WEBINAR: “How to Create a Robust and Credible Materiality Analysis?” · How to Create a Robust...
Transcript of WEBINAR: “How to Create a Robust and Credible Materiality Analysis?” · How to Create a Robust...
WEBINAR: “How to Create a Robust and Credible Materiality Analysis?”
10 April 2014, 15:00 -16:00 CET
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Webinar Objectives
To provide first hand information on:
- How to start a materiality analysis process
- What are main challenges to anticipate
- What are opportunities to grab
- What could be tricks to make it all work
Agenda Time Agenda point Speaker
10 min 1. Welcome and Introduction Aron Horvath Project manager, CSR Europe
15 min 2. How to Create a Robust and Credible Materiality Analysis framework? – the AA1000 experience
David Pritchett Head of Europe, AccountAbility
20 min 3. What are main challenges, opportunities and tricks in materiality analysis? - view from the practice
Rebecca Wilkinson CR Report Manager, State Street Cora Olsen ESG Data manager Global TBL Management, Novo Nordisk
15 min Discussion Round, Q&A and closing Aron Horvath Project manager, CSR Europe
6
CSR Europe`s flagship initiative, Enterprise
2020 is the only business-driven initiative
supporting the EU`s CSR Strategy
Materiality Analysis: Key Starting Point of True Value Creation for Future Market Value
Virtuous cycle of an integrated approach
2013 marks the convergence of guidelines and legislation on fostering and mainstreaming more integrated thinking and reporting
True market value of a company is expressed in both financial and non-financial performance
Management
Performance & Reporting
Materiality Analysis / due diligence on
risks & opportunities
Strategy
Re-evaluation & Stakeholder Engagement
Scaling up solutions
Generic Materiality Analysis Process
Stakeholder expectations
2) Capturing stakeholder expectations
A) Stakeholder mapping
B) Issue identification
First draft of matrix by company management
3) Management agreement on first
draft matrix
C) Internal issue prioritization
D) Materiality matrix preparation
External validation
4) Check with key stakeholders
E) Stakeholder dialogue
5) M
ateriality m
atrix &
use
of it
1)
Pu
rpo
se a
nd
Sco
pe
of
Mat
eri
alit
y A
sse
ssm
en
t
1) Define purpose (informing sustainability strategy or reporting) and scope (local, regional, group level)
2) Capture the expectations of a well-defined group of stakeholders through stakeholder consultation
3) Boil down issues identified into a draft materiality matrix or other 4) Validate it through preferably external stakeholder dialogues 5) Update matrix or other with validated material issues
2. How to Create a Robust and Credible Materiality Analysis framework? David Pritchett Head of Europe, AccountAbility
Dubai London New York Riyadh Zurich
Create a Robust and Credible
Materiality Analysis Framework
April 2014
Leading Actors
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GRI: 4th generation of
Sustainability Reporting
Guidelines, “G4”
IIRC: Consultation draft on the
Integrated Reporting Framework
SASB: Industry-based materiality
standards
GISR: Global sustainability
ratings standard
Public policy initiatives:
European Commission
Stock exchanges / listing
standards: Sustainable Stock
Exchange Initiative
Recent AccountAbility research questions
12
How engaged is your
organization in the following
global reporting and non-
financial materiality
initiatives?
How engaged are leaders
from the following levels at
your organization with non-
financial material issues?
AccountAbility’s Pioneering Materiality Framework
13
AccountAbility has worked in the area of Materiality since its inception in 1995, doing in depth analysis
and extensive research on the topic and creating the Materiality Framework below helping many
companies better understand and successfully integrate their ESG issues into their business strategy and
performance:
Source: The Materiality Report: Aligning Strategy,
Performance, and Reporting, AccountAbility, 2006.
AccountAbility’s Materiality Approach - and some questions
14
Plan •How do we ensure we are engaging with a fair and representative selection of stakeholders?
•How do we effectively manage the expectations from stakeholders of what will be delivered
during the engagement process?
•How do we integrate existing processes and meet the needs of different business units?
Identify
Prioritize
Review
Embed
•How do we decide on the granularity or time horizons of the issues?
•What sources should we best use to identify the material issues?
•What internal and external criteria should we use to determine material issues?
•What thresholds should we set in order to generate valuable results?
•Who should be involved in the review process, and how often does the whole determination
approach need to be reviewed?
•How do we manage conflicting internal and external views?
•How do we effectively align and integrate materiality determination into our existing core
business and decision-making processes?
•What is the value of obtaining external assurance over the process?
AccountAbility’s approach to materiality discovers and validates issues that are most relevant to the business,
important to internal and external stakeholders, and that the company can have the greatest impact on. Our
tested methodology addresses the following questions:
AccountAbility
Standards – we provide
the secretariat for the
AA1000 AccountAbility
Principles Standard,
AA1000 Assurance
Standard & AA1000
Stakeholder
Engagement Standard
Redefining
Materiality II: Why it
Matters, Who’s
Involved, and What It
Means for Corporate
Leaders and Boards
describes the
landscape of various
global materiality
initiatives and provides
a framework for
corporate leaders and
boards to enhance the
definition and
management of non-
financial materiality.
