Indicators list: A list of all existing _indicators _(direct and indirect) to add to the list of the indicators that will be used on the method.
• Which entities does it apply to: A condition field to choose the legal form that applies the method. E.g:_ Primary legal entity type._, Secondary legal entity type. For instance: this method will only be seen by cooperative entities.
• Geographical area: A condition field to choose the geographical scope of the method.
• Sectors: A condition field to choose the _Sector _scope of the method. E.g: Primary sector type, Secondary sector type.
• MethodDocumentation: File. A PDF document describing how to apply the method. For the moment, we can do fine with a single document in a single language. In the future, it should be possible to have more than one file, each in a different language.
• Active: Boolean. It indicates whether the method is in use and thus should be available to _Visitor_s and _ESG accountant_s so they can request networks to support them in applying it.
• External surveys: An list of all of the External survey created that can be added to the method. For instance, add the "Workers survey" to the Social Balance of XES.

General Survey Field

• Add section: text. When added asks for the name of the section with the translation in the available languages. The sections can be edited and moved up or down.
• Add subsection: text. When added asks for the name of the subsection with the translation in the available languages. The subsections can be edited and moved up or down.
• Add indicator: Indicator ID and Indicator text, chosen by a list that shows from the Indicators list previously added. When an indicator is used, it is not shown available after. For indirect indicators, there is the option to hide the indicator from the method seen by the entity user.

Documentation Field

• Add new: Document. Adds an optional document generation by the network admin of the method for each Status of the method. E.g: a Results csv document when the Technical data is validated; a Label when the Criteria data is validated.

Constraints

• The network linked by network_owner is included in the set of network_users.

List (incomplete)

If the datatype of a direct indicator is List multiple choice, List radiobutton or List dropdown, then this concept defines the list and its answer options.

Attributes when Add new list:

• Title: Text. ID identificator of the new list. This _Title _will be used when searching for a list when datatype of an _indicator _is List multiple choice, List radiobutton or List dropdown.
• Enable "Others" response: Boolean. It indicates whether the list has an "Other" answer enabled. If enabled, this question will have automatically an extra text field for "Others" answer.
• Formula: text. The formula shows how a possible conditional of the answer is calculated. For example: only show the answer option if q1101 < 1 (meaning: number of workers < 1).
• Value: Integer number. Used for the formulas of indirect indicators. Each answer can have a value, and "Others" value is always 0.
• Text: Boolean. It indicates whether the option list is active or not (it is used to not use an answer already created without deleting it).

Pending: relationships.

Improvement: conditions in answer options, to avoid having to duplicate indicators (e.g. for small companies).

Section (incomplete)

Survey sections can be related to a topic, but it is not mandatory.

A section related to a topic can contain questions related or unrelated to that topic. In case the question is not related to the topic, we can show a small warning, but it is just merely informative.