Mistakes to Avoid When Conducting Your Materiality Assessment
Conducting a materiality assessment can be a time-intensive process with many steps. Each of these steps comes with its own challenges and pitfalls. To make sure your materiality assessment truly provides the relevant insights for your ESG strategy and sustainability report, here are the most crucial mistakes to avoid.
1. Not involving external stakeholders
When engaging with stakeholders about what material topics they think are important, it is crucial to involve both internal and external stakeholders. Even though internal stakeholders are easier to reach, external stakeholders offer a new perspective on your organization’s performance. They have a more holistic view of your organization as part of a bigger ecosystem. Combining the insights of internal stakeholders with those of external stakeholders will grant you the most complete overview of what material topics are the most important for the future of your organization.
Of course, obtaining survey replies or scheduling a meeting with external stakeholders is more challenging as their priorities can be different from yours. Often it means that it takes quite some messages and reminders to capture their insights. This not only takes up valuable time from your project team but also makes it difficult to track who reached out to what stakeholder. For this reason, it pays off to work with a solution or software that automatically sends reminders to stakeholders, and tracks who has been contacted when. This will save your project team time, make the process transparent for auditing purposes, and – most importantly – avoid bothering your external stakeholders more than needed.
2. Only thinking of surveys and no other engagement methods
When working on a materiality assessment, surveys are seemingly the default option for engaging with stakeholders. It is indeed the most convenient way to reach out to many stakeholders with less time and effort on your side. You basically create one well-thought-out survey and send it to hundreds of stakeholders at once. However, surveys only capture quantitative data and do not allow you to dig deeper into the reasoning of your stakeholders. A one-on-one interview, for example, does allow for understanding why a stakeholder has certain opinions since you can ask more questions whenever an interesting point is brought up.
Moreover, engaging your stakeholders is an important part of your materiality assessment, but that does not mean that you can only use the engagements that are set up during the assessment process. Throughout the year, you have conversations with clients, negotiations with contractors, performance reviews with employees and many other ways to hear what matters to your stakeholders. These valuable insights are worth capturing as well, so you have a diversified set of perspectives to work with.
3. Not capturing all their reasoning and data
Assessing materiality comes with a lot of research and documentation. When going through the process, it is highly advised to set up a system to store and manage all these documents and data. For example, defining your impacts, risks and opportunities comes with thorough research into scientific articles, industry reports, and engaging with the relevant experts. Your financial materiality assessment should be conducted with supporting documents such as energy bills and risk assessments. Meetings with stakeholders result in meeting notes and summaries.
All these documents and data are valuable input and provide the paper trace for your final set of material topics. In case of an external assurance – which is part of the CSRD requirements – your organization needs to be able to show the sources on which the materiality is based. When deciding on a system to collect these sources, consider finding a solution that not only stores these documents but also links them back to the correct stakeholder and allows for a variety of files to be added. Whether it be meeting recordings, survey results, emails, attendance files, training material or confidential documents, they should be managed in an efficient, safe and traceable way.
Mistakes like those mentioned above can cost your organization time and could increase the risk of not obtaining external assurance for your materiality assessment. Fortunately, more and more of these mistakes can be avoided by using the right software to support your materiality assessment. Software like our Double Materiality Assessment Solution so you can focus on creating a more positive impact for your organization and the ecosystem you operate in. Find out how our solution can support you by booking a demo.