In its latest ESG Acceleration Webinar series, Finch & Beak has raised attention on the topic of More from Materiality. The webinar specifically focused on its practical implications and the importance of having a forward-looking perspective. The article at hand further touches upon this and provides you with practical tips & tricks, in the form of a one-page cheat sheet, to help you be all set for your (next) materiality exercise.
As defined in the guidelines of GRI, a company is expected to provide insights on stakeholder’s relevance of material issues, whilst also explaining what the company’s impact is on society. According to the definition of GRI, impact refers to the effect an organization has on the economy, environment and/or society, which in turn can indicate its contribution to sustainable development. Therefore, the materiality assessment should focus on the impact of the company. If selected well, the material topics already do contribute to the company’s bottom line and therefore already have an impact on the organization, looking at eco-efficiencies, risk reduction, and value creation.
First question to ask yourself is what your organization’s objective is with the materiality assessment and how the company specific business context provides complexities to its approach. In an ideal scenario, the material assessment serves as a starting point to (re)design your company’s sustainability program, as it provides focus what matters most to your organization.
It is essential to collect topics that both cover an internal and external perspective of the company, that they have an impact on the company’s bottom line. Next to that, topics are to be within sphere of influence of the company. Purely financial and operational topics, as well as hygiene factors are recommended to be not include as those are linked to the company’s license to operate rather than the actual value creation of the organization.
Once the materiality assessment is constructed, it is time to integrate these outcomes into the organization’s business units to start generating value. A first step in this is to have your outcomes validated by senior management or executive committee members, in order to further emphasize their involvement.
To take the next step, challenge the alignment with your company’s Enterprise Risk Management to identify whether your most material issues cover the most important risks. Moreover, it is essential to map your materialities against the UN Sustainable Development Goals to look for opportunities where you as a company can add value to global sustainable development. Companies are recommended to look beyond the 17 overarching goals and to dig one level deeper to find out on indicator level your company is able to make the difference.
Once materialities are selected, and gap analysis with mechanisms such as Enterprise Risk Framework and the Sustainable Development Goals are conducted, it is time to look at key performance indicators and SMART targets that will help your organization achieve its must-win battles. A useful tool for this is the balanced scorecard which enables you to balance your business across dimensions crossing from employees, to operations, and to customers. In order to speed-up, the last step is to draft your organization’s roadmap and communicate progress to your stakeholders.
Are you considering updating your materiality assessment into a forward-looking matrix, or are you looking for a sparring partner to discuss the how to sharpen your sustainability program? Get in touch with Josée van der Hoek, Director, at email@example.com or +34 6 82 04 83 01 how Finch & Beak can support you to accelerate your company’s positive impact.