Sustainability Reporting

Phase 1
Understand the value chain impacts and relevant stakeholders

Identify stakeholders who have insights into the company’s risks and opportunities, understand the business implications of ESG matters and can offer perspectives on financial matters.

Phase 2
Determine list of sustainability topics and consider the risk and opportunities for each topic

Impact Materiality Analysis (inside-out)
Determine the positive or negative impact that the organisation has or could have on a specific issue.

Financial Impact Analysis (outside-in)
Determine which triggers or developments could pose risks or opportunities for the organisation in relation to the issue. Consider the potential effects on financial results and valuation, looking at short, medium, and long-term risks.

Phase 3
Conduct stakeholder interviews and/or surveys

Conduct stakeholder engagement through surveys and/or interviews by considering the severity, scope, irremediability and likelihood of the impact. This involves looking at the scale of the issue, how many people it affects, the extent to which the impact can be remediated and the likelihood of the impact occurring.

Conduct stakeholder engagement through surveys and/or interviews by determining the likelihood of the risk or opportunity occurring and the financial effect if it materialises.

Phase 4
Integrate results into reporting and strategy

Analyse the results of stakeholder engagement to provide a clear view of the impacts and materiality of sustainability matters as perceived by the different selected stakeholder groups. Integrate these results into reporting and the shaping of Company strategy.

Challenge

Solution

Engaging top management
Difficulty in involving the C-suite due to the
challenge of demonstrating business value.

Highlight the strategic benefits, such as risk management, opportunity identification and long-term value creation, and frame the assessment as a critical component of corporate strategy.

Defining the right granularity level for material topics
Difficulty in determining the appropriate
level of detail for issues assessed.

Tailor the assessment to the specific context of the organisation and its stakeholders, ensuring relevance and practicality without losing necessary detail.

Selecting the right stakeholders
Identifying the correct stakeholders from numerous potential groups.

Use a criteria-based approach to select stakeholders who are most affected by, or can affect, the organisation’s impacts and financial outcomes.

Balancing impact and financial materiality
Integrating the impact and financial
perspectives can be complex.

Develop a clear framework that systematically evaluates both dimensions and identifies overlaps or trade-offs between them.

Integrating results into reporting and strategy
Effectively using outcomes to inform
reporting and strategic decision-making.

Ensure the assessment is aligned with the organisation’s goals and values, and that findings are translated into actionable insights for decision-makers.

Maintaining a continuous materiality process
Adopting a continuous approach requires ongoing commitment and resources.

Integrate materiality assessment into regular business processes and establish a cross-functional team to oversee the continuous evaluation and updating of material issues.