MATERIALITY ASSESSMENTS
Prioritise the ESG issues that matter most
Prioritise the ESG issues that matter most
A materiality assessment is a formal process for organisations to identify and prioritise the most important environmental, social, and governance (ESG) issues relevant to their operations, stakeholders and ongoing sustainability.
It helps businesses understand which topics have the greatest impact on their business and their stakeholders, allowing them to focus their efforts and resources on the most critical areas.
Building commercial sustainability
Our approach to materiality assessments is based on the premise that excellent commercial outcomes and highly sustainable business practices are not mutually exclusive. We deliver on this premise by helping our clients to coherently communicate their impact to stakeholders, and to leverage the commercial opportunities that genuine sustainability presents.
Holistic and detailed
With an established, risk-based methodology, we generally take a 360° approach (double materiality). Double materiality considers both the effects an organisation has on the world and the potential impact of these factors on its financial performance.
Our well-defined process for materiality assessments delivers a high-resolution picture of the most important ESG topics to your business and your stakeholders
Defining the scope of a materiality assessment begins with establish boundary limits. In addition to directly controllable risks and opportunities (organisational boundaries), we will also identify those that occur throughout your value chain that have the potential to affect your organisation’s ability to operate sustainably (operational boundaries).
In simple terms something is material if it has the potential to influence the decisions of a ‘reasonable investor’.
Fun Fact: Materiality isn't limited to information that immediately impacts current financial statements. It also includes future-oriented risks and opportunities, like anticipated changes in weather patterns, carbon pricing, or new regulations, that could affect a company's strategy, operations, or cash flows.
The identification of a complete list of relevant impact topics is a fundamental component of generating a comprehensive materiality assessment. In the Cool Planet process, topics are categorised, ranked and applied to relevant stakeholder groups for the stakeholder engagement phase.
We apply proven research methodologies to ensure your materiality assessment truly reflects the views of your stakeholders at both qualitative and quantitative levels.
Face-to face and telephone interviews with key external stakeholders are recommended, and online workshops for selected employees are frequently held. With the bulk of stakeholder engagement being executed by online questionnaires, our digital survey-based approach is resource- and cost-efficient, gathering a meaningful data set, facilitating rigorous analysis and modelling.
Cool Planet will apply best practice stakeholder mapping and engagement models (illustrative examples are below), to ensure the right groups are consulted in the most effective and efficient formats and given the appropriate weighting of consideration.
With the data gathering and stakeholder engagement phases complete, the primary component of the project begins: assessing economic, environmental and social risks and opportunities for their likelihood and impact.
Integrating elements of ISO 14001: 2015 (Environmental Management Systems) with GRI standards, our methodology categorises impacts by topic and ranks them in order of priority to your business, with the ultimate expression of the materiality assessment being the materiality matrix.
We will deliver a practical and highly commercial final report that documents the entire materiality process, focusing on findings. While these documents are typically internal strategy pieces, Cool Planet designs materiality assessments as a communications tool that is equally relevant as a driver of change or an outbound brand platform.
As well as discussing approach and methodology, our report unlocks true insights. Stakeholders are given prominence and a commercial lens is applied throughout. The ultimate expression of this project is the materiality matrix, but we build a picture to support its findings throughout our report.
We can support our partners with the development and installation of appropriate systems and processes. To support this, we offer employee training and development, to ensure your organisation is informed and able to direct its own ESG reporting function.
We are also perfectly positioned to take your materiality assessment forward. We can integrate the assessment into your broader strategies and business operations, as well as support SBTs and prepare you for compliance under mandatory climate reporting requirements.
With an established risk-based methodology, based on GRI standards, our materiality assessments are science-led, practical and structured to align with both GRI and AASB S1 and S2 standards, providing you with the most robust framework, delivering the most comprehensive report.
Cool Planet’s audit was thorough and their interaction with our team was both educational and inspiring. We were already doing well at reducing, separating, and managing our waste, however, Cool Planet offered practical recommendations for saving money on disposal costs to improve our bottom line.
Need to know more?
If you have a business problem and need an environmental lens, or you have an environmental issue, needing a commercial lens, we'd love to hear from you.
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