Materiality is the (best) way of understanding your business
What is materiality?
Materiality is a process of understanding the business through the recognition and prioritization of its significant aspects in the medium-long term, whether economics, environmental or social. It’s a double process:
- On the first hand, through a self-knowledge process, the organization lists and prioritizes the most relevant topics for the business
- On the other hand, by listening to the main stakeholders, the organization internalizes the others’ perception of the business impacts
What is the Materiality Matrix?
The Matrix is the tangibility of the materiality, an effective and structured way for the organization to demonstrate the set of the main relevant materials topics to its business.
- Monitor market challenges at regulatory level
- Identify stakeholder expectations regarding economic, environmental and social topics
- Identify future trends, impacts, risks and business opportunities
- Identify the main aspects of the business responsible to create value in the medium-long term
- Integrate material aspects into the business strategy
- Structure the sustainability report
Step-by-step instructions for creating the Materiality Matrix
- Identify the main market trends
- Benchmark the challenges and opportunities already identified by the top institutions of your sector
- Identify the main stakeholders of the organization (internal and external)
- Listen to key stakeholder expectations and rank them by importance
- Identify the business impacts and the organization’s degree of control
- Identify and rank the organization’s priorities
- Develop the matrix, by highlighting the material topics (those that are a priority for the stakeholders and for the organization)