Friday, February 2, 2018

Simplifying materiality

Less than a month to go to the always-exciting edie Smarter Sustainability Reporting Conference on 27th February 2018 in London: this will be the eighth conference in the series and every year, we always benefit from new insights about what smarter sustainability reporting means and to whom, what's influencing reporting, how the best do it best and how we can all do it better. It's always an intensive day packed with updates, stories and tips from experts and practitioners. I am hoping you can join and if you haven't already signed up .... contact me for a discount code to for online registration. 

In the meantime, I was chatting with Stuart Poore, Canon's EMEA director of sustainability and government affairs. Stuart will be joining the conference to talk about materiality in a session on "Materiality Uncovered" where we will explore where you start with determining materiality, who you engage with, how you prioritize and how you align materiality with strategy. All riveting stuff, which so many companies regularly battle with. Overall, however, Stuart has some solid advice for all of us (based on his experience of materiality work over the years in some what he calls very elaborate and complex processes):

"As far as materiality is concerned, my experience is that there is great value in keeping things really simple. I have learnt that a healthy dose of common sense and pragmatism gets you a lot further, faster."

I couldn't agree more with that! I often stare at materiality matrices that are so densely populated with trillions of issues that I wonder what the exercise has actually been worth to companies. Materiality, by its nature, is not a mass market commodity that you buy in bulk: Ah yes, I will have 5,000 material issues for my next report, please! It's not even a prescribed set of issues that you crib off someone else's sustainability report or a SASB standard. It's should be a small set of considered impacts that are specific to your company and its operations and strategic in value. Addressing material impacts should deliver both business value and social value in a meaningful way. It's not simply doing business responsibly, which can apply to absolutely everything a business does. Defining materiality is actually not all that difficult. The sophisticated scoring and analysis systems created by some companies to deliver a set of dots on a grid is often so overkill that they probably have no time or resources left to do anything about the issues behind the dots. Keeping it simple and using everyone's collective common-sense sounds both rather obvious and also immensely refreshing.

Having said that, Canon's 2017 Sustainability Report takes simplicity to the other end of the spectrum, by stating two broad-brush sustainability material impacts that cluster together a number of issues.

Two all-encompassing issues is certainly a simple way of defining materiality but it could be any company, anywhere, anytime. So, it also makes common sense that materiality should be a little more company-specific. In fairness to Canon, a materiality matrix is provided specifically for environmental issues.

And the report narrative is very detailed on different social impacts that Canon addresses in its sustainability strategy. In fact, it's a fascinating report that covers issues from the use of high-definition IoT-connected network cameras to combat crime, to early detection of disease with advanced medical imaging and diagnostics, 3D vision equipment for robotics and nanoimprint technology used in semiconductors. This is a fascinating review of the technology-driven aspects of the way we live now and a glimpse into the future; enabling such advanced technology will of course influence the way we live, and probably even how long we live and how healthy we will be as we live. I often think the issue with materiality is that we try to put it into predefined boxes of things we can precisely count - emissions, waste, employee turnover. It's the things we have most difficulty counting - like the impact of medical imaging on people's lives - that are the most far-reaching. Canon clearly has its finger on the pulse of these very important directions that drive sustainable development.

Stuart Poore added: "Use your insights and intelligence. Don't over complicate it. Lead the debates as you perceive them rather than leaning too heavily on tool kits and methodologies and frameworks that various standards bodies publish. There is a place for those but trust your intuition and knowledge. Based on that philosophy, we have been through a process of listening to our various stakeholders and were able to define a set of priorities that the Board signed off on which enabled us to make some progress."

Stuart will share stories and examples of how the Canon methodology worked in practice and the challenges, debates and learning along the way. I am looking forward to hearing more. I hope you will join us on 27th February.

elaine cohen, CSR Consultant, Sustainability Reporter, former HR Professional, Trust Across America 2017 Lifetime Achievement Award honoree, Ice Cream Addict, Author of three totally groundbreaking books on sustainability (see About Me page). Contact me via Twitter (@elainecohen) or via my business website (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm). Need help writing your first / next Sustainability Report? Contact elaine: 

Elaine will be chairing  the edie Conference on Smarter Sustainability Reporting  in London on 27th February 2018  

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