How do you identify and prioritize the most relevant and material sustainability topics for your client?

Sustainability can relate to many different aspects of a particular business. For some it means decarbonization, for others it means driving their supply chain to be more sustainable (definition to be determined by them) and on and on. Putting a box around the scope enables both the client and consultant to develop a plan to eat the elephant one bite at a time in a systematic approach. Defining the scope also allows for internal and external metrics to be developed to track progress to the defined goals and communicate that progress to stakeholders.

Definir o escopo de um projeto de sustentabilidade é fundamental para garantir foco e alinhamento estratégico com a visão do cliente. Isso envolve estabelecer objetivos claros, limites e prazos que estejam conectados às expectativas dos principais stakeholders, como investidores, clientes e reguladores. Cada setor e localidade trará desafios específicos, o que exige uma análise cuidadosa para garantir que o projeto não só atenda às necessidades atuais, mas também crie valor a longo prazo. Essa abordagem estratégica maximiza o impacto das iniciativas de sustentabilidade e reforça a credibilidade do cliente no mercado.

Understand Client Needs: Know what sustainability areas matter most to your client's business and stakeholders. Industry Focus: Consider the specific industry of your client to identify relevant sustainability challenges and opportunities. Geographic Location: Take into account where your client operates to address local environmental and social issues.

To identify and prioritize relevant sustainability topics for a client: 1. Stakeholder Engagement: Conduct surveys, interviews, and workshops to understand stakeholder concerns. 2. Materiality Assessment: Analyze the significance of sustainability issues to the business and its stakeholders. 3. Benchmarking: Compare sustainability practices against industry peers and leading companies. 4. Risk Assessment: Evaluate potential environmental, social, and governance risks and opportunities. 5. Regulatory Analysis: Consider legal requirements and industry standards. 6. Strategic Alignment: Align sustainability topics with the client's business goals and values.

Identifying the scope is the first step to developing a client's sustainable development strategy. Involve clients with the goal to better understand their challenges, match corporate aims with sustainability targets, and carry out materiality assessments. Sort topics into lists of priorities based on business alignment, environmental significance, and stakeholder impact. Keep flexible and change with new laws and developments. This targeted as well, flexible strategy ensures an individual significant sustainability plan. #SustainabilityLeadership #StakeholderAlignment #LinkedInTopVoice

A materiality assessment involves evaluating the significance of environmental, social, and governance (ESG) issues to the client and its stakeholders. This process identifies topics that have the potential to impact the organization's performance and influence stakeholder perceptions. Conducting a materiality assessment often includes engaging with key stakeholders, such as customers, employees, investors, and community members. By involving these perspectives, the assessment captures a holistic view of the issues that matter most to both the organization and its broader ecosystem.

A materiality assessment is crucial for aligning sustainability efforts with stakeholder expectations. In my experience, conducting such assessments for a multinational corporation revealed that while environmental impact was a top concern globally, local communities prioritized economic development. This disparity highlighted the need for tailored sustainability strategies that address both global and local priorities. By mapping these topics on a matrix, we could effectively communicate the diverse needs to the board, ensuring a balanced approach to sustainability.

As sustainability advisors, it's essential to prioritize ESG topics using a double materiality lens, a key principle in the European Sustainability Reporting Standards (ESRS). This means considering both financial materiality—how ESG issues impact the company—and impact materiality—how the company affects the environment and society. Stakeholder engagement plays a crucial role in this process. By engaging with employees, clients, suppliers, and local communities, we identify key issues that align with significant sustainability impacts. This approach ensures our ESG efforts are both relevant and impactful.

A avaliação de materialidade é uma ferramenta poderosa para identificar os temas de sustentabilidade mais relevantes para seu cliente e stakeholders. Ao mapear tópicos com base em sua importância e impacto, você prioriza questões estratégicas que orientam decisões e ações. Esse processo, que envolve feedback de diversas fontes, permite não apenas descobrir gaps e oportunidades, mas também alinhar a estratégia de sustentabilidade com as expectativas do mercado. Com isso, você garante que o cliente foque nos temas que realmente impulsionam valor e reputação a longo prazo.

We don't just focus on trendy topics. We prioritize issues where your client has the biggest impact (e.g., water use in a beverage company) and those that significantly influence their stakeholders (e.g., labor practices for a clothing retailer).

When working in sustainability, a framework is needed to provide context. The Global Reporting Initiative (GRI) provides a robust framework for understanding and implementing sustainability practices within organizations. It offers guidelines for reporting environmental, social, and economic impacts, allowing companies to communicate their sustainability efforts to stakeholders. By adhering to GRI standards, organizations can systematically measure, manage, and report their sustainability performance. As I navigate through my sustainability journey, utilising the GRI framework equips me with the tools to assess and enhance sustainability strategies, ultimately contributing to better business practices.

Each framework serves unique purposes, aiding organizations in sustainable practices based on priorities and stakeholder expectations. Ranking frameworks on their Importance and widespread adoption on a global scale.: UN SDGs: Globally significant, offering a comprehensive approach to sustainability. GRI: Transparent and inclusive, covering economic, environmental, and social aspects. TCFD: Crucial for assessing and reporting climate-related risks, enhancing resilience. SASB: Industry-specific standards for disclosing material sustainability information IIRC: Promotes integrated reporting but adoption is slower.

When tackling sustainability, a framework is crucial for offering perspective. Businesses may use the Global Reporting Initiative's (GRI) robust framework to learn about and implement sustainable activities. This standardizes the reporting of economic, social, and environmental effects and offers a platform for enterprises to discuss their sustainability activities with appropriate stakeholders. By adhering to GRI standards, organizations may report on their sustainability performance in a systematic manner. As I go through my sustainability journey, I may utilize the GRI framework to assess and enhance sustainability approaches, which ultimately leads to better business practices.

