At Schellman, we're committed to supporting your ESG (Environmental, Social, and Governance) efforts. Today, let's delve into one of our transformative assessment services – ESG Materiality.
Our service offerings are categorized into three key areas: assessments, assurance, and certification. Today's focus is on ESG Materiality, a service that empowers companies to prioritize ESG issues based on their significance to the company and stakeholders alike.
Understanding ESG materiality involves first defining the term "stakeholders," which encompasses all parties affected or interested in a company's actions. These stakeholders, including investors, customers, and employees, play a crucial role in determining the materiality of ESG issues.
To measure materiality effectively, we assess the level of concern these stakeholders have about issues that may be impacted by the company. To balance this concern with the company's interests, we then evaluate the impact of ESG issues on your bottom line, which includes considerations like brand and reputation, organizational efficiency, regulatory preparedness, employee attraction and retention, and the ability to secure capital.
Systematically measuring the level of concern among stakeholder groups and evaluating its impact on those five intangible value drivers allows us to create a matrix. This matrix, often found at the beginning of an ESG report, demonstrates a company's commitment to a consultative approach in identifying and prioritizing issues.
Major companies commonly undergo this materiality assessment process, utilizing various frameworks. One such approach involves considering the industry-specific impacts of ESG issues outlined by the Sustainability Accounting Standards Board (SASB). Each industry has its own SASB framework, providing a foundation for refining and tailoring the list of issues through proactive consultation with key stakeholders.
Embarking on an ESG materiality assessment is a pivotal first step for companies navigating the ESG landscape. Schellman collaborates with organizations to finalize an ESG materiality matrix, enhancing the credibility of ESG reports. This matrix assures stakeholders that their concerns have been considered in prioritizing ESG issues.
If you're exploring ESG initiatives and want to learn more about the transformative power of ESG Materiality, reach out to us through the Contact Us form or directly contact me. We're here to guide you through the journey of elevating your ESG efforts and creating a meaningful impact.