The company that proposes to be sustainable, aligning its operations with the ESG concept, has a long way to go. In this journey, a fundamental step is the definition of its materiality.
Materiality can be understood as the definition of relevant topics for the organization regarding environmental, social, and governance (ESG) sustainability strategies and practices. It relates to the main impacts the organization generates or is subject to, as well as the opportunities tied to each of its risks.
Whether large corporations or small and medium-sized enterprises, it is essential to consider the particularities of organizations, even if they operate in the same sector.
The impact of topics on business is not the only aspect to be considered through the lens of materiality. Similarly, it is crucial to highlight what matters to stakeholders, which include employees, suppliers, customers, consumers, and all other parties involved in this process.
Each stakeholder has different affinities and understandings of what is most relevant in their daily lives. Depending on social, economic, environmental, political, and even geographical conditions, an employee may prioritize topics such as labor practices, diversity, or relationships with leadership. For the local community, the business’s relevance might lie, for example, in its potential to generate jobs. From an employee’s perspective, the biggest interest may sometimes be employer branding.
Given so many specific interests and needs, materiality helps understand the relevance and impact of topics on the business and contributes to defining action priorities, setting goals and strategies, and reporting results to all stakeholders.
This understanding provided by materiality must necessarily interpret the biases revealed by each stakeholder accurately. In this sense, we reinforce the importance of understanding ‘people’ to develop adequate, cohesive processes with tangible results.
With the goal of reducing risks associated with these biases, we present three points that should not be overlooked in this journey.
The first is establishing a relationship of trust with each stakeholder group to ensure genuine interest in providing correct and adequate information for evaluation.
The second step involves clarifying each material topic, aligning expectations, and fostering understanding.
No less important, we highlight the need to understand stakeholder groups and adapt communication with each of them. We cannot always use acronyms, English terms, or technical references when our goal is to ensure stakeholder comprehension.
Sustainability and adopting ESG practices do not just differentiate a company in the market by 2025. They genuinely enhance environmentally responsible operations aligned with the social development that this year so greatly demands, always considering the current scenario and the context in which the company operates.