Review relevant sustainability standards, frameworks, and guidelines, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), and United Nations Sustainable Development Goals (SDGs). Identify sustainability topics that are commonly disclosed or considered material within the client's industry sector or geographic region.

Leveraging frameworks like GRI or SASB standardize reporting and enhance the credibility and comparability of sustainability efforts across industries. For instance, in my experience with a manufacturing client, adopting the GRI framework facilitated clearer communication with stakeholders and identified overlooked areas such as supply chain emissions. This holistic approach ensures that sustainability initiatives are aligned with global standards and tailored to the specific needs and goals of the client, fostering more effective and impactful outcomes.

Materiality process for sustainability delivers the most value when it is cyclical, and run as a dialogue more than a box checking exercise. Think of this as a conversation you facilitate internally in a company. For example, different departments might actually open new lines of communication and even adjust, align, and reprioritize depending on the results. To achieve this, be sure to report back your draft materiality findings as early as possible to the stakeholders, and actively invite additions, questions, and suggestions. Because internal and external factors are constantly shifting, and topics are so interconnected, making materiality a dialogue can make even the process of creating it a higher strategic value.

Deve-se propor uma metodologia baseada no PLAN–DO–CHECK–ACT (PDCA) e a avaliação dos resultados e ajustes devem ser realizados periodicamente.

Regularly reviewing and updating sustainability topics is crucial because the landscape of sustainability is dynamic and influenced by many factors. For instance, I once worked with a client in the manufacturing sector who initially prioritized energy efficiency. However, as new regulations emerged and stakeholder expectations evolved, we had to shift focus towards circular economy practices. This adaptability not only kept their sustainability agenda relevant but also aligned with emerging industry standards and stakeholder demands. Monitoring these changes ensures that your client's sustainability strategy remains proactive and impactful.

Manter a identificação e priorização de temas de sustentabilidade atualizadas é essencial para acompanhar as mudanças do mercado. Revisões regulares permitem que seu cliente se adapte a novas regulamentações, tecnologias e expectativas dos stakeholders, garantindo que os temas permaneçam estratégicos e relevantes. Monitorar o desempenho e o progresso, enquanto se antecipa a tendências emergentes, fortalece a capacidade de resposta do negócio frente a riscos e oportunidades. Esse ciclo contínuo de ajuste assegura que a agenda de sustentabilidade esteja sempre alinhada ao contexto atual e futuro do mercado.

Below are few of the risks which didn't seem so severe till few years back: - Environmental: 1. Natural disasters like flooding 2. Stricter emission regulations 3. Solid waste management - Social: 1. Talent shortages, especially for the newer skills 2. Employee satisfaction & therefore retention 3. Brand & Reputational risks, with so many brand engagement channels - Governance: 1. Investor interest in ESG profiling for financing decisions 2. Mandatory regulatory disclosures 3. Cybersecurity threats Thus, it's critical to review and update the materiality assessment regularly, so that relevant business continuity programs can be designed while keeping the stakeholders informed.

In a world inundated with ESG regulations (CSRD/ESRS, IFRS), it's crucial not to lose sight of materiality's true purpose amid compliance. Beyond the specifics of materiality types, there's a fundamental interconnectedness in assessing ESG factors for risk evaluation. From my experience, key steps include conducting peer and sectoral studies, benchmarking, and sensitizing leadership. Identifying stakeholders is critical, with some organizations even assigning weightages to different groups. After compiling a list of issues, the next step is gathering feedback from stakeholders. Prioritizing these issues based on their potential impact on the business, stakeholder value and interests, and alignment with strategic goals form the final steps.

Chasing every sustainability trend can dilute focus and resources. Sometimes, the most impactful strategy is to prioritise fewer, high-stakes sustainability issues that align closely with your client’s core business and market position, rather than trying to address every possible concern. This targeted approach can drive deeper, more meaningful change and avoid the risk of spreading efforts too thin.

In my experience, identifying and prioritizing sustainability topics for clients often begins with understanding their unique industry challenges. For instance, while working with a manufacturing client, we discovered that water usage was a critical issue. By conducting a thorough materiality assessment, we identified water conservation as a top priority. Implementing a framework like the GRI Standards helped us track progress and make informed decisions. Regular reviews ensured that our strategies remained relevant and impactful, leading to a 30% reduction in water consumption over three years.

Um exemplo seria uma empresa de tecnologia que, ao definir seus temas de sustentabilidade, inicialmente prioriza a redução de emissões de carbono e o uso eficiente de energia. Com o tempo, devido ao surgimento de novas regulamentações de privacidade de dados e à crescente demanda dos clientes por ética digital, a empresa ajusta suas prioridades. Ao revisar sua materialidade regularmente, a empresa inclui a governança de dados e a transparência como temas críticos, garantindo que suas iniciativas de sustentabilidade reflitam as mudanças no mercado e nas expectativas dos stakeholders.

A few not-so-common factors for materiality analysis are: Shifting Time Horizons: Move beyond short-term financial risks and consider the long-term impacts of environmental and social trends on your client's business. Future-Proofing Strategies: Develop future scenarios that explore potential disruptions like climate change, resource scarcity, or social unrest. These scenarios can help identify sustainability topics that might not be material today but could become critical in the future. Emerging Technologies: Explore how emerging technologies like artificial intelligence, circular economy solutions, or renewable energy sources could disrupt your client's industry. Analyze the potential sustainability implications of these disruptions.