Domain E · Area E-CA2 · Data sourcing, collection, consolidation and estimation

E.6Manage estimates, proxies, models and uncertainty

Working Draft version 1.1

Purpose and scope

This unit covers the capability to determine when estimated or modelled information is appropriate, select and document proxies, extrapolation, imputation and other estimation methods, govern assumptions and uncertainty and establish review, sensitivity, approval, replacement and improvement plans. It applies where complete observed data is unavailable or where the reporting method requires modelling.

Applied competency statement

Can select, document, govern and communicate estimates, proxies, models, assumptions and uncertainty using a defensible method hierarchy, review, sensitivity and improvement process.

Boundary and escalation

This unit governs the reporting use of estimated and modelled information and does not qualify the practitioner to develop or validate specialist scientific, actuarial, econometric, valuation, engineering or machine-learning models. The appropriate methodology owner must approve specialist models, and the reporting practitioner must preserve their limitations.

Key quality risks

Using estimates without first assessing available observed data; choosing a proxy because it improves performance; applying an unrepresentative sample; extrapolating across dissimilar sites, populations or periods; hidden assumptions; false precision; double counting modelled and observed values; outdated factors or models; no sensitivity or back-testing; uncertainty omitted from disclosure; and temporary estimates becoming permanent without an improvement plan.

Required knowledge · 6

E.6-K01

Understands estimate, proxy, extrapolation, interpolation, imputation, allocation, modelled data, scenario, factor and assumption concepts and the distinction from observed data and error correction.

Knowledge Type: Estimation concepts · Normative Weight: Core

E.6-K02

Understands preference for suitable observed data, criteria for selecting estimates or proxies, representativeness, relevance, comparability, geographic and temporal fit and source hierarchy.

Knowledge Type: Method hierarchy · Normative Weight: Core

E.6-K03

Understands populations, samples, drivers, parameters, formulas, factor vintage, confidence, ranges, distributions and the need to avoid double counting observed and estimated values.

Knowledge Type: Model and assumption design · Normative Weight: Core

E.6-K04

Understands qualitative and quantitative uncertainty, sensitivity, scenario range, confidence intervals where appropriate, limitations, bias, model risk and materiality of uncertainty.

Knowledge Type: Uncertainty analysis · Normative Weight: Core

E.6-K05

Understands approval, back-testing, comparison to later observed data, model monitoring, update frequency, replacement triggers and phased data-improvement plans.

Knowledge Type: Review and improvement · Normative Weight: Core

E.6-K06

Understands how estimates, assumptions, uncertainty and limitations should be communicated and when specialist model, legal, finance, science or assurance review is required.

Knowledge Type: Disclosure and specialist boundary · Normative Weight: Core

Applied skills · 5

E.6-S01

Identify data gaps, determine whether an estimate is necessary and define the decision and reporting requirement it must support.

Skill Type: Core applied capability · Observable Output or Result: Estimation need and option assessment

E.6-S02

Select and justify a proxy, extrapolation, imputation or model using representativeness, source quality, comparability and bias criteria.

Skill Type: Method selection · Observable Output or Result: Estimation methodology, assumptions and sensitivity memorandum

E.6-S03

Apply or specify the estimate, separate observed and estimated populations and maintain parameters, assumptions, factors, versions and source evidence.

Skill Type: Implementation and control · Observable Output or Result: Estimate, proxy and model register

E.6-S04

Perform sensitivity, plausibility and comparison tests, assess uncertainty and obtain methodology-owner and accountable approval.

Skill Type: Uncertainty and review · Observable Output or Result: Estimate review and validation record

E.6-S05

Define data-improvement and replacement plans and communicate coverage, uncertainty, limitations and changes consistently in reporting.

Skill Type: Improvement and communication · Observable Output or Result: Estimate review, approval and replacement plan

Professional behaviours · 3

E.6-B01

Does not select a proxy, model or assumption to produce a preferred result and clearly separates observed, estimated and modelled information.

Behaviour Type: Estimate integrity · Non-compensable Requirement: No

E.6-B02

Does not present an estimated value with greater precision or confidence than the method and evidence support.

Behaviour Type: Uncertainty transparency · Non-compensable Requirement: No

E.6-B03

Treats estimates as governed methods with review and replacement expectations rather than an undocumented permanent substitute for data.

Behaviour Type: Improvement accountability · Non-compensable Requirement: No

Typical tasks · 4

E.6-T01

Assess the data gap, reporting requirement, available observed information, affected population and materiality of the missing information.

Primary Output Link: E.6-O02

E.6-T02

Select and document the method, source, sample, drivers, parameters, assumptions, coverage, exclusions and bias considerations.

Primary Output Link: E.6-O02

E.6-T03

Implement or review the calculation, separate observed and estimated values and perform sensitivity, plausibility and back-testing where possible.

