Methodology

How We Grade

Every ESGNexus disclosure grade is produced by a published, equal-weighted, page-referenced checklist. This page is that checklist. Nothing about our assessment process is held back for enquiries.

We grade disclosure, not performance.

We assess whether a company’s public reporting discloses what a mandatory standard requires — a checkable fact about a public document. We do not assess whether a company is sustainable, well managed, or responsible. A high grade means the reporting is complete and transparent. A low grade records omissions in a document; it is not a judgement of the business.

The distinction is the foundation of everything below. We will assert that “the FY2025/26 report does not disclose Scope 3 emissions, which SLFRS S2 requires” — a fact about a page, which any reader can verify. We will never assert that “the company’s climate strategy is weak” — an opinion, which a critic can attack and which we have no standing to make.

What we assess — and what we do not

Assessed	Not assessed
Public filings for the relevant reporting period	Actual environmental or social outcomes
Against the disclosure requirements of SLFRS S1 and S2	Strategy quality or management competence
Plus any further framework the company itself claims to apply (GRI, Integrated Reporting)	Any judgement of the company as an entity
Using a fixed, published, page-referenced checklist	Anything not visible in a public document

Which reports are graded

A report is graded as a mandatory SLFRS assessment only if it covers a first mandatory reporting period. For the top-100 cohort, that is the first annual period beginning on or after 1 January 2025 — so a December year-end company’s first mandatory report is CY2025, and a March year-end company’s is FY2025/26.

Voluntary-era reports may still be profiled, but they are labelled “voluntary disclosure (pre-mandatory)” and are never counted in a mandatory-cohort ranking. Comparing a voluntary report against mandatory filings would be the single most attackable error we could make, so we do not make it.

The seven criteria

Every profile is scored against these seven criteria, worded identically every time. Identical wording is what makes profiles comparable to one another.

#	Criterion	Standard	What it tests
1	Materiality assessment disclosed, with method shown	SLFRS S1	Is a materiality process actually described, or merely asserted?
2	Scope 1 and Scope 2 GHG emissions quantified, with methodology	SLFRS S2	Are figures given and is the calculation basis stated?
3	Scope 3 / financed emissions disclosed or explicitly deferred	SLFRS S2	See the transitional reliefs rule below. Financed emissions is the material Scope 3 category for financial firms
4	Climate scenario analysis actually performed	SLFRS S2	Performed, with stated scenarios — not merely described as intended
5	Board-level climate governance described concretely	SLFRS S1 & S2	A specific oversight structure, named — not boilerplate
6	Quantified targets with baseline year and target date	SLFRS S2	Numbers, a baseline and a deadline — not aspirational language
7	Integration: disclosures in the mainstream report, not a standalone CSR section	SLFRS S1	A bolt-on CSR chapter is technically filed but misses the standard’s intent

How each criterion is scored

Value	Meaning
Present 1.0	The required element is disclosed.
Partial 0.5	The element is partly disclosed, or disclosed in a materially qualified form.
Absent 0	The element is not disclosed.
N/A —	The requirement genuinely does not apply. Excluded from that company’s denominator entirely.

Criterion 3 additionally admits a quarter value (0.25), explained immediately below. No other criterion uses it.

The transitional reliefs rule (criterion 3)

SLFRS permits first-time reporters to defer Scope 3 disclosure. That relief is legal and legitimate — but electing it is not the same as measuring and publishing, and an open-ended deferral is not the same as a dated one. Criterion 3 therefore scores on four levels:

Value	Condition
1.0	A quantified Scope 3 disclosure is made. Partial-category measurement also scores here, provided the undisclosed categories are explicitly deferred with a stated date or relief timeline.
0.5	No quantified disclosure; the company elects the transitional relief as an explicit deferral carrying a date, reporting year, or stated timeline.
0.25	An explicit deferral with no date, year, or timeline. The company says it is not disclosing Scope 3, and may give a reason, but commits to no point at which it will.
0	No quantified disclosure and no explicit deferral — silence.

In one sentence: full credit for measuring and publishing, half for a deferral with a date, a quarter for a deferral without one, none for silence. A weighting we cannot explain in one sentence is a weighting we cannot defend.

