How can you identify the most material issues for your stakeholders?
Learn from the community’s knowledge. Experts are adding insights into this AI-powered collaborative article, and you could too.
This is a new type of article that we started with the help of AI, and experts are taking it forward by sharing their thoughts directly into each section.
If you’d like to contribute, request an invite by liking or reacting to this article. Learn more
— The LinkedIn Team
How can you identify the most material issues for your stakeholders? This is a crucial question for any organization that wants to be sustainable and responsible. Stakeholders are the people or groups that affect or are affected by your activities, such as customers, employees, investors, suppliers, communities, regulators, and others. Material issues are the topics that have significant impacts on your stakeholders and your business performance, such as environmental, social, and governance (ESG) factors. By identifying and prioritizing the most material issues for your stakeholders, you can align your strategy, goals, and actions with their expectations and needs, and create value for both sides. In this article, we will show you how to use a four-step process to identify the most material issues for your stakeholders.
The first step is to identify who your stakeholders are and why they matter to your organization. You can use different methods to map your stakeholders, such as brainstorming, stakeholder analysis, stakeholder salience, or stakeholder power-interest matrix. The idea is to group your stakeholders into categories based on their level of interest, influence, legitimacy, urgency, or other criteria. For example, you can divide your stakeholders into primary (directly involved in your operations) and secondary (indirectly involved or interested) groups, or into internal (within your organization) and external (outside your organization) groups. You can also assign them different roles, such as supporters, influencers, beneficiaries, or critics. The goal is to have a clear and comprehensive picture of who your stakeholders are and what they care about.
-
Zoi Kontodimou
Corporate Sustainability Management & ESG PhD Researcher | Chair - CQI Sustainability SIG
A stakeholder map is one of the most important tasks a company should perform. Knowing a company's stakeholders, their interests, and influence is the basis of proper strategic decisions and prioritization of actions toward sustainability. The corporate reporting should address stakeholders' issues since feedback on progress and problems is the only way for them to make solid and informed decisions.
6
-
Daniela Hernández Álvarez
Directora General Earth & Life University 🌎 | Ayudo a líderes a profesionalizarse en sustentabilidad | Speaker | Emprendedora | Upskilling & Desarrollo de capacidades para equipos
La toma de decisiones basadas en el análisis de stakeholders o grupos de interés es una de las mejores herramientas que he usado. No necesitas ser una gran empresa para comenzar a implementarlo. Simplemente basta con hacer un mapa: 1) Al centro, está tu empresa y la esfera más cercana, tus colaboradores, clientes, inversionistas y proveedores clave. 2) Después, identifica quiénes son: Competidores (con los que valga la pena tener colaboraciones o aprender de ellos) Administración gubernamental (y todas las instancias vinculadas a permisos clave para tu operación) Medios de comunicación que difunden iniciativas parecidas a las tuyas. Asociaciones beneficiadas (si tu empresa beneficia directa o indirectamente a ONG's o empresas aliadas)
2
-
Maria Tsabal
Legal Counsel @ FMO | Project Finance and Sustainable Finance
Knowing your stakeholders isn't just ticking a box; it's strategic insight. Dive deep - beyond the usual suspects. Consider those indirectly influenced by your projects and their future generations. How will your renewable energy initiatives impact them? The key is to think long-term and act with foresight.
2
The next step is to identify the issues that are relevant and important for your stakeholders and your organization. You can use different sources of information to collect and analyze the issues, such as surveys, interviews, focus groups, workshops, media reports, industry standards, best practices, benchmarks, or reports from peers or competitors. The idea is to gather as much data and feedback as possible from different perspectives and channels, and to categorize the issues into themes or topics. For example, you can group the issues into environmental (such as climate change, resource use, waste management), social (such as human rights, labor practices, diversity and inclusion, health and safety), and governance (such as ethics, transparency, accountability, risk management) categories. You can also use frameworks or guidelines, such as the Global Reporting Initiative (GRI), the United Nations Sustainable Development Goals (SDGs), or the International Integrated Reporting Council (IIRC), to help you identify the issues.
-
Felipe Krol
Strategy Consultant @ Stage Consulting | Sustainability | Innovation | ESG | CSR
It is necessary to employ various methodologies to assess the concerns of each stakeholder. The same approach may not be suitable for all of them, and it is crucial to discover ways to engage them effectively. While we must consider the perspectives of multiple stakeholders, we should not lose sight of the business's demands. To achieve this, we must have a deep understanding of the business strategy and operations, and continually review industry standards, guidelines, and benchmarks.
4
-
Maria Tsabal
Legal Counsel @ FMO | Project Finance and Sustainable Finance
To pinpoint issues that resonate with stakeholders, don't just gather data - engage with it. Use innovative tools to measure stakeholder sentiment, like AI analysis of social media trends. Cluster findings into ESG themes, but keep an eye out for emerging concerns that could disrupt the renewable energy sector.
