What is a Materiality Assessment?
The traditional process for running materiality assessments can be complex, time consuming, and expensive; hindering companies from performing them as frequently as they should.
A materiality assessment is a process used by organizations to determine and prioritize the sustainability issues that are most significant (or material) to their business and stakeholders.
Key components of materiality assessments include:
- Scope: Defining the approach and objectives for your assessment
- Topics: Short-list of topics that are potentially material to your industry and business
- Stakeholders: Identify various stakeholders, both internal and external to the organization
- Survey: Collect data from stakeholder surveys, complemented with qualitative interviews and focus-groups as required
- Prioritization: Analyze and validate the gathered data to determine the significance of the sustainability topics and their impact on the organization and its stakeholders.
- Reporting: Disclose the results of the assessment and use it as a starting point for your sustainability reporting and improvements
Why are Materiality Assessments Important?
Materiality assessments are essential as one of the first steps in an organization's journey to navigate the complex landscape of sustainability reporting. They are incredibly important for a company to understand their material risks and opportunities, as well as their material impacts on people and planet, allowing them to prioritize key areas for ESG implementation.
Materiality assessments can be deployed by public and private companies, consultants, advisors, private equity firms and more.
What is single and double materiality?
Single materiality only focuses on the organization's financial materiality. For example, does the sustainability topic have an actual or potential impact on the enterprise value of the organization considering opportunities and risks?
Double materiality focuses on both the organizations financial materiality and impact materiality. The impact materiality being how the organization's operations impact the world. For example, does the company’s activities in relation to the sustainability topic have an actual or potential significant impact on people or the environment over the short, medium, or long term?
How Socialsuite Can Help
Socialsuite’s Materiality Assessment software eliminates the complexity and simplifies the process surrounding conducting a materiality assessment.
Our differentiating capabilities:
- Quickly and easily select potentially material topics for your industry from our dynamic sustainability topics database leveraging the key topics used by SASB, GRI, MSCI, S&P Global and others.
- Assign stakeholder group weights: Adjust stakeholder group weights to balance the voice of particular stakeholders
- Select single or double materiality responses; double materiality aligns to the CSRD and ESRS regulations
- Data results and matrix: All survey responses and held within the platform and automated into reports and matrixes for further analysis.
- Mapping to SDGs: We align your material topics with the Sustainable Development Goals (SDGs) to make them more comprehensible to your audience.
- Report deliverable: Receive a short report including process methodology , material topics, a materiality matrix, analysis, and SDG mapping.
Over 100 public and private companies trust Socialsuite with their sustainability reporting. You can report faster and save money compared to traditional methods by partnering with us. Contact us to learn more about our solutions.
