What is materiality?
Materiality can be a little bit difficult to get your head around. It’s a concept that has roots in financial disclosure and the notion that investors have a right to relevant information that could inform their decision to invest or not.
The idea that companies must disclose more than financial information, and not only to investors but to a wide range of stakeholders in society, originated with the Exxon Valdez oil spill in 1989. The Global Reporting Initiative (GRI) arose out of this tragic event, and along with it a new concept of materiality in the sustainability disclosure context.
Here is how GRI defines materiality:
Material topics… [are] those topics that have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large.
Put simply, material topics are those that have been identified as the most important for your organisation or business.
Materiality assessment is the process of identifying and prioritising the topics. We like to think of it as the foundation of sustainability strategy and everything that follows, from goal-setting, to reporting and communications.
During the early stages of working with Grain, we’ll typically take you through a materiality assessment. This starts with research to understand your organisation, where you’re at in your sustainability journey, the context of your sector, the value chain, physical location, and other relevant factors. We’ll then engage your stakeholders to gather their views and priorities on the most important and relevant issues for your business.
Your materiality assessment provides:
- An accurate snapshot of where the organisation is in terms of sustainability
- A clear view of your most relevant issues and opportunities for change
- A shared vision of issues of importance to your organisation and all your stakeholders
- Insight on where to allocate resources in the near and longer terms
- A strong foundation for strategy and action on sustainability
- A reference point to review and update as you progress in your sustainability journey
Materiality assessment is a crucial first step in your strategic process. We’re here to guide you through.
If you would like to identify and prioritise the sustainability issues for your business, get in touch on +44 20 8187 7040, email firstname.lastname@example.org, or book in a chat.