Materiality assessments take many forms, but the common denominator in most methods is stakeholder engagement. On the basis of conversations with people inside and outside the business, companies develop a ‘heat map’ to show which material issues pose the highest risks or greatest opportunities.
But is opinion enough? Can stakeholders really tell you whether human rights is a bigger issue than water stewardship, taking into consideration your whole supply chain? What people think and feel is important, but, really understanding environmental and social impacts should also involve finding and evaluating objective evidence.
That’s where science ought to come in, with the promise of answering some of the hard questions – like how big the problem is, the scale of action required to fix it, and what your fair share of the challenge might be. A growing number of companies are looking for a more evidence-based approach to some of these questions. The relatively easily-measurable field of carbon emissions is the most common focus, with 193 organizations now signed up to the Science-Based Targets Initiative focused on tackling climate change.
Comparing environmental and social impacts
However, bringing the evidence about issues as diverse as human rights, water scarcity and finite resource depletion into the same frame in an objective way is challenging. We have been developing an evidence-based materiality assessment method to tackle this challenge and enable an organization to bring in context, focus on the long term and prioritize key issues. Our evidence-based approach starts with a review of available literature on global megatrends, NGO research, Life Cycle Assessments, official statistics, academic research and cross-industry studies. We carry out an analysis based on the frequency and intensity of impacts for key products and materials in the value chain to yield a normalized and comparable scale for environmental and social impacts. Through this, we are able to rank material issues relative to each other and help our clients understand which of their products are causing the biggest risks and impacts in the value chain. Key materials, top-selling products and sales revenue data are all taken into account in the analysis in order to prioritize what the biggest drivers of environmental and social impacts are at a product level.
We recently used this method with a major retailer who wanted to understand where the biggest sustainability impacts are in the value chains of their key their product categories. We analyzed the impacts which arose from their products in both the supply chain and use life phase, and identified materials driving these impacts in each product category. This work is now being used to inform the retailer’s sustainability strategy.
Science and the SDGs
The Sustainable Development Goals (SDGs) are emerging as a useful framing tool for material issues, bringing a shared context for strategy and action. As the SDG movement takes shape, we are helping our clients understand how they can align their strategy to the SDGs. An evidence-based materiality assessment can evidence contributions – negative or positive – to the most relevant SDGs, and inform strategy development.
As more companies look to validate the views of stakeholders with real evidence about impacts, we expect to see the use of science become central to risk mitigation. It may seem daunting to bring the vast array of scientific literature from academia, government and other places into a materiality assessment, but pragmatic approaches are possible and there are important new insights available about the real priorities for companies that do.
We have extensive experience with materiality and strategy engagement. Please contact Consultant Yvonne.Ngo@anthesisgroup.com or Director Ben.Tuxworth@anthesisgroup.com if you would like to find about more about how Anthesis can help you with an evidence-based materiality assessment. Or alternatively, use our fill out form below:
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