Score and bands

All applicable criteria carry equal weight. We invent no composite index and apply no hidden multipliers. The score is simply elements present ÷ applicable elements, expressed from 0 to 1.00 and mapped to a band:

Band	Score	Meaning
Comprehensive	0.85 – 1.00	Nearly all applicable required elements disclosed
Substantial	0.65 – 0.84	Most elements present, with identifiable gaps
Partial	0.40 – 0.64	Significant gaps across several elements
Minimal	0.15 – 0.39	Most required elements missing or boilerplate
Non-disclosing	below 0.15	Required elements largely absent, or no mandatory report filed

We publish the thresholds so that the result is reproducible: a reader with the same report and this rubric should reach the same band we did. That reproducibility is the whole basis on which we ask to be taken seriously.

We report the band plus the full element checklist, and we do not assert rank-order precision finer than the evidence supports. Reporting that one company at 0.71 sits above another at 0.70 would be fabricated precision. Where two companies share a band, any ordering in the Index uses two documented tie-breakers, in this order: external assurance of sustainability disclosures (level, then scope), then quantified Scope 3 disclosure versus deferral. Tie-breakers affect ordering only — never the band.

A band is not a compliance verdict. It measures how completely a report discloses what the standards ask for. It is not a statement that the company asserts full SLFRS compliance — many report “with reference to” rather than “in accordance with”, and where that is the case we say so in the profile itself.

Recording what is absent

Marking an element “absent” means the report does not contain it. Where a company openly acknowledges that it has not met a requirement, we note that transparency favourably in the written assessment — but it still scores as undisclosed, because the score measures completeness against the standard, not candour about incompleteness. Openness earns credit in our words; it does not close the gap.

“Not disclosed” is a valid and valuable finding. We state it plainly rather than softening it into ambiguity.

Sourcing

Every mark cites the document, the reporting period, and the page or section. The completed checklist is published alongside each graded company — visible working is the difference between an assessment and an opinion. We never enter a score we cannot point to a page for.

Right of reply

At or before publication, a company may be shown its assessed checklist and invited to correct factual misreadings only — “we recorded X as absent; if we have misread the report, cite the page.” This is an accuracy mechanism, not a publication gate and not an editorial veto. Assessment, editing and the decision to publish remain entirely ours, and full drafts are never shared for approval.

Verified errors are corrected promptly and openly, under our correction policy. To raise one, write to editor@esgnexus.lk.

What is compared with what

Tier A — scored, ranked and compared like-for-like: mandatory-cohort filings only. This comparability is protected and never diluted. Tier B — profiled but unranked: private and non-mandatory entities, assessed on a clearly labelled voluntary basis and kept out of the Tier A ranking unless their disclosure is genuinely comparable. Sponsored content is walled off entirely, is always labelled, and is never graded or ranked.

Version control

The methodology is versioned in public. Any change to the criteria, weights or bands increments the version and requires re-scoring earlier profiles before they are compared within the Index — otherwise the Index would be comparing companies measured with different rulers. Every graded profile states the version it was assessed under.

v1.2 — August 2026

Undated-deferral amendment to criterion 3. Adds a quarter value (0.25) for an explicit Scope 3 deferral carrying no date, year or timeline; Partial (0.5) now requires the deferral to be dated. Present and Absent are unchanged, as are all criterion wordings, weights and bands. Prompted by a filing that deferred Scope 3 with a stated reason but no date — a case v1.1 left undefined between “explicit, dated deferral” and “silence”. All previously published profiles were re-scored against v1.2 on amendment; where a re-score changed a published band, the profile was updated.

v1.1 — 29 July 2026

First-year reliefs amendment to criterion 3. A bare transitional-relief election moved from Present to Partial; quantified Scope 3 disclosure (including partial-category measurement with the remainder explicitly deferred) scores Present; silence remains Absent. Criterion wordings, weights and bands unchanged. Prompted by a headline-band tie between a deferring reporter and a measuring, assured one. All prior profiles re-scored on amendment.

v1.0 — July 2026

Initial published methodology.

ESGNexus Disclosure Grading Methodology · Version 1.2 · Last updated August 2026
ESGNexus is Sri Lanka’s independent platform for ESG, CSR and sustainability intelligence. All editorial content is independently produced; sponsored content is clearly labelled.

Data disclaimer: assessments are based on publicly available documents. ESGNexus does not independently verify company disclosures or conduct audits. Errors and omissions excepted.