Critical Friends
examines the
experience of
businesses convening
stakeholder panels
made up of external
experts or stakeholder
representatives, to help
strengthen their
strategy, performance
and accountability in
relation to sustainability.
The Stakeholder
Engagement Manual
Volume I and II – The
Practitioners'
Handbook on
Stakeholder
Engagement forms a
best practice guide to
stakeholder engagement
developed in
collaboration with UNEP,
providing guidance to
corporate and non-
corporate users on how
to practice effective
stakeholder engagement.
Our Thought Leadership
The Materiality Report:
Aligning Strategy,
Performance and
Reporting explores the
concept of materiality, reviews how various
companies have tackled
it and proposes a
Materiality Framework
that everyone can use to
inform a CR report.
David Pritchett
Senior Manager, Head of Europe
Tel. +41 79 366 9582 www.accountability.org
Contact
LIMITED ACCESS
GLOBAL MARKETING
State Street Corporation:
Materiality Approach
Rebecca Wilkinson
CR Report Manager
April 10, 2014
www.statestreet.com
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
Materiality Agenda
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About Us
CR Reporting Trends
Our Approach
Roadmap
Lessons Learned
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
State Street Corporation Highlights
20
• $27.4 trillion in assets under custody and administration
• $2.3 trillion in assets under management
• Revenue of $9.88 billion in full-year 2013
• Strong securities lending program, with more than $2.95 trillion in average lendable assets as of
December 31, 2013
• Founded in 1792
• Ticker Symbol: STT
• More than 29,000 employees
• Offices in 29 countries serving more than 100 markets
Profile
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
CR Reporting Trends Evolution of CR Reporting
21
Past Present Future
Summary Helping raise awareness
internally and externally
for the positive work a
company is undertaking to
benefit society at large
Focusing on a few key
issues where the
company can have
the biggest positive
impact
Linking performance on
CSR issues to business
performance—potentially
producing an integrated
financial/ non-financial
report
Content • Narratives
• Pictures
• Material issue
focus
• KPIs
• Sustainability context
and performance
Process • Anecdotes
• Ad hoc
• Stakeholder
inclusion
• Assurance
verification
• Advisory panel
• Consultancy expertise
Structure • Dis-integrated • Multi comms/
engagement
channels
• Integrated reporting
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
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Rise of ESG Disclosure
Source: Business for Social Responsibility
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
23
Step 1: Landscape Assessment Key Comparisons
• A landscape assessment was conducted through which a
select group of peers and competitors were examined as a
benchmarking exercise
• Companies assessed include:
o Citigroup, Barclays, Credit Suisse, Citigroup, Westpac,
Northern Trust, BNY Mellon, Mizuho
• Economic Value Generated and Wealth
and Income Generation in Society: we
belong to a group of companies that
gives significant value to the core
business-related topics within CR
considerations, and thus demonstrate an
integrated approach
• Environment: we put more emphasis on
Impacts from Business Travel than peers
and competitors, which seems an
opportunity for positive differentiation
• Social: Employee Incentives and
Compensation highly ranked, Gender
Compensation Equality receives
unusually high emphasis, Public Policy is
also ranked notably high, Responsible
Marketing is also emphasized rather
strongly, Human Rights Risk
Management higher than Human Rights
Policy and Training, this is reversed in
our case
Our Approach Materiality
Step 2: Materiality Workshop
• A series of cross-regional workshops and interviews were
scheduled for conducting a materiality assessment
• In preparation a comprehensive list of sustainability topics to
be used was generated that are highly relevant to State Street
and its value chain
• Topics were generated by reporting standards such as: GRI
G4 reporting framework and Financial Sector Supplement,
SASB (Sustainability Accounting Standards Board) topics, and
ISO 26000 (guidance social responsibility) topics
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
Our Approach
Past (GRI B+) Present (G4) Future (Standardized)
• Internal materiality
assessment
• Comprehensive materiality
assessment
• Formalize a stakeholder group
• Disclosure focused on
reporting year initiatives
• Disclosure on progress of
sustainability issues
• Demonstrate impact on a
sustainability issue –
transferable to stakeholders
• Reporting based on
international standards
• Report focused on materiality
issues facing our company
• Report on material issues and
how they address global ESG
trends
• Content posted on a
sustainability website
• Content integrated into
company website – still
standalone
• Increased integration in
company communications to
stakeholders
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CR Report
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
Roadmap Materiality Informs CR Strategy
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• A gap analysis of the material subjects assessed against current CR programs and the latest GRI CR
report at State Street, in alignment with the GRI G4 guidelines;
• An assessment of current CR management systems and processes, considering newly identified material
subjects;
• Suggestions for improving the content of State Street’s data and information about its CR programs;
• Identification of gaps in current data collection methodologies that will hinder the quality and/or timeliness
of data collection regarding material subjects;
• Prioritization of requirements for management systems, processes, and policies for material subjects;
• Recommendations for how material subjects can be better communicated internally and externally;
• Evaluation of material subjects against international trends and important issues (e.g. Scope 3 reporting,
supply chain sustainability, integrated reporting, external assurance such as AA1000).
