Materiality Assessment

The usual steps are to build a long list of topics from standards, peer reports and risk registers, gather views from stakeholders such as investors, employees, customers and communities, score each topic against defined criteria, and then plot or rank the results. Management and the board review the outcome and confirm which topics will be reported and managed. Under double materiality the scoring has two parts, impact and financial effect, and the method, thresholds and evidence are documented so an assurance provider can test them. The assessment is normally refreshed every year or two, or after a major change in the business. It differs from the lenses themselves: financial and double materiality are the tests, and the assessment is the work of applying them. Its outputs are a ranked topic list and the documented reasoning behind it, which assurance providers ask for before they test any figure.

A chemicals producer runs its first assessment. It lists forty topics, surveys two hundred customers, employees and neighbours, and scores each topic for impact and financial effect in workshops with plant managers. Fifteen topics pass the threshold. The sustainability committee approves the list, and the report structure follows it.