Sustainability action can seem too all encompassing, and for some organisations it might feel like trying to boil the ocean (so to speak).
Organisations need to focus on what is important to them, their stakeholders, and the most impactful areas. Whether a big or small organisation, going through a process called ‘a materiality assessment’ can help guide this focus.
What is a materiality assessment?
A robust materiality process ensures that critical issues to the organisation are reflected in its sustainability strategy and future action. It is foundation of a sustainability strategy and is the difference between undirected action and action that is logical, planned and based upon what's important.
How to conduct a materiality assessment
There are many different methodologies for conducting a materiality assessment. These vary by depth and scale depending on the intended use of the findings. If the assessment will inform the sustainability strategy of a large, multinational corporation, then it is likely to require an in-depth and detailed piece of research. If it is to guide initial thinking for an SME, then a light touch approach will suffice.
Regardless of the scale and depth, materiality assessments follow the same general steps:
This will help to identify the full range of sustainability topics that have the potential to be important. This may involve exercises such as a peer review or external benchmarking that will also help gain an understanding of where the organisation is currently at.
This can include engaging with relevant employees, customers, investors, government and policy makers, suppliers, analysts, civil society, and other non-governmental organisations.
Pull all the results from the assessment to categories issues in terms of priority and identify focus areas.
With an understanding of what issues are important and where the impact areas are, an organisation can be much more directed in where to focus goals, commitments, and targets. This is the foundation of thinking more strategically about sustainability action, but it can also guide management decisions when allocating resources and finance.
We have helped many clients go through their materiality assessments, whether it is getting started for SMEs or consolidation process for large corporates. We help make sure that the findings are usable and distilled in a way that is authentic to the organisation and its people.