Is it time for an ESG materiality assessment for your business?
TLDR:
Your company might be ready for a materiality assessment if:
1. You’ve engaged in some ESG activities but feel that they’re silo-ed
2. You’re getting the “what are you doing on ESG” question from stakeholders and would like to offer a thoughtful answer
3. You want to start taking action on ESG but are unsure of where to begin or where to focus
4. ESG feels paralyzing and you’re looking for a useful first step
Your HR team has an eye on DEI, Operations is working on waste reduction initiatives, and the VP of Engineering has the company’s data security processes and certifications under control. But none of them talk to each other, and your CFO just told you that your investors are asking about your climate action plan. It may be time to tie together these disparate work streams into a unified strategy.
1. Consider capacity
Does anyone on your team have the bandwidth and knowledge to take this work forward? Set them up well — with enough time, budget, and access, please! — so they can take a holistic view of the business now and in the future. If no one can spare the time but you don’t want to defer the work any longer, bring on a consultant to help guide you (👋🏽.) Often, it can be a useful employee engagement tool to assign the person most animated about ESG to this project.
2. Figure out what matters
It’s helpful to zoom out before diving in. What are competitors doing? What do your customers care about? What is the vision for the company overall? What are the most significant impacts and risks to your business? Be selective about your focus areas. Our clients that have the most success with finding focus areas will start by making a long list, and then prioritizing ruthlessly.
3. Get perspective
Once you have established priorities, take the time to understand the current state of affairs so you can effectively manage change. Is your recruitment team so busy finding replacements for turnover that they can’t take the time to follow a more equitable recruitment process, or is it that your team is growing really quickly? Are there tools that can help them do their jobs more effectively? What’s preventing the company from using less packaging or finding more environmentally friendly options? Don’t underestimate the power of data collection to help uncover the true barriers to fitting in ESG priorities.
4. Set objectives
You know how to set goals, do the same for ESG-related objectives. Try to make them both inspiring and achievable by putting concrete tasks and timelines alongside the hopeful end result. Bring people along and give them more reason to be happy about being part of your company. Then hit those goals and set some more!
5. Celebrate!
Take a moment to celebrate the process and learnings on the way to hitting those goals. ESG can feel like a significant undertaking with a long timeline. Starting a materiality assessment is a proven first step on the way to a more sustainable company.
If you are ready to kick off your materiality assessment, here are some resources to help you get started:
- Double and Dynamic: How to Enhance the Value of Your Materiality Assessment | Blog | BSR
- Sustainability Materiality Matrices Explained
- Workiva Interactive ESG Guide
Want to talk more about materiality assessments? Reach out to us at materiality@rizoma.ventures to get started.
About Rizoma Ventures & Green Buoy Consulting
Green Buoy and Rizoma have joined forces on multiple projects, and found that with double the network and brainpower — not to mention very complementary experiences — we can provide complete support for companies starting out their ESG journey. It’s also way more fun!
As Principal/ Founder at Rizoma Ventures, Claire works with companies on ESG materiality assessments and strategy design. She also helps investors integrate ESG into their investment processes, from investment thesis to reporting. Claire has worked in ESG and impact investing across asset classes for 15 years, serving in research, investment, product, and sales roles on 3 continents.
After completing a Master’s Degree in Sustainability Management from the Harvard Extension School and a Bachelor’s in Business Administration from Boston University, Eliza Erskine launched Green Buoy Consulting in 2018 to show small businesses exactly how to integrate sustainability to transform their companies. Her work focuses on executing sustainability strategy and B Corp certification for small & mid-sized companies across industries.
