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How do you match materiality results with your business goals?

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Materiality analysis is a key step in developing a corporate sustainability strategy that aligns with your business goals and stakeholder expectations. It helps you identify and prioritize the environmental, social and governance (ESG) issues that matter most to your company and your stakeholders. But how do you translate the results of your materiality assessment into actionable and measurable objectives and initiatives? Here are some tips to help you match materiality results with your business goals.

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1 Understand your materiality matrix

A materiality matrix is a visual tool that plots the ESG issues that you have assessed based on their importance to your stakeholders and your business impact. The issues that fall in the upper right quadrant are the most material ones, meaning they have high relevance and significance for both your stakeholders and your business performance. These are the issues that you should focus on and report on in your sustainability strategy and communication. The issues that fall in the lower left quadrant are the least material ones, meaning they have low relevance and significance for both your stakeholders and your business performance. These are the issues that you can monitor and manage internally, but do not need to disclose or invest in extensively.

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Babar Ali - Sustainability Consultant ????

Sustainability & ESG Professional ?? | Sustainable Businesses Transformation | Making Way Through Sustainability Strategy
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"Understand your material matrix" Materiality assessment is conducted through the material matrix and it helps you understand the topics and material issues that are significant and those which are less important. The material matrix gives clear visuals of which needs to be tackled first in order to improve the performance. It's one of the main points which need to be understood for material assessment.

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2 Align materiality results with business goals

Once you have identified your most material issues, you need to align them with your business goals and vision. This means that you should consider how addressing these issues can help you achieve your strategic objectives, such as increasing profitability, enhancing reputation, reducing risk, improving innovation, or attracting talent. For example, if one of your most material issues is climate change, you can align it with your business goal of reducing costs by setting targets and initiatives to reduce your greenhouse gas emissions and energy consumption. You can also align it with your business goal of enhancing reputation by communicating your climate actions and achievements to your stakeholders and the public.

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Babar Ali - Sustainability Consultant ????

Sustainability & ESG Professional ?? | Sustainable Businesses Transformation | Making Way Through Sustainability Strategy
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A sustainability strategy is the main thing that needs to be done after materiality assessment as it will show how you going to take action against those significant issues. For example, in the case of textiles, it is water-intensive due to more consumption of water in the dyeing process and it is a material issue for your customers and stakeholders as well. So, you need to have water reduction and recycling initiatives in your strategy and communicate with all of your stakeholders how you deal with those issues.

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3 Set SMART objectives and indicators

To match materiality results with your business goals, you also need to set SMART objectives and indicators for each material issue. SMART stands for Specific, Measurable, Achievable, Relevant and Time-bound. This means that your objectives and indicators should be clear, quantifiable, realistic, aligned with your business goals and vision, and have a defined timeline. For example, if one of your most material issues is employee engagement, you can set a SMART objective to increase your employee satisfaction score by 10% by the end of the year. You can also set SMART indicators to measure your progress, such as employee retention rate, absenteeism rate, or feedback survey results.

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Babar Ali - Sustainability Consultant ????

Sustainability & ESG Professional ?? | Sustainable Businesses Transformation | Making Way Through Sustainability Strategy
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Sustainability strategy is an overarching approach giving a holistic view of your long-term plans and action plan but now you need to cover one more thing and that is short-term action plans: SMART objectives play an important role in short-term action planning because here you planning to achieve the small objectives through KPIs. For example, In the textile case, we set the smart objective of 5% water reduction by the end of this year. It shows your commitment and going for proper action planning.

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4 Monitor and report on progress

Finally, to match materiality results with your business goals, you need to monitor and report on your progress regularly. This means that you should collect and analyze data on your performance against your objectives and indicators, and identify any gaps, challenges, or opportunities for improvement. You should also communicate your progress and achievements to your stakeholders, such as customers, investors, employees, or regulators, and solicit their feedback and input. This will help you demonstrate your commitment and accountability to sustainability, as well as enhance your transparency and credibility.

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Babar Ali - Sustainability Consultant ????

Sustainability & ESG Professional ?? | Sustainable Businesses Transformation | Making Way Through Sustainability Strategy
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After having KPIs, you need to follow the PDCA cycle which stands for Plan, Do, Check, and Act. You had planned through strategy, you hade covered the Do part by devising Smart objectives and KPIs. Now you are at the Chech part as you have to see how much progress against the KPI's and for that you need to collect and analyze data. for example, in case of water reduction KPI, you need to apply strategies at machine level and monitor how much water consumption was on monthly basis and see if you are going towards your target or not.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you match materiality results with your business goals?

1

2

3

4

5

1 Understand your materiality matrix

2 Align materiality results with business goals

3 Set SMART objectives and indicators

4 Monitor and report on progress

5 Here’s what else to consider

Sustainability

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How do you match materiality results with your business goals?

1

2

3

4

5

1 Understand your materiality matrix

2 Align materiality results with business goals

3 Set SMART objectives and indicators

4 Monitor and report on progress

5 Here’s what else to consider

Sustainability

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