continuous materiality

Materiality Assessments: The New Frontier

This article covers all you need to know about how to write a materiality assessment in the 21st

Knowing what topics are material to your business is an essential component in managing the success of your business, which is why materiality assessments are so crucial. With rapid changes in the technology available within a globalized world, it is now possible to combine the creative and analytical skills of human beings, with the productivity potential of machines to efficiently process large data sets, creating automated analytics across multiple data sources in a matter of minutes.

We are seeing an unprecedented rise in risks associated to climate change, cyber and geopolitical risks, and increased demand for transparency. Markets are evolving. Social expectation is changing. We now have access to game-changing technology which is disrupting the traditional materiality process. Companies are starting to harness the power of data to make real time decisions on these issues – and we, at eRevalue, are helping them to do this. In fact, those CSR and sustainability professionals that are working on their once-a-year “materiality assessments” right now – can now do so using evidence-based information and use technology to monitor any significant changes overtime.

“In 8 years at the Global Reporting Initiative (GRI), working in the area of sustainability and Environmental, Social and Corporate Governance (ESG), I realised technology was the key to delivering genuinely insightful information on how business issues are evolving over time. It has always been my aspiration to use technology to change the game, by manipulating the explosion of available data into structured knowledge for improved value creation for business”. Marjella Alma, CEO, eRevalue

Any companies that are not harnessing the potential of emerging technologies are unlikely to be able to regain lost ground.

Enhancing Human Expertise with Technology

Being able to harness technology to analyse more accurate and larger sets of information, is what is making the difference to companies. Technologies deliver faster, cheaper, more exhaustive information, and create opportunities to streamline decision-making and stakeholder engagement processes.

“The platform provides us with a decision-making basis to derive concrete initiatives to improve our performance with regard to the material topics”. Dr. Monika Streck, Head of Strategic Sustainability Management, Munich Airport

Forward-thinking companies are beginning to react to this disruptive technology, using it to refine their existing approaches to prioritizing material issues across teams – risk, sustainability, legal, finance and investor relations. eRevalue works with companies in 12 countries that are doing this within various industries – banking, electric utilities, real estate, consumer goods, oil & gas, air & defense, mining & metals, and pharmaceuticals.  

They recognise that anticipating and addressing emerging issues will help increase the lifespan of their business. Risk management has traditionally been a slow and manual process, making issues identification difficult. Companies need to evaluate the relevance of a multitude of sources, all of which are continuously evolving. Using data analytics, combined with AI technology, means that the process of monitoring changes in the corporate landscape is now considerably more time efficient, relevant and up to date.

“It’s not about determining numbers behind the strategy, but determining the strategy behind the numbers”, Leonardo Gutson, eRevalue (former KPMG consultant)

The key question for decision makers is this: Are you moving with the times, or are you stuck in the past?

Fast Forward

We are seeing a rise in demand for continuous materiality assessments across a range of business maturity models. As such, we have recently enhanced our service offerings to support this process – starting from automated industry/peer benchmarking all the way up to integrating these non-traditional issues into traditional ERM processes. We call this “integrated ERM”. And we aren’t the only ones talking about a more integrated approach to sustainability and risk management – Deloitte and WBCSD are also discussing these issues.

materiality assessment

 

eRevalue’s business intelligence platform Datamaran®  automates the tedious process of extracting and analyzing information from a large number of sources – corporate reports, regulatory initiatives, social media and digital news. It enables professionals to easily digest and convert data into valuable knowledge. This approach offers an innovative solution for assessing what might be material, enhancing risk management and informing corporate strategy:

“How can we use data to drive conversations within our company, getting the right people at the table…and the business opportunity is not just for the people in the sustainability silo, but looking at data to help us drive conversations across our company”. Jennifer Leitsch, Director of Corporate Responsibility, CBRE

Building the Foundation – Baseline & Emerging Business Issues

We have identified 100+ emerging business issues that can impact the ability of companies to operate efficiently, across geographies and sectors. This list is built upon non-financial reporting frameworks, the Global Risk Report of the WEF and therefore includes issues related to environment, social and governance (ESG) – but also geopolitical and technology risks.

The scope evolves as new issues are identified with key headline topics related to climate change, digitization, executive compensation, board composition, IP infringement, responsible procurement, human rights, bribery and corruption and many more. The value to be derived from addressing these issues can include greater efficiency, cost-savings, effective reputation management, positive company ethos and transparent governance.

Depending on the company, value chain, sector and key areas of operations, the issues will be different. eRevalue also differentiates between what non-traditional issues are becoming the de facto “new baseline” as well as what is top of mind today – “the hot topics”.

Being dynamic and responsive to change by using real-time quality analytics across emerging issues is crucial, which goes hand in hand with the capability to identify and address issues as they arise.

“The current pace of evolution of businesses’ operating environment requires to look beyond traditional risk management practices. The use of big data and artificial intelligence can help modernize and optimize the process.” Maeva Devienne, eRevalue (former Deloitte Consultant)

eRevalue was created to bridge the gap between non traditional and core business. Our business intelligence tool, Datamaran® extracts large amounts of global data from a variety of sources of emerging issues, highlighting real-time identification of connections between various data sets.

This is a powerful offering for continuous materiality assessments, identifying trends, gaps, and opportunities for automated monitoring of strategic issues.  The approach includes analysis of any type of corporate report, regulatory initiatives, social media and media – and a validation of the issues prioritized by key stakeholders. Automated alerts keep clients informed on identified issues through the annual subscription – and alert clients when new issues come to the table.

Get in touch to find out more about how we can help you with continuous materiality.

 

eRevalue

eRevalue

eRevalue is a business intelligence provider based in London and New York. Our interactive analytics platforms – Datamaran™ and Caspian™ – help business leaders, advisors and investors monitor emerging regulatory, reputational, and competitive risks to make organizations and investments future proof.
eRevalue

About eRevalue

eRevalue is a business intelligence provider based in London and New York. Our interactive analytics platforms – Datamaran™ and Caspian™ – help business leaders, advisors and investors monitor emerging regulatory, reputational, and competitive risks to make organizations and investments future proof.

Leave a Comment