What it is
Evaluation of material environmental, social, and economic risks that your company might face based on the business model, supply chain, and external events.
How it works
Internal and selected external stakeholders are surveyed to gain broad perspective on risks and probabilities so that the organization can incorporate the material impacts into strategies and align initiatives to address them.
Why you use it
You want to improve the resiliency of your organization, increase the impact of your sustainability initiative, or gain insight to inform long-term strategies.
What to expect
There are varying approaches to completing a materiality assessment, but no commonly agreed upon standard. Depending on how you want to use the assessment, the process can align with GRI, ISO, or other defined methods that provide more structure and definition. In all cases, stakeholders are selected and then engaged, typically using a survey or short interviews, to get their input into what risks are material to your business. That input is analyzed and plotted against a set of matrices, which supports prioritization of those material impacts. The assessment can target only one dimension (e.g., social or environmental impacts) or consider impacts across multiple dimensions.