Stakeholder interviews are a crucial part of a Double Materiality Assessment (DMA), which helps businesses understand how their actions impact the environment and society, and how environmental and social issues affect their financial performance. These interviews provide important insights from the people who are directly affected by or can influence the company’s operations and sustainability efforts.
This guide breaks down the steps for conducting stakeholder interviews as part of a DMA, ensuring that you gather useful and actionable information.
Step 1: Define the Purpose of the Interview
Before you start the interviews, it’s important to make sure everyone is on the same page. You need to clearly define the purpose of the interview so it aligns with the broader goals of the DMA.
Explain the Goal
The purpose of the interview is to assess sustainability issues from two angles:
Impact Materiality
Understand how the company’s operations affect the environment and society.
Example: How does the company contribute to climate change? What impact does it have on local communities?
Financial Materiality
Look at how sustainability issues might affect the company’s finances, such as risks from new regulations or changing consumer preferences.
Example: How might carbon taxes or resource shortages affect the company’s costs or profits?
Define the Focus
Decide whether the interview will cover general sustainability topics or focus on specific issues, like climate change or resource usage. A defined focus can help guide the meeting and be tailored to individual stakeholders.
Clarify Stakeholder Role
Make sure the person you’re interviewing understands their role and how their input will shape the DMA process. By defining their role, they can focus on their role in analyzing and implementing sustainability in the company.
Questions to Consider Before the Interview
- What sustainability issues should we focus on?
- What group does the interviewee represent (e.g., employees, investors, customers)?
- What do we want to achieve from this interview?
Step 2: Identify and Engage Stakeholders
For a successful DMA, you need to gather a range of perspectives including people who are directly impacted by the company’s actions, as well as those who influence its decisions.
Choose Stakeholder Groups
Identify internal and external stakeholders, including employees, customers, suppliers, investors, regulators, and local communities. Diverse perspectives allow the company to fully account for all stakeholders and accurately portray the impacts on all groups.
Ensure Inclusivity
Make sure to include different perspectives to get a full picture of both impact materiality and financial materiality. Everyone's perspectives matter; the more stakeholder groups involved, the greater the likelihood that you will have a comprehensive report.
Schedule Interviews
Reach out to stakeholders, explain the purpose of the interview, and schedule a time that works for them. Ensure they are well-prepared.
Stakeholder Groups to Consider
- Internal: Employees, managers, company leaders.
- External: Customers, suppliers, community members, investors, regulators, NGOs.
For more information on identifying stakeholders, read our blog article Effective Stakeholder Engagement in Double Materiality Assessments.
Step 3: Make a List of Sustainability Topics
Before your interview, create a list of sustainability issues that might be relevant to the company. These should cover a range of topics based on industry standards and the concerns of stakeholders.
Review Frameworks
Use sustainability standards like ESRS, GRI, and SASB to identify important issues that should be discussed. These frameworks are helpful in scoring a materiality assessment.
Collaborate with Stakeholders
Include input from stakeholders to make sure the topics are relevant and comprehensive. Discover what the important issues are for stakeholders and score these issues on their impact and relevance.
Focus Areas
Think about environmental (e.g., climate change, pollution), social (e.g., human rights, labor conditions), and governance (e.g., transparency) issues. Focus on a particular perspective and then tailor them to the stakeholder.
Sample Questions to Identify Sustainability Issues
- What environmental problems are most urgent in your region or industry?
- Are there social or governance issues that are important to your organization or stakeholder group?
- Which sustainability topics do you think the company should focus on in the future?
Step 4: Evaluate Impacts, Risks, and Opportunities (IROs)
In this step, you’ll explore the potential impacts, risks, and opportunities of each sustainability issue. Assessing ESG risks and opportunities, such as climate risks or supply chain vulnerabilities, and their potential financial impact, means that you can predict the future impact of materiality risks. This includes both how the company affects the world (Impact Materiality) and how environmental and social issues affect the company’s financial performance (Financial Materiality).
Sample Questions
For Impact Materiality
- How does the company affect local communities or ecosystems?
- What environmental challenges do you face in your supply chain?
For Financial Materiality
- Which sustainability-related risks (e.g., climate change, regulatory changes) could hurt the company financially?
- Are there any sustainability trends that could offer new opportunities for the company?
Step 5: Evaluate the Importance of Each Issue
Once you have gathered feedback, assess how significant each sustainability issue is using a set of criteria. Determining significance will help you prioritize the most important issues.
Assess Impact
Look at the scale and significance of the impact on society or the environment. By identifying the impacts, you can understand where the sizable impacts are and where there is room for improvement.
Assess Financial Risk/Opportunity
Consider how each issue could affect the company’s financial situation. By identifying the risks, the company can prepare for mitigating the worst environmental and social risks and recognize opportunities to make improvements.
Rank Issues
Prioritize the sustainability issues based on how important they are to both the business and the broader world. This helps decide which issues require further action and disclosure.
Criteria to Consider
- Scale: How widespread is the issue’s impact?
- Likelihood: How likely is the issue to happen or worsen?
- Remediability: How easy or hard is it to fix?
- Relevance: How closely does the issue relate to the company’s operations and goals?
Example Questions
- Which of the issues discussed do you think are most urgent for the company to address?
- Which risks or opportunities will have the biggest impact on the company’s financial performance over the next 5-10 years?
For more information on materiality assessments, read our blog article How to Run A Double Materiality Assessment.
Step 6: Prioritize and Report Findings
After evaluating the materiality of the issues, organize the results into a materiality matrix or similar chart to show which issues are most important. The matrix will guide the company’s next steps.
Create a Materiality Matrix
Use the materiality matrix to visually categorize the sustainability issues based on their impact and financial importance. Visualizing the important issues can help pinpoint the sustainability strengths and weaknesses of the company. It can also help stakeholders visualize where they can divert their effort to reduce the risks and maximize the opportunities for the company.
Prepare a Report
Write up the findings, including the materiality matrix, prioritized issues, and recommendations for action for the company. This will make it easier to share with internal and external stakeholders.
Communicate the Results
Share the report with company leaders and integrate the findings into the company’s sustainability strategy. Aligning everyone in the company to focus their efforts on the sustainability issues identified in the meeting will allow for future communication and discourse to continue.
Report Elements
- A summary of how the interviews were conducted.
- A materiality matrix showing which issues are most important.
- Recommendations for addressing the most significant sustainability issues.
- How the findings will inform the company strategy, reporting, and operations.
Step 7: Follow-Up and Keep Stakeholders Engaged
After the interviews and reporting, maintain ongoing communication with stakeholders to ensure their views are continuously integrated into the company’s sustainability practices.
Provide Updates
Keep stakeholders informed about progress and how their input is being used. Tailor this to specific stakeholders so they understand how their input specifically impacted the sustainability progress of the company.
Get Feedback
Ask stakeholders to review the final report and provide additional feedback, especially if the company’s strategy changes. Stakeholder feedback allows the company to continuously update the strategy and maneuver to change plans, as needed.
Engage Regularly
Set up follow-up meetings to ensure continuous dialogue on sustainability matters and guarantee stakeholders remain involved.
In Conclusion
Stakeholder interviews are a critical part of the Double Materiality Assessment (DMA) process. By understanding both the company’s impact on the world and the world’s impact on the company, organizations can make smarter decisions, manage risks, and create long-term value. This step-by-step process will help you gather meaningful insights that can inform decision-making, improve transparency, and strengthen sustainability efforts.
