IRO; Impact, Risk, and Opportunity management its part of the EU’s CRSD reporting framework and is a key concept for the double materiality assessment, requiring companies to evaluate and report not only on how sustainability issues affect their financial performance (risks and opportunities), but also on their impact on the environment and society.

Impacts refers to the positive and negative effects a company has on the environment and society. Companies need to report on how their operations impact critical sustainability areas like climate, biodiversity, human rights, and labour practices.

Risks focuses on the potential negative consequences to the company itself due to sustainability issues. It includes financial risks stemming from climate change, resource scarcity, changing regulations, and societal shifts towards sustainability, which could affect the company’s profitability and sustainability in the long term.
Opportunities

This involves identifying and acting on chances to benefit from sustainability, such as developing new green products, entering sustainable markets, or improving efficiency and reducing costs through sustainable practices. Opportunities represent ways for a company to enhance its competitive advantage, innovation, and growth by aligning with sustainable development goals.