LIMITED ACCESS
GLOBAL MARKETING
CORPORATE CITIZENSHIP
Lessons Learned Challenges and Recommendations
26
• Consult more stakeholders for the external verification (difficult due to availability issues)
• Do materiality analysis in August, September – before report data collection and drafting.
• Have a goal in mind for reporting right from the start of materiality analysis (e.g. whether to use G4
or not)
• Short deadline
• Parallel work on CR report and materiality analysis rather than materiality analysis preceding
collection of internal performance data and drafting CR report
• Translated materiality guidelines into practical steps suited to our company
• Provided outside perspective and helped participants understand the process
• Productive division roles:
• Provided balanced guidance, process and moderation
• Guided our approach to make informed decisions
Benefits of an External Partner
Sustainserv’s support was based on 13-years experience helping companies design and implement
sustainability strategies and having produced over 100 GRI reports. Sustainserv is a GRI Certified
Training Partner in Switzerland.
4. View from the practice: Novo Nordisk Cora Olsen ESG Data manager Global TBL Management, Novo Nordisk
Integrated strategic management A solid governance structure is in place
Stakeholders
Governance
Aspirations & goals
Integrated thinking in
business processes
Performance
- Articles of Association
- Novo Nordisk Way
- Policies and strategies
- Boards and Committee
- Annual strategy review by the Board of Directors
- Strategic long-term targets and 2020 aspirations
- Specific short-term targets
- Trend spotting
- Stakeholder engagement
- Partnerships
- Balanced Scorecard
- Personal performance goals
- Long-term incentive programme
- Quarterly management reporting
- Annual reporting
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Evidence of interest
Evidence of financial impact
Evidence of reputational impact
Forward looking adjustment
1. Financial disclosures
6. Revenue and costs
9. Reputation 10. High/systematic impact with low probability
2. Legal drivers 7. Assets and liabilities
11. Externality
3. Industry norms 8. Risk profile
4. Stakeholder concerns
5. Innovation opportunity
Material issues – determining relevance
31
Discussion round, Q&A
Important note:
• To ask a question, please use the raise hand function or chat function or email Aron Horvath ([email protected])
• You will be called out and un-muted if you wish to take the floor.
European Stakeholder Consultations
• A proven methodology to receive constructive feedback and provide follow-up to stakeholders
• Full service from conceptualizing through moderating the session to following up with stakeholders 6 months after
CSR Europe helps you engage with stakeholders in your materiality analysis process through:
Valuing & Improving
Sustainability Management
series
Corporate Learning Network:
Maturity & Integration of Sustainability Management
(MIA)
Webinars:
1. Materiality in April and September
2. Tactics to build the business case
in June and November
“Got the Value?”
Conference & report
Learning network: Valuing & Improving Sustainability Management - answering challenges
CEOs: “I need numbers,
objectives and targets”
CFOs: “Nice, but why does it matter for our business?”
CEOs: “We cannot do everything, tell me what
really matters!”
Corporate Learning Network:
Maturity & Integration of Sustainability Management
Hands-on feedback and benchmark on maturity
& integration on management
Participate
Benchmark
Share practices, ideas
Webinars:
1. Materiality 2. Tactics to build the
business case
Information from peers and influential
organizations to answer practical questions
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“Got the Value?”
Conference & report
Join & bring colleagues to get first hand experience on the European debate
about “the Value”
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Sponsor
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Spread the word
Why and How to Join?
Kick off conference: 8 May Interviews & gap analysis: May/Aug 2014 Learning network workshop: September 2014
Webinars in April, June, September, November 2014
“Got the Value?” conference and report published - February 2015
“Get Your Company Ready for a New Era of European Non-Financial Reporting and Integrated Performance”
Conference, 8 May, Brussels Purpose • Gain insight to global and European context of non-financial reporting • Get inspired of how better sustainability management and reporting can add to your
company`s organization’s value • Get equipped with tools and frameworks
Confirmed speakers • Didier Millerot, DG Internal Market and Services European Commission • Wim Bartels, Partner, KPMG Sustainability Global Head Sustainability Assurance • Michel Bande, Vice President Sustainability, Solvay • Marina Migliorato, Head of Sustainability, Enel • Maria Alexiou, CSR Director, Titan • Lois Guthrie, Director, Climate Disclosure Standards Board • Pietro Bertazzi, Senior Manager - Policy and Government Affairs, Global Reporting Initiative • Joan Geerts, Senior Manager Operations, DSM – on natural and social capital • Carola Wijdoogen, CSR Director, Dutch Railway Organization – on E P&L • Eduardo Puig Aznar, Director Stakeholder Engagement, Telefónica – on stakeholder
engagement 4.0
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For more information: www.csreurope.org Contact: Aron Horvath ([email protected])