Businesses today are faced with a plethora of challenges and risks. Pressure from customers, stakeholders and government legislation can be overwhelming, only made more urgent by sustainability rising to the top of the agenda for many.
But how do you identify the risks most prevalent to your business and ensure you prioritise your limited time and energy?
A materiality assessment also referred to as a materiality study, index, or matrix, is an invaluable tool to help lead your business in the right direction. A materiality assessment is designed to help you identify risks specific to your organisation and discover opportunities to better your business. This ultimately enables you to gather strategic insights to drive action and change.
There can be huge benefits when completing a materiality assessment, including:
- Helping to determine the focus of your sustainability strategy
- Building senior stakeholder awareness, trust, and critical relationships
- Identifying undiscovered or overlooked opportunities
Getting started with a materiality assessmentA materiality assessment focuses on two questions:
1. Business activities: Which issues will have the most significant impact on your business?
2. Stakeholders: What is most important to or has the biggest impact on your stakeholders?
What could your materiality assessment include?
During the identifying issues process, consider the two axes of your materiality assessment. Using these to help plot your issues accordingly.
Y-axis: Stakeholder importance
X-axis: Business impact
Where should you start?
- Identify sourcing risks: product availability determined by climate change, the legal landscape, and ongoing sustainability issues like deforestation and water scarcity.
- Review trade reports: are there any upcoming risks to your business or products?
- Survey the leaders in your business: what do they perceive as risks and opportunities?
- Survey your customers: review feedback such as net promoter scores for clues.
- Check your national sustainability initiatives: for example, achieving net zero by 2050 in the UK.
- Identify your most important products/ingredients based on: most profitable, most loved, signature, or known sustainability issue.
examples of a materiality matrix?
Unilever identified 169 topics grouped into 19 issues. View the full matrix report here.
In a recent Webinar - Global Sustainability & Climate Change Leader, Cheryl Hall, shared her experience of running a materiality study for Walgreens Boots Alliance.
Performing a materiality assessment is only the tip of the iceberg when creating a strategic sustainability data map for your business. A complete strategic sustainability data map will enable you to define and obtain your product data.
In “The Complete Guide to Data-Driven, People-Centric Sustainability”, we cover how to build a successful strategic sustainability data map in 6 simple steps. Click below to get your free copy.