Vanessa Thompson, Founder and Director of Unravelled, talks about the benefits of using a Materiality Assessment to identify your biggest sustainability risks and opportunities and how to bring your employees, stakeholders and customers on the sustainability journey with you.
With increased awareness around sustainability, and more demand from customers, businesses are now seeing that sustainability is a strategy they can no longer ignore. Sustainability can be complicated and challenging, there is a lot of complex and conflicting information. One of the biggest challenges is knowing where to start.
Author Peter Drucker once said “You can’t manage what you can’t measure.” To be able to set goals and action changes in your business, you need a clear picture of what social and environmental initiatives you are already doing. Start by mapping out or completing a Materiality or Risk Assessment. This helps to identify the most ‘material issues’, and the importance each of these has to your business.
The Materiality Assessment will help to expose any potentially damaging risks you face, and the urgency with which you need to tackle them. Prioritising these issues becomes easier when you have identified what is most important, and the ‘easy wins’ become clearer. The option to get external help at this stage will help give you a clear, unbiased look at these issues, and help identify possible opportunities where you may not.
The assessment is a strategic business tool, and will give you information to inform your strategy, and also advise what you need to report on. When starting the assessment, you will need to cover social, environmental and business values, and conduct interviews with key employees and stakeholders. It is important to consider all areas, as one can often affect the other. Social issues will include things such as the transparency of your supply chain, gender equality and diversity, living wages, staff training, working hours, and codes of conduct. Environmental issues will be things such as waste, pollution, energy and water use, responsible chemical use and packaging. Business values to look at would include your purpose, philanthropy and policies such as corruption and bribery.
Once you have identified your key issues, you can create and share a list of Environmental, Social and Governance (ESG) goals for company-wide implementation. By sharing these goals, you will help your employees engage with your business values, and help increase motivation by driving accountability. ESG values are particularly important to millennial employees.
In a recent survey, more than 70% of respondents said they would more likely work for a company that had a strong environmental agenda.
Communication is key here – speaking with both your employees, stakeholders and the people in your supply chain will give you good insight into what is truly happening, and will encourage them to come on the journey with you. Keeping communication lines open about your sustainability goals with your factories can not only build stronger relationships, but also reveal potential opportunities and cost savings, which you may have not otherwise known about. This can lead to impactful stories you can tell your customers, by being transparent about your relationships with manufacturing and supply chain partners. This will build trust and add value with consumers, and give you an advantage over your competitors.
Your competitors may also be making moves in this space, so it is important to keep an eye on what they are communicating at all times. Completing a Competitor Assessment and mapping out their initiatives and issues can give you an idea of where you are sitting in the market, and where you are falling behind in the eyes of the customer.
Getting started is the hardest part on your sustainability journey, and you need to be able to see the full picture. Completing a Materiality Assessment will help you to see your biggest sustainability risks and opportunities clearly, and by bringing your employees, factories and other stakeholders on the journey with you will help keep you accountable, and increase brand value and trust.
Vanessa Thompson is the Founder and Director of Unravelled, a New Zealand based consultancy, helping businesses understand their options and take action towards
