Our process for delivering a materiality assessment
The precise approach we take depends on the type of materiality assessment being conducted and the stakeholders involved, but the general process is as follows:
01
Identification of environment, social and governance issues.
02
Engagement with stakeholders, directly or indirectly to understand impacts, priorities and business operations.
03
Weighting and combining individual viewpoints to form a collective evaluation of the ESG issues important to a company.
04
Production and communication of a materiality matrix.
How we assess materiality
Companies can impact and potentially positively contribute to a huge range of environmental, social and governance (‘ESG’) issues. Understanding which to prioritise is essential. A materiality assessment evaluates the relative importance of different issues, and establishes the business case for setting strategic targets/actions in certain areas, whilst also clarifying the ESG issues that are not urgent to address.
The end result of a materiality assessment is a materiality matrix, which visibly shows the relative importance of environmental, social and governance issues. A traditional materiality assessment evaluates this through two lenses - the importance of an ESG issue to a business, and the importance of the issue to stakeholders. A double materiality assessment evaluates this through slightly different lenses – the potential an ESG issue has to impact on a business's financial performance, and the potential a business has to impact (positively or negatively) on that ESG issue. We conduct both types of assessment.
