{"id":181,"date":"2020-07-17T07:43:36","date_gmt":"2020-07-17T07:43:36","guid":{"rendered":"http:\/\/13.234.66.145\/blog\/?p=181"},"modified":"2020-07-17T07:43:37","modified_gmt":"2020-07-17T07:43:37","slug":"importance-of-materiality-assessment-for-sustainability","status":"publish","type":"post","link":"http:\/\/13.234.66.145\/blog\/index.php\/2020\/07\/17\/importance-of-materiality-assessment-for-sustainability\/","title":{"rendered":"Importance of Materiality Assessment for sustainability"},"content":{"rendered":"\n

The concept of sustainability has\ngained tremendous popularity over the past few decades and continues to take\nover organizational strategy in various sectors.  Many companies have successfully incorporated\nthe environmental, social and governance factors in their business process to\nattain sustainability and many more are willing to follow sustainable\npractices. But, attaining sustainability is not that easy. Changing the entire\nbusiness process of a company in order to incorporate sustainable practices,\nputs the company\u2019s performance and profitability at stake. Addressing each and\nevery issue related to the ESG (environmental, social and governance) factors\nmay not be feasible for a company. For practical and effective implementation\nof sustainable practices, it is important to analyse and identify the issues\nthat are most important for a company and design a sustainability strategy\naccordingly, this is where the term \u201cmateriality assessment\u201d comes into\npicture.<\/p>\n\n\n\n

Materiality assessment is the\nstepping stone in a company\u2019s path towards sustainable development. The process\nof materiality assessment shapes a company\u2019s sustainability strategy and defines\nits reporting. It helps a company analyse risk factors and upgrade its business\nprocess for future prospects. Materiality assessment is also an important tool\nto meet the expectations of stakeholders.<\/p>\n\n\n\n

Role of stakeholders<\/h1>\n\n\n\n

Stakeholders play an important role in materiality assessment as they are the people or groups that influence or get influenced by a company\u2019s actions. For any company, there are many stakeholders within the company and outside the company, and involvement of all these stakeholders is necessary for carrying out a meaningful materiality assessment. <\/p>\n\n\n\n

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The opinion, views and advice of all the stakeholders matter a lot in developing strategy. It is very important for companies to know their stakeholders and communicate with them through stakeholder engagement programs. <\/p>\n\n\n\n

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A materiality assessment can be successfully carried out through a process involving systematic plan of actions.<\/p>\n\n\n\n

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Materiality survey and matrix<\/h1>\n\n\n\n

Carrying out a materiality survey among stakeholders is an effective way of seeking useful information and data related to ESG issues. The survey should be designed keeping in mind the various ESG issues and their impacts. The questions should include rating of the importance of these issues on a definite scale. After conducting the survey, the results can be represented in the form of Materiality Matrix. This process helps in visualizing the findings of a materiality assessment and analyzing. Below is an example of materiality matrix of Arvind fashions. This was collected from publicly available information. One can find this information in an organisation\u2019s sustainability report or the annual report.<\/p>\n\n\n\n

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Reporting<\/h1>\n\n\n\n

The concept of materiality was\noriginally used for financial reporting, but with the rising demand of\nsustainability, it is now being used for sustainability reporting. Materiality\nassessment helps in deciding which issues should be included and focussed on\nwhile preparing an effective sustainability report. To ensure transparency in\nsustainability reporting, GRI (Global Reporting Initiative) had launched G4\nsustainability reporting guidelines in 2013. Since then the GRI framework\nbecame the most widely adopted standard for sustainability reporting, globally.\nCompanies also consider the guidelines of SASB (Sustainability Accounting\nStandards Board) and IR (Integrated Reporting) for their sustainability reporting.\n Following proper reporting guidelines\nenables a company to communicate it\u2019s sustainability programme and performance\nto its stake holders and customers.<\/p>\n\n\n\n

With investors becoming aware of\nSDGs and making investments through the SDG lens the SDG (Sustainable\nDevelopment Goals) framework is fast becoming a favourable choice of SMBs as\nwell as Start-ups for their sustainability review.<\/p>\n\n\n\n

 The entire process of materiality assessment\nhelps companies in managing risks, refining and upgrading their strategy and\nbuilding trust among its stake holders.<\/p>\n","protected":false},"excerpt":{"rendered":"

The concept of sustainability has gained tremendous popularity over the past few decades and continues to take over organizational strategy in various sectors.  Many companies have successfully incorporated the environmental, […]<\/p>\n","protected":false},"author":1,"featured_media":184,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[34,3],"tags":[44,48,47,43,13,45,35,30,8],"_links":{"self":[{"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/posts\/181"}],"collection":[{"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=181"}],"version-history":[{"count":1,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/posts\/181\/revisions"}],"predecessor-version":[{"id":186,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/posts\/181\/revisions\/186"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/media\/184"}],"wp:attachment":[{"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=181"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=181"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/13.234.66.145\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}