Читать книгу ESG Investing For Dummies - Brendan Bradley - Страница 40

A materiality analysis is a method used to pinpoint and prioritize the issues that are most important to an organization’s value chain and its stakeholders. After identifying these issues, they are typically analyzed using two different lenses. For direct environmental issues or working with sustainable suppliers, the organization needs to evaluate the capacity for each issue to positively or negatively impact growth, cost, or trust. They then need to determine how important each issue is to their stakeholders. The final result gives a picture of which issues should be prioritized according to their importance to the company’s success and stakeholders’ expectations.

The analysis required can also improve a company’s business strategy, as it forces the company to analyze business risks and opportunities and understand where they are creating or reducing value for society. In providing the process of how to measure different financial, social, and environmental performances, this analysis can spot trends and help anticipate emerging issues. In turn, it can allow companies to focus their efforts on how they allocate resources and develop new products or services to stay ahead of the competition. Therefore, a materiality analysis can create its own business case on why and how a company should report ESG data, and it can be used for communications with individual stakeholder groups like investors, partners, customers, or employees. This also increases the chances of satisfying stakeholders’ demands.

However, companies voluntarily self-report information that they consider materially relevant. Moreover, companies also tend to overreport areas of positive impact and underreport areas of negative impact. As such, for investors performing cross-company or cross-industry comparisons, it can be difficult to find or develop consistent data sets or methodologies that allow a true assessment of materiality (see Chapter 12 for more information). Further moves toward mandatory reporting, and clarity on what should be reported and how, should improve this issue in the future.