In order to avoid blind spots or ethnocentric materiality assessment results, it is crucial for companies to engage stakeholders across all levels of the full value chain and the geographies they operate in.
By Alexia Koch, Sustainability Consultant, UK
Have you comprehensively mapped your company’s stakeholders? Have you incorporated the insights of an adequately diverse range of voices in your latest materiality assessment?
The importance of materiality assessments and stakeholder engagement for ESG strategy-setting and reporting is widely acknowledged. Existing guidance on materiality assessments emphasises the need for companies to map their relevant stakeholders and engage with them. Yet as the relevant set of stakeholders can vary so completely from one company to another, there is little appetite among framework- and standard-setters to be more prescriptive on the matter of stakeholder mapping.
In order to avoid blind spots or ethnocentric materiality assessment results, it is crucial for companies to engage stakeholders across all levels of the full value chain and the geographies they operate in.
The quality of a materiality assessment is directly dependent on the diversity of viewpoints it incorporates. Companies must consider perspectives beyond those of their most evident or influential stakeholders. The likelihood and scale of a company’s potential impacts on planet and people can only be assessed if stakeholders such as local community members, unions, suppliers, consumers, civil society/NGOs, government representatives and academics are included as key participants of materiality assessments, complementing the perspectives of more visible stakeholders such as investors.
Materiality assessments also need to engage internal stakeholders that cross-cut all levels and functions across the organisation to ensure the views of board members and upper management are contextualised by the voices of those less frequently consulted. It is equally crucial that the selected stakeholder pool mirror the geographic and ethnic diversity of companies with international value chains.
Without a concerted effort and focus on diverse representation among the stakeholders an organisation engages, materiality assessment results can only paint half a picture.
DNV’s UK Sustainability team has over 20 years’ experience conducting Materiality Assessments and Stakeholder Engagement for clients across a wide range of industries and geographies, company sizes, and levels of maturity in their sustainability journey. Working collaboratively to guide the stakeholder mapping phase strengthens the quality of the data collected in the engagement phase, creating understanding and buy-in across all levels of the value chain.