How do you adapt your sustainability reporting to changing issues?

Materiality assessments are a vital foundation for robust sustainability reporting. They help organizations focus on what truly matters to their stakeholders and their own long-term success. By conducting these assessments, companies can tailor their reporting to address the most significant economic, environmental, and social issues, enhancing transparency and credibility in the process.

There are three schools of thought when it comes to materiality. “Materiality…what’s that?” “Materiality…that thing where I get all my suppliers in a room and confuse them.” “Materiality? Oh, you mean risk management.” For the uninitiated, materiality is an exercise sustainability professionals often use to gauge critical issues impacting a business. It’s different than a SWOT analysis because it gathers insights from both internal and external stakeholders, as well as factors from changes in a given industry or market. Ultimately, it helps identify for a business what its most material issues are. Hence, materiality.

Creating a materiality matrix involves visually plotting the identified sustainability issues based on their significance to company and stakeholders. Here's how to do it: 1. List your Issues by listing all the sustainability issues 2. Significance:Assess each issue's significance by considering factors 3. Rank the issues based on their importance 4. Create a two-dimensional matrix with significance on one axis (e.g.,vertical) and stakeholder interest or influence on the other axis 5. Place each sustainability issue on the matrix 6. The matrix will provide a visual representation of which issues are most material(top-right quadrant) and which are less material(bottom-left quadrant) 7. Emphasize the issues in the top-right quadrant 8. Repeat

Selecting the right reporting framework is a critical decision in the sustainability reporting process. It's akin to choosing the right language to communicate with your stakeholders effectively. Picking the framework that aligns with your material issues, stakeholder expectations, and industry context ensures that your reporting will be both meaningful and credible. It's a pivotal step in making your sustainability reporting a powerful tool for transparency and accountability.

While choosing the reporting framework, it is very important to be mindful of the upcoming regulations that impact your organisation, as per the geography and/or industry you are in. This would help ensure the organization's efforts are in sync with upcoming mandates.

You are not the first and you are not the last - look at the industry reports and what competitors and market leaders are doing. Conduct an analysis of international standards, the requirements of your local regulators, and exchanges, and evaluate your resources - what you can do efficiently. Based on these priorities, select the framework that covers the maximum number of points. It is better to gradually and efficiently disclose information in accordance with different standards than to cover everything at once and not be able to cope with the volume. This is a long game and it is important to put right processes in place at the very beginning.

Selecting a reporting framework is crucial. I've found that aligning it with our sustainability goals and stakeholder expectations is key. Options like GRI, SASB, IIRC, and TCFD offer different scopes and focus. Choosing the one that matches our material issues and stakeholder needs is essential for a credible and consistent report.

Here’s how this normally goes. A company realizes it’s time to review material issues. They have to produce their sustainability report and without materiality it's not credible. The company will take its list of issues (often the same one they’ve been using for years), send out a survey to staff (even those with little understanding on the issues) and bring together suppliers (regardless of only tangentially understanding the business). Once this is done, they plug in findings and spit out a new map. What’s wrong? Firstly, these exercises don't account for the latest issues facing an organization. Second, it’s better to have educated viewpoints of 15 stakeholders than wild opinions of 300. Lastly, the whole thing lacks credibility.

It is advised that materiality assessment is updated as often as possible. Through this, you have information on issues that of relevant to stakeholders and you can adapt your reporting to cover those issues. In this case, you report on it if you are already doing something or you make a commitment and set targets to implement.

Updating your indicators and targets is akin to fine-tuning your compass on a journey. As your material issues evolve and reporting frameworks change, your indicators and targets must adjust accordingly. This ensures your sustainability reporting remains focused, credible, and relevant. It's an essential part of your commitment to transparency and continuous improvement in the complex landscape of sustainability.

Engaging stakeholders in your sustainability reporting is like building a bridge of trust and accountability. It's crucial to maintain an open dialogue, understand diverse viewpoints, and address concerns. By involving stakeholders in the process, you not only enhance transparency but also ensure your sustainability reporting truly reflects the collective values and aspirations of your community and organization.

For that company from the third school of thought, though, materiality is vastly different. Instead of looking at materiality as a ticking-boxes exercise, these companies realize the strategic value of the process from a risk management, operational, and programmatic point of view. They have evolved out of looking at materiality as just a sustainability practice. Sure, sustainability still forms part of the process. Now, though, savvy companies understand issues like energy efficiency, human capital development, and stakeholder engagement are really operational and central to how a business functions.

Incorporate stakeholder engagement as a means to explore collaboration opportunities, such as joint sustainability initiatives, and to enhance your sustainability efforts. Integrate stakeholder feedback and insights into your sustainability reports, showcasing how their input shapes your sustainability strategy. Maintain a commitment to continuous improvement, adapting your engagement approach based on feedback and evolving stakeholder expectations. Most importantly, foster accountability within your organization by actively addressing stakeholder concerns delivering on sustainability commitments, and transparently reporting the actions taken in response to stakeholder feedback.

Engaging stakeholders throughout the reporting process is fundamental. We actively communicate with customers, employees, investors, and others to understand their perspectives and expectations. It's essential to disclose how we address their concerns in our reports, showcasing our commitment to creating value for them and society.

Adapting your reporting format is a smart move. It's all about making your sustainability information easily digestible and relatable to your audience. Whether it's a detailed report for stakeholders or a concise summary for customers, the format should resonate with the intended readers and deliver the message effectively. It's like tailoring a suit – one size doesn't fit all, and the right fit makes all the difference.

Articulating cogent sustainability narratives is crucial for showcasing an organization's allegiance to carbon neutrality and adaptive methodologies. Leveraging multi-modal communication. A granular, digitized approach resonates with stakeholders immersed in tech-forward paradigms, while traditional print may cater to those rooted in conventional ESG disclosure frameworks. Embracing a poly-modal communication strategy, ensures broad-spectrum accessibility based on stakeholder carbon literacy and feedback, organizations can amplify their sustainability discourse, thereby positioning themselves as vanguards in climate mitigation and adaptation strategies.

I've spent nearly 3 years discussing the ideal report for a broad audience, aiming to create something impactful.Our report has evolved to minimize dense text and tedious tables,preserving them as appendices. The report features numerous infographics, in-depth analyses,and narratives about sustainable initiatives through the lens of our production staff.We engage and capture the attention of as many people as possible, serving as a conduit for further development.We've designed a human-centered report that keeps readers scrolling. We've also developed simplified versions for mobile and web, along with a concise 15-page summary with cross-references and QR for easy access to the full report online. Next important task-communication campaign.

Adapting the reporting format for the audience and purpose is a modern approach. For instance, we might use different formats like online, print, or interactive reports based on stakeholders' preferences. Ensuring the format is user-friendly and engaging enhances the overall impact. This approach allows us to cater to different audiences effectively, showcasing our commitment to transparency and engagement.

I've just finished an engagement with a company holding this third school of thought. A few key differences stood out. -They understood doing materiality in-house was the wrong answer. Not only would it take credibility, but they knew they lacked the expertise to do it the right way. -The process was led by the executives, rather than managers or an ad hoc committee. This signalled to all the importance placed on materiality as a strategic imperative to the business. It also made the process of getting stakeholder opinions much easier. -Materiality did not equate to just sustainability. Leaders understood that while sustainability was the undercurrent of the exercise, there were many tangential benefits of engaging in materiality.