What matters most?: How boards can use materiality to prioritise sustainability
Our primary focus as an ESG & Ethics Committee is to translate the evolving ESG agenda into practical, actionable transition plans that are measurable, benchmarked, and aligned with clear milestones. Achieving this requires a disciplined scan of the ESG universe and the application of materiality to identify the areas that matter most, thereby enabling effective resource allocation, planning, and programme implementation. In our case, the most material issue is Scope 3, specifically the financed GHG emissions of our lending portfolio. We have assessed our total contributed emissions, identified the industries with the greatest contribution, and put forward a targeted programme to drive emissions reductions through green lending initiatives and client awareness-building.
Eran Klein, NED and Chair of the ESG & Ethics Committee, TBC Group
For many years, organisations have increasingly used the concept of materiality to understand what sustainability matters are most relevant to their investors and broader stakeholders, and subsequently use this understanding to drive strategic decisions.
An organisation’s ability to generate value over time is linked to its interactions with stakeholders, society, the economy and the natural environment. However, an organisation is likely to also impact the environment and people in a range of ways, including through its value chain. Understanding these impacts is essential for organisations to determine material drivers of value and risk. If undertaken strategically, a comprehensive materiality assessment will explore how all these sustainability issues are likely to affect the future resilience and success of the business.
The materials below are designed to support board members in ensuring that materiality assessments are harnessed as a strategic decision-making tool:
- Deep Dive including case studies to support with how materiality assessments can drive strategic value
- Board Discussion Prompts to support your conversation in the boardroom
- Checklist to ensure new materiality assessments support board strategy.
Download the Deep Dive
Deep Dive: Using materiality to prioritise sustainabilityDownload our Board Discussion Prompts
Board Discussion Prompts: Using materiality to prioritise sustainabilityDownload the Checklist
Checklist: Using materiality to prioritise sustainabilityRelated Content
5 recommendations for NEDs on integrating new sustainability-related disclosure requirements
This briefing paper outlines 5 key considerations for NEDs to take into account to ensure that their organisations are poised to derive value from aligning to the UK Sustainability Reporting Standards.
Watch: Accelerating the Integration of Climate-Related Matters into Corporate and Investment Decision-Making: A Discussion for Non-Executive Directors
Watch this discussion from Chapter Zero, Deloitte and the International Sustainability Standards Board (ISSB), where panellists examined whether climate-related risks and opportunities are being sufficiently priced into investment decision-making and explored how NEDs can guide the integration of sustainability insights into core business strategies to enable more resilient businesses.
