Prioritising material topics
After collating stakeholder input, the next phase of a materiality assessment is analysing the data gathered to understand recurring themes and priorities raised. This analysis should identify key concerns significant to both stakeholders and your organisation. The goal here is to prioritise these issues based on two primary criteria: their potential impact on the business and their importance to stakeholders. This step will show you the topics that should be focused on in your sustainability report and strategy.
Defining the impact, risk or opportunity
Once you have a list of sustainability matters or themes, it’s important to take these broad topics and define the precise impact, risk or opportunity (these matters can have a positive or negative impact) relevant to your organisation.?
etOso report software has typical industry impacts, risks and opportunities for over 77 industries built into it to provide a well-researched basis for your first report.?
Read more about how you can identify what truly matters in terms of impact, and prioritise actions in your sustainability strategy that make a real difference here.?
Extracting insights from stakeholder engagement
Once you have a list of these outputs, it’s important to assess the severity of each impact, risk or opportunity. This process will allow you to prioritise and guide your focus not only for reporting but for building a well-targeted strategy. Your stakeholder’s input should inform this, so your engagement should help you conclude on these 3 aspects:
Quantitative scores
Develop a scoring system that factors in weightings for severity, likelihood, and impact on the company's ability to execute strategies, manage risks, and drive innovation. Scores can be assigned to each topic based on stakeholder input and your own analysis.?
领英推荐
Aligning with Strategic Pillars?
We also recommend assessing the importance of each topic to your business. How important is the topic for the company’s ability to execute strategies, manage future risks and drive innovation? Combined with your stakeholder input, you’ll gain a holistic understanding of the importance of topics to your value creation.?
?Organising Topics
Next, arrange your topics in order of significance and establish a cut-off point. This will decide which topics are ‘material’, and will be the focus of the report, and which are not severe enough to warrant further investigation at this stage. If you're reporting under CSRD you will have to report on every topic identified in the materiality process, however if you're reporting voluntarily you can choose a cut-off point that makes sense for your resources.?While cut-off points can vary and there is no exact guidance, the decision should be documented and visually represented on a diagram. For small- to medium-sized businesses we recommend having no more than a dozen topics to keep your report focused.?
Map double materiality - Visualise topics onto a materiality matrix.
The next step is to visualise your analysis using a matrix. Plotting each topic based on its assigned ranking, with one axis representing significance to stakeholders, and the other for impact on society and environment. This will clearly portray the significance of each issue and can be used in your end report to show your materiality process. Here’s an example of the end result:
?
?
For each identified impact, risk or opportunity, the final step is to determine, what these relate to (i.e., own operations, upstream or downstream value chain) and the time horizon for the impact (short-, medium-, or long-term). This will help you disclose on this topic in a relevant way.
?
Once the work you have done has been reviewed and verified by key stakeholders, this step marks the end of your materiality assessment. You now have a defined list of the most important topics to your business, identified where and when they are likely to occur and can begin planning your KPIs, collecting data, and measuring your footprint.