Materiality assessment in CSR & Sustainability: What is it and why is it important to your sustainability strategy?
Developing a materiality assessment was the topic of our recent Members Network Meeting where members of the network had the opportunity to experience, through a role play scenario, the process involved in developing a materiality assessment. In addition they were provided with the necessary tools to develop their own materiality assessment in their organisations.
Materiality assessment is about identifying the CSR priorities you should focus on and report on with your stakeholders.
Organisations are faced with a wide range of topics and opportunities on which they could focus in their CSR strategies and sustainability reports so the important question to ask is how can they identify what’s relevant?
Relevant or material topics are those that encapsulate the organisation’s economic, environmental and social impacts and those that influence the decisions of stakeholders—both internal and external.
Organisations determine materiality through stakeholder engagement by asking stakeholders to evaluate the importance of economic, environmental and social impacts.
Why is it important?
• It establishes dialogue with stakeholders if not already in place
• It results in a better chance of meeting those stakeholder needs that are in line with business needs and objectives
• It gives a clear mandate for your strategic focus from those who are affected most by it – those who could otherwise be your most vocal critics.
• It provides the evidence needed to drive internal buy-in for your CSR agenda
• It clarifies what should be supported and discussed in resourcing and reporting (e.g. GRI G4 reports)
Examples of materiality can be found in the sustainability reports of some of our member companies ( BAM, Boots, BT, CRH, ESB, Intel, Smurfit Kappa Group, State Street). They describe in good detail the process adopted and any choices made to engage with stakeholders to identify the issues with impact. Ultimately materiality is about being transparent about who was consulted, how and when about materiality.
There are 3 main steps involved in developing a materiality assessment:
1. Identify stakeholders – internal and external – to discuss topics
2. Prioritise topics with stakeholders – from long lists of principles / possible topics
3. Develop engagement plan to reach out
How Business in the Community Ireland can help
We can help your company manage a materiality assessment process including:
- Desktop research on key trends and issues for your sector
- Workshops plus tools and templates to identify & prioritise stakeholders
- Workshops with senior teams to identify and prioritise issues internally
- Stakeholder engagement plans
- Development and administration of staff surveys, facilitation of focus groups and interviews to gather stakeholder input into this process.
- Support in developing the materiality matrix
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