According to the GRI standards, the sustainability report shall cover topics that:

  • Reflect the reporting organisation’s significant economic, environmental, and social impacts; or
  • Substantively influence the assessments and decisions of stakeholders.

Materiality assessment helps the reporting entity to identify those topics that are of great importance to the economic, environmental and social impacts on stakeholders’ assessments and decisions. To perform materiality analysis, here are the 8 steps the reporting entities are recommended to follow.

Benchmarking and gap analysis

  • Assess current best practices (e.g., impacts and material topics, how peers are conducting their materiality analysis)

  • Identify gaps and establish what is needed to close the gaps

Designing the materiality analysis

  • Define how the materiality analysis will be implemented and how often it will be updated

  • Establish who will be involved (internally and externally) and what the outcome will be (consider the possibility of external support)

Analysis of the value chain

  • Define the value chain of the company (the full range of an organisation’s upstream and downstream activities, which cover the full life cycle of a product or service, from its conception to its end use)

Identification of the initial list of topics

  • Identify an initial list of topics related to the organization’s potential impacts

Excution of the materiality analysis

  • Impact assessment (review the initial list of potential impacts, assess and rank them in terms of relevance and significance to the company)

  • Assess topics that substantively influence the assessments and decisions of stakeholders

  • Set threshold and prioritise topics

  • Consider creating materiality matrix (optional)

Identification of the material topics’ boundary

  • For every material topic, the reporting organization shall report the related boundary, including where the impacts occur and organisation’s involvement with the impacts

Materiality validation

  • Review the analysis and ensure that the Reporting Principles for defining report content have been applied correctly

  • Final validation

Selection of ‘in-accordance’ option and defining the set of disclosures for each material topic

  • Choose the ‘in accordance’ option (Core or Comprehensive) or GRI-referenced option

  • Define the set of disclosures for each material topic based on the selected ‘in accordance’ option