Sustainability: Why should you care about materiality?
A materiality assessment is the important first step on your sustainability journey.
Times have changed for companies. Society is openly calling on companies to act more responsibly and ethically, and consider their impact on the planet. Government and regulators are also stepping up their game; with a 72% increase of the number regulations concerning non-financial issues since 2013. Amidst all this, many companies already care deeply about these issues and are trying to work out how they can contribute to building a better world.
Sustainability can seem pretty daunting. Not every company has teams or whole department’s dedicated to the subject. It might not be a typical part of someone’s day-to-day job. It may be unclear exactly what it means for their company and how they can then have an impact. Even when companies do have large sustainability teams it can be tricky to know where to begin. What should the priorities be?
The first step for anyone starting their sustainability journey is to undertake a materiality assessment.
What is a materiality assessment?
A materiality assessment is an exercise designed to identify which sustainability issues are:
- most relevant to your company
- important to your stakeholders
- central to operational longevity and success.
For example, if you are a recruitment firm, water scarcity is unlikely to be important to your business, but diversity and equality would be. In comparison, if you are a food and drinks manufacturer, water scarcity will likely be absolutely core.
At Emperor, as part of our assessment process, we review a wide spectrum of sources. This includes internal documents and reports, international standards (such as GRI), peers and competitors, social media, and we engage with a broad range of stakeholders to gather their thoughts. This helps us compile a list of relevant issues, which we then refine and prioritise to give an overview of which sustainability issues to prioritise and focus on.
It’s the basis for your framework
From here, issues can be grouped and organised into a strategic framework. Within this, policies and targets can be developed and sustainability embedded more prominently within the business.
This all helps the client to understand their company within a sustainability context, helping everyone to prioritise and focus their efforts in the right areas.
Integrating sustainability issues into the core business is critical. Sustainability should never be bolted on as a secondary consideration. It needs to be a seamless part of what we do every day, woven into a company’s strategy. This is what will lead to change.
It’s always useful to do
Even for companies who are further along on their sustainability journey, undertaking a materiality assessment can be a really useful exercise. For example, we recently worked with a client who already had a sustainability strategy in place. However, the assessment identified a few crucial areas they had not considered before and they have since incorporated them into their existing strategy. The result is a much more robust and effective strategy that really gets to the heart of the key issues affecting the company’s stakeholders and is helping them have a much bigger impact.
It’s just the start
A materiality assessment is of course just the first step in building a fully-rounded and strategic approach to sustainability. From there, you can begin to develop other important areas, such as reporting on your progress, engaging with all your different stakeholders on the issues most pertinent to them and launching initiatives that will have a big impact.
Although sustainability can at times seem like an overwhelming topic, it need not be. It is really just about operating in a more considered way. Sustainability is integral to long-term success; getting it right makes your business more resilient, improves stakeholder relationships holders, reduces costs, and addresses legislation and regulation. Taking this first small step will not only show how we can an impact, but put you onto the road to help create more responsible companies and, ultimately, a better society.