While the process of conducting a materiality assessment may differ slightly between organizations, assessments will typically follow some form of this process:
Build your stakeholder assessment team: Stakeholders are required to give their input on which ESG factors should be considered. This team should consist of internal executive leadership, management personnel, and employees as well as external stakeholders.
Determine initial ESG factors: Organizations should work with stakeholders to draft initial ESG factors. These factors should include environmental, social, and governance factors. For example, environmental factors may include waste management and pollution control. During this stage, organizations will benefit from selecting and following ESG frameworks that help define potential factors.
Gather feedback from stakeholders: Once initial factors are determined, organizations should design and share a ESG materiality survey that will allow stakeholders to rate each factor based on perceived impact, relevance, and importance.
Synthesize feedback to determine materiality: Organizations should compile and analyze all survey feedback and rank each factor. Map results using a materiality matrix to show the significance of each factor. Eventually, this matrix will be published with ESG reporting for ESG disclosure.
Develop ESG goals based on materiality: Based on determined factors, organizations can move forward to design specific and measurable ESG goals as part of their ESG strategy efforts.