Are you focusing on what matters?

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Are you focussing on what matters? In order to develop a powerful sustainability action plan or report, a company needs to identify and understand its material issues, i.e. those issues of interest and importance to both the company and its stakeholders.

By identifying its material issues, the company is better able to focus for action and reporting on those areas of highest impact and relevance with regard to overall company performance.

What is materiality? AccountAbility, a global think tank that has pioneered the development of leading sustainability standards, defines materiality as a process to determine the relevance and significance of an issue to both an organisation itself as well as to its stakeholders. A material issue is an issue that will influence the decisions, actions and performance of an organisation or its stakeholders. To make good decisions and actions an organisation and its stakeholders need to know what issues are material to the sustainability performance of the organisation. To determine such material issues, an organisation needs to consider various types of information. Stakeholder inclusivity is a key component to the materiality process.

Figure 1: Materiality process

What is its purpose? Undertaking a materiality process can help to assess the relevance and importance of an issue. Assessing relevance of an issue can include considerations of:

• Level of stakeholder, peer or sector interest; • History or ‘future’ of an issue; and • Spread of interest in issues across various stakeholder groups.

Are you focusing on what matters?

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Assessing importance of an issue can include considerations of:

• Severity of impact; • Risk to the business; • Opportunity for the business; • Stakeholder expectations regarding action/response from the business; and • Ability/maturity of organisation to respond.

Who takes part? An effective materiality or issues prioritisation process will incorporate participation from across an organisation to gain a cross-functional perspective on the packaging issues and impacts that are most significant, and stakeholders that are either impacted or influenced by your packaging management and decision making. It is important that both these views are considered to complete a robust and balanced materiality process.

The process maps and prioritises the issues of interest to your stakeholders and importance to your business to allow you to see where these issues intersect – those are of significance to both are material.

Figure 1: Mapping what matters

Using materiality to add value Materiality can deliver the following:

• Robust identification of issues; • More concise and focused action plans; • Greater confidence that key issues are addressed; • Better integration between action plan and more broader environmental or

sustainability reporting; and • Rationale for selecting and using certain areas or indicators in your action plan.

Are you focusing on what matters?

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Materiality is a very powerful tool in helping a business identify and understand risks and opportunities from the outside through stakeholder’s eyes as well as from the inside by building on traditional risk management.

Materiality approaches can (and sometimes should) differ from organisation to organisation based on:

• Individual context of organisation; • Level of maturity; and • Level of internal buy-in and comfort.

Outputs of materiality A materiality assessment will result in a prioritised list of issues or topics that matter most to the organisation and its stakeholders. In the case of packaging this could be which environmental impacts are the most significant for an organisation to respond to. This is likely to be different for each organisation depending on their size, operating model and location.

Uses of materiality A materiality or issues prioritisation process is used for developing strategies and defining report content. For APC signatories, understanding what your most significant impacts and influences are, and how your stakeholders in turn impact and influence you, should be a key input into the development of an ACP action plan. By firstly understanding what matters most to your organisation and stakeholders, you will be able to develop a more robust and effective action plan that is likely to deliver the greatest possible environmental benefit, meet organisational and stakeholder expectations, and deliver other benefits such as cost savings and internal cross-functional collaboration and problem solving.

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