Materiality – What Matters?
This is the heart of effective sustainability management in business. And it does more than merely pop out a list of “priority issues”. For an efficient response to sustainability, our materiality assessment provides the focus on relevant issues. Without a materiality process, your strategy and reporting will not serve your business effectively.
What do we mean?
Guided by peer research, desk research, talking with colleagues, customers and other ‘stakeholders’, you will start to build up a picture of a wide set of issues that have an impact on the business, and the wider world.
You will start becoming aware of sustainability standards and guidelines, such as ISO26000 or GRI. These will help populate your long list – or ‘universe’ – of issues.
So, what we mean by materiality is a process to distil all that into a short list of issues that your senior team will recognise as having some degree of impact on the company’s value and its ability to deliver its strategy.
We recommend, in line with the GRI-G4 process (and highlighted by SGX), a process like this:
- Identify a universe of issues (a broad-ranging list). Ask yourself what impact occurs inside your organisation? What impact occurs outside it?
- Prioritise, them using outside help. Guided by the outcomes of an internal view of what’s important, as well as by outside perspectives, a shortlist of issues is achieved. These are sometimes plotted on a materiality matrix.
- Validate, using a senior management workshop, for example, to make sure the range of issues (aspects) is correct, and that you have a complete picture regarding the information through the reporting period.
- Review. Do this after you have published a Sustainability Report. Check in with stakeholders during the year ready for the next materiality assessment.
What do I get from Paia?
The process can be ‘light-touch’. It can also be in-depth, and quantitative. At Paia we adapt the process to suit your needs.
We have years of experience in materiality processes, working with clients year after year to improve and rationalise, according to the business need and the reporting approach.
We are very familiar with stakeholder engagement, including AA1000APS, and have a wide network that could help supplement your stakeholder list during the external engagement part of the process. We can also provide online surveys to complement the external perspectives on your key sustainability issues.
We have a number of bespoke tools that we can draw on to create an auditable process that will withstand scrutiny by external assurance providers. Our consultants have taken ‘Big 4’ auditors through our materiality processes.
Finally, we are very experienced in running executive level workshops (for validation), due to our extensive client track record worldwide, and supplemented by our long experience of delivering training seminars under GCNS.
What happens after?
Of course, connecting the outcomes of the process to the report development is crucial, so we help you navigate that part, for example, to attach KPIs to material ‘aspects’, understand the GRI-G4 management approach information required, create a GRI Index. We can also help you through your Materiality Check under GRI, including understanding the subtleties expected by GRI.
Find out more in a Materiality training session.