Primary Output Link: E.6-O01

E.6-T04

Obtain approval, disclose uncertainty and limitations and define monitoring, data improvement and replacement triggers.

Primary Output Link: E.6-O03

Expected outputs · 3

E.6-O01

Estimate, proxy and model register

Output Type: Professional work product

E.6-O02

Estimation methodology, assumptions and sensitivity memorandum

Output Type: Professional work product

E.6-O03

Estimate review, approval and replacement plan

Output Type: Professional work product

Proficiency indicators

Level 1 · Foundation

E.6-L1-01

Can apply an approved estimation method, maintain the estimate register and document specified sources, assumptions, coverage and limitations.

Indicator Dimension: Task execution

E.6-L1-02

Can identify obvious representativeness, double-counting, outdated-factor or false-precision issues and escalate specialist or method questions.

Indicator Dimension: Quality, judgement and accountability

Level 2 · Practitioner

E.6-L2-01

Can independently select and operate a defensible estimate or proxy for a moderately complex data gap and perform proportionate sensitivity and review.

Indicator Dimension: Task execution

E.6-L2-02

Can explain method choice, bias, uncertainty and improvement plans and resolve routine differences between estimated and observed information.

Indicator Dimension: Quality, judgement and accountability

Level 3 · Advanced Practitioner

E.6-L3-01

Can design or critically review enterprise estimation and model-governance methods across multiple topics, entities, value-chain populations and reporting instruments.

Indicator Dimension: Method design and review

E.6-L3-02

Can challenge biased or opaque estimates, resolve high-uncertainty cases and advise governance bodies on acceptable use, disclosure, residual uncertainty and data-improvement priorities.

Indicator Dimension: Leadership and governance

Illustrative evidence · 6

E.6-E01

Estimate, proxy and model register distinguishing observed and estimated populations and versions.

Evidence Type: Work product

E.6-E02

Estimation methodology, assumptions and sensitivity memorandum with source and representativeness rationale.

Evidence Type: Work product

E.6-E03

Estimate review, approval and replacement plan with monitoring and improvement actions.

Evidence Type: Work product

E.6-E04

Sensitivity, plausibility, back-testing and comparison trail supporting the reported value.

Evidence Type: Process evidence

E.6-E05

Documented specialist, methodology-owner, data, finance, legal or quality review and the practitioner's response.

Evidence Type: Review evidence

E.6-E06

Observed explanation and defence of an estimate, proxy or uncertainty conclusion.

Evidence Type: Observed performance

Assessment · 3

E.6-A-L1

Estimate-register exercise, assumption review and situational judgement

Correct application; source and assumption documentation; observed-versus-estimated distinction; recognition of limitations and escalation needs.

E.6-A-L2

Integrated estimation case and professional memorandum

Method selection; representativeness; calculation and sensitivity; uncertainty communication; replacement governance.

E.6-A-L3

Complex model-governance case, portfolio and oral defence

Method design; bias and model-risk challenge; sensitivity and improvement governance; senior communication and oral defence.

Relationships · 6

From	To	Type	Rationale
E.2	E.6	Method, data and analytical linkage	Estimate and proxy rules may form part of or supplement the approved methodology.
E.6	E.2	Method, data and analytical linkage	Estimate and proxy rules should be incorporated into or linked to the approved metric methodology.
E.6	E.7	Method, data and analytical linkage	Sensitivity, plausibility and back-testing support validation of estimated and modelled information.
E.6	G.9	Disclosure, claims and publication linkage	Estimates, assumptions, uncertainty and limitations require transparent disclosure.
E.6	B.8	Method, data and analytical linkage	Specialist models and assumptions should be scoped, reviewed and integrated with clear boundaries.
G.9	E.6	Method, data and analytical linkage	Estimation methods, assumptions and sensitivity provide inputs to uncertainty disclosure.

Role profiles for this unit

Role	Target level	Relevance	Evidence expectation
Corporate Sustainability Reporting Practitioner	Practitioner	Required?	A case or work sample demonstrating independent performance, documented judgement and a reviewable professional output.
Sustainability Reporting Manager or Lead	Practitioner	Required?	A case or work sample demonstrating independent performance, documented judgement and a reviewable professional output.
Sustainability Reporting Adviser or Consultant	Advanced Practitioner	Role-defining?	A complex case or verified portfolio, supplemented by oral or observed defence, demonstrating method design, challenge and governance capability.
Sustainability Data, Systems and Controls Specialist	Advanced Practitioner	Role-defining?	A complex case or verified portfolio, supplemented by oral or observed defence, demonstrating method design, challenge and governance capability.
Assurance Readiness and Reporting Quality Specialist	Advanced Practitioner	Role-defining?	A complex case or verified portfolio, supplemented by oral or observed defence, demonstrating method design, challenge and governance capability.
Investor, Capital Markets and Ratings Disclosure Specialist	Practitioner	Required?	A case or work sample demonstrating independent performance, documented judgement and a reviewable professional output.