What is an ESG materiality assessment?

Apr 24, 2023 | ESG

A materiality assessment isn’t just a check-the-box exercise – it’s an important tool for shaping your ESG budget and focusing your time and effort.

Some international sustainability frameworks propose more than 30 ESG related topics that a company might choose to disclose information about. Companies are not expected to manage, mitigate, remediate and report on all topics, only those that are ‘material’ to their business.

How does a company determine materiality and therefore which topics it should focus its efforts on?

This is the objective of a materiality assessment. It determines which of your impacts matter most.

Materiality assessments help companies determine which of the topics are significant to their business and therefore, which impacts should be prioritised for management and reporting.

Questions to determine materiality include: How much is the company affected by this topic (outside in)? What impact does the company’s activities have on this topic in our community (inside out).

Companies alone cannot determine their material topics; They must consult all stakeholders to get a true ‘inside out’ perspective on their impacts.

Companies are expected to explain how they determined their material topics to comply with international best practice reporting standards.

I have a quick and easy yet comprehensive process for undertaking materiality assessments according to best practice standards. Ask me how I can help.