The principle of materiality is taking an increasingly important role in business sustainability, yet some still find it a challenge. In the first of a new series of practitioner briefings; Corporate Citizenship has taken a step back and created a new simpler materiality assessment framework.
In our 2012 reporting research, Added Value Through Sustainability Reporting, we were surprised that the biggest challenge facing reporting practitioners was “communicating the right information to the right audience”. To tackle this challenge, re-imagining materiality – whether an aspect or issues is sufficiently important to warrant attention – was our first stop. Looking at the numerous knotty factors behind materiality assessment we identified three important elements; purpose, process and perspectives – the 3-Ps.
A clear understanding of the Purpose of materiality assessment helps manage expectations and drives the optimisation of results. An important consideration is recognising the role of materiality in better decision making for a broad range of sustainability activities, not only reporting. At the core of materiality assessment is comparing internal and external Perspectives, probably using both qualitative and quantitative approaches. Efficient use of existing sources can help trim costs here while bringing in contentious viewpoints can really boost its value. The exact assessment Process needs to be matched to the Purpose and Perspectives, but it generally comprises of three stages. The identification and context stage where issues and stakeholder perspectives are examined in terms of norms and standards before being scored during the analysis stage. The testing stage then checks for robustness.
The 3-Ps gives a strong evidence base for decision making in areas such resource allocation, program initiation and of course reporting where understanding the right issues for the right audience need no longer be hit or miss.
More on the 3Ps is available here.