Do you conduct one every 2 years as is best practice, or do you do it every 3 years, at the risk of losing touch with some of your stakeholders? Are you conducting your assessment from the lens of investor risk and focussing on investors as an audience, as is the ISSB school of thought? Or do you go down the CSRD and GRI route which also takes into account the company’s impact on people and planet through applying double materiality? Are you focusing on internal or external stakeholders and how many?

More importantly what do you do with the results? In the age when the communication and disclosing of results and metrics is almost equally as important as the results and metrics themselves, how do you ensure the outcomes of the materiality assessment resonate with the key audiences? Publishing a materiality matrix is one output, but translating the findings of the assessment into key messages for the different audiences and stakeholders in the forms and channels that they engage with is where the findings can begin to have a real impact.

The standard approach is that a materiality assessment is a listening exercise. You are investing the time, resources and budget, as you try, not only to collate the various views of your stakeholders, but actively listen to what they are concerned about. To this end you need to use a team which is impartial, independent, and neutral when gathering this information. They must also be confident in holding conversations with senior leaders, executives and C-suite and this comes with experience at operating at that level. 

These views collected should then be framed by industry best practice, reporting standards, disclosure frameworks, and regulatory requirements, which means that there is a need for strong experience in this space. AI and software tools can accelerate this process but not replace it.

However, what is often overlooked in a materiality assessment is the stakeholder engagement element of it. First and foremost, a materiality assessment is, in itself, a stakeholder engagement exercise. The process, beyond its information extracting piece, sends a strong signal that your business is engaging with its stakeholders.

The findings and strategic decisions that follow a materiality assessment, can then be shaped and repurposed to be communicated back to the same stakeholder groups you engaged with. This can be done through a variety of channels, focusing on different issues with the aim of deepening that engagement and relaying the message that the company is completing its feedback loop. This where the intersection of communication and consultancy becomes key.

As the world grows ever more unpredictable and complex, so do the needs and interests of a business’s stakeholders. In this setting, and as companies transition to a more competitive, sustainable and responsible business model, stakeholder engagement becomes key. The companies that lead this transition, are the ones that engage their stakeholders on the journey. Because when people are with you, there is nothing you can’t achieve.

If you would like to find out more about how Black Sun works with clients to carry out materiality assessments and use them to help spark positive stakeholder engagement please get in touch with Naomi Hawkins, Head of Business Development. 

About Black Sun

Black Sun is a global group of strategic advisors, consultants and stakeholder engagement specialists. We believe that brands and businesses can have a big impact on our society  – they can shape more ethical practices, build more inclusive communities and deliver more sustainable performance. Ultimately, they can spark positive change in the world.

We partner with visionary companies to define and communicate their purpose, strategy and culture and bring to life their value creation story. Our services and solutions directly address the business-critical concerns of today;  best-practice disclosure and accountability through reporting;  protecting reputation and building trust with digital communications and helping businesses to effectively communicate their long-term responsibility and sustainability story.