The publication aims to help corporate reporting and risk professionals implement a robust and practical process for identifying the social, environmental and governance topics that matter most to a business and its stakeholders.
It also aims to help professionals link the assessment of material sustainability issues with wider enterprise risk management processes, thereby making the process a tool for strategy development as well as for sustainability reporting.
KPMG’s guide breaks the materiality assessment process into 7 phases:
The paper provides detailed and practical guidance for each phase and includes elements that form the minimum requirements for a robust process as well as advanced steps designed for organizations with more established sustainability strategies.
The guide also highlights challenges commonly experienced by risk and reporting professionals when implementing a materiality assessment process for sustainability and it provides KPMG’s views on these issues. Challenges include how to connect materiality in sustainability with the wider business, how to involve senior management in the process and how to manage the time and cost implications of stakeholder engagement.
KPMG has launched the guide in response to the growing focus on materiality in reporting frameworks and accounting standards such as the Global Reporting Initiative’s (GRI) G4 guidelines, the International Integrated Reporting Framework and the Sustainability Accounting Standards Board in the US. KPMG’s approach is aligned with the GRI G4 guidelines and can be tailored to apply in an integrated reporting context.
Wim Bartels, KPMG’s Global Head of Sustainability Reporting and Assurance, said: “Identifying the most material sustainability issues to be addressed in company reporting is a challenge that many of our clients seek our professional guidance on. The reporting landscape is becoming more complex as reporting frameworks multiply and evolve and regulations become increasingly demanding. Many companies understand the principles of materiality in theory but struggle to design and implement a robust assessment process in practice. We have produced this guide to help them with a process that is effective yet not overly complex.
We believe that companies that integrate the sustainability materiality process with the enterprise risk management process are in a better position to inform investors and other stakeholders about their sustainability impacts, risks and opportunities.”
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KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.