Always focus on double Materiality to document your priorities.
Your ESG initiatives should be reviewed annually.
Every company should have a process by which they conduct ESG risk and materiality assessments as a whole and against each of the 19 risk areas that fall into the ESG spectrum. These risks are changing at an accelerated pace thanks to changes in the regulatory environment and the consumer and business sentiment around ESG risks.
Learn more by reading some of our client stories.
Conducting a materiality assessment is a foundation element of any ESG and sustainability programme. The materiality assessment must be an annual exercise to truly identify a changing landscape.
Most companies conduct a risk assessment and pass this off as a materiality assessment. However, a materiality assessment for ESG and sustainability is a little different because of the concept of double materiality. It should be a separate exercise that looks at both sides of the ESG and sustainability spectrum.
Some risk assessments that purport to cover materiality in ESG fail to address the double materiality and especially the piece that considers the impact that the environment might have on your business.
Results
A hybrid materiality & risk assessment of ESG risks spread across multiple countries and businesses.
A system to conduct annual materiality assessments with clear ownership and accountability.
Key increase in understanding of ESG and sustainability and what it involves in a changing environment.
Situation or challenge
Our client had a risk assessment programme in place for years but had never considered overall ESG and sustainability risks. They wanted to make sure their risk system followed best practices and included all emerging risk areas covered by ESG. There was also a lack of understanding of the company definition on ESG and a lack of understanding on the impact of ESG risks. The company was not considering double materiality.
Solution
Speeki applied Speeki Focus™ to conduct a risk and materiality assessment exercise focused on ESG and sustainability risks. We reviewed their current risk identification system, including their knowledge and coverage of ESG risk areas. Training was provided on these key areas and an increase of awareness on these topics. The risk assessment was done by looking at each area and assessing it with teams to workshop potential areas and exposure. This was completed with double materiality in mind and also focused on whether these were truly material according to a stated way to measure impact.
Results
The results showed clearly that the company had a lot to do to get to ESG and sustainability risks into their existing risk assessment process.
The major issue was a lack of definition and understanding on the ESG and sustainability risk areas and an under appreciation for the impact of ESG risk failures on the business and the impact of the business on the planet.
The aim of making the materiality assessment system more robust, more relevant, more understood and more efficient was well achieved.