2
-
Dr Reji Kurien Thomas
I Empower organisations as a Global Technology & Business Transformation Leader | CTO | Harvard Leader | UK House of Lord's Awardee |Fellow Royal Society & CSR Sustainability |Visionary Innovator |CCISO CISM |DBA DSc PhD
Engage with stakeholders through surveys, interviews, and workshops to gather their views. Analyse feedback to identify recurring themes and concerns. Cross-reference stakeholder concerns with business operations to pinpoint material issues. Consider the impact of these issues on the business and stakeholders. Prioritise issues based on their significance and the level of stakeholder concern. Validate the identified material issues with a representative stakeholder group. Document the process and outcomes to ensure transparency and accountability. Regularly revisit and reassess material issues to keep them aligned with stakeholder expectations and business evolution.
2
The third step is to prioritize the issues based on their level of materiality for your stakeholders and your organization. Materiality is the degree to which an issue affects the ability of your organization to create value for your stakeholders in the short, medium, and long term. You can use different methods to assess and rank the issues, such as scoring, rating, weighting, or ranking. The idea is to assign a score or a rank to each issue based on two dimensions: the significance of the impact on your stakeholders and the significance of the impact on your organization. For example, you can use a materiality matrix to plot the issues on a grid, where the vertical axis represents the stakeholder impact and the horizontal axis represents the organizational impact. The issues that are in the top right quadrant are the most material, and the issues that are in the bottom left quadrant are the least material.
-
Maria Tsabal
Legal Counsel @ FMO | Project Finance and Sustainable Finance
Prioritizing issues is more of a skill than science. It's not just about impact scales; it's about understanding nuances in stakeholder values. Integrate dynamic data sources, like predictive analytics, to foresee which ESG factors will matter most in the evolving landscape of renewable energy.
2
-
Gwenaelle Gerard
CEO de ResponSable | Mejoramos las relaciones que tienen las empresas industriales con sus grupos de interés a través de estrategias de RSE | Responsabilidad Social Empresarial | Riesgos ESG
El estudio de materialidad es esencial para determinar qué temas son cruciales para una empresa y sus grupos de interés. Actúa como una brújula, guiando a las empresas hacia las áreas que requieren atención inmediata y recursos. Las empresas deben considerar no solo cómo los problemas afectan a sus partes interesadas, sino también cómo estos problemas pueden impactar la salud financiera y operativa de la organización (concepto de "doble materialidad"). La idea de utilizar una matriz para representar problemas en función de su impacto en los grupos de interés y en la empresa es una forma visualmente efectiva de priorizar. Esta matriz de materialidad puede ser una herramienta valiosa al tomar decisiones y asignar recursos.
1
-
Cristian Ortiz
Climate risk and sustainability manager
La matriz de materialidad ha sido mucho tiempo la herramienta estrella para ponderar los problemas y priorizar acciones, lo que desencadena toda una estrategia de sostenibilidad/ESG. Algo que agregar relevante es que hay que ser meticulosos sobre cómo definimos los conceptos, pues las personas pueden comprender diferente: Riesgo climático a cambio climático. Por otro lado, destacar que se necesita una representatividad de los diferentes grupos y ser transparentes en la forma que se parametrizan los resultados, a fin de evitar sesgos. No siempre apareceran temas que como profesionales consideramos relevantes, o que son un "must" para nuestro sector. Que no aparezcan no significa que no les daremos un espacio en la estrategia del negocio.
The final step is to validate and communicate the issues that you have identified and prioritized as the most material for your stakeholders and your organization. Validation is the process of checking and confirming the accuracy, completeness, and relevance of the issues and the data that you have used. You can use different methods to validate the issues, such as internal reviews, external audits, stakeholder feedback, or peer reviews. The idea is to ensure that the issues reflect the reality and the expectations of your stakeholders and your organization, and to address any gaps, errors, or inconsistencies. Communication is the process of sharing and reporting the issues and the results of your materiality assessment with your stakeholders and other interested parties. You can use different methods to communicate the issues, such as websites, newsletters, social media, presentations, or reports. The idea is to inform and engage your stakeholders and other interested parties about the issues that matter to them and to your organization, and to demonstrate your commitment and actions to address them.
-
Gwenaelle Gerard
CEO de ResponSable | Mejoramos las relaciones que tienen las empresas industriales con sus grupos de interés a través de estrategias de RSE | Responsabilidad Social Empresarial | Riesgos ESG
Al priorizar problemas basados en la materialidad, las empresas también demuestran transparencia y responsabilidad hacia sus partes interesadas. Comunicar cómo se han priorizado los problemas y las acciones que se están tomando para abordarlos puede fortalecer la confianza y la relación con las partes interesadas.
3
-
Liviu Ghiuzan 李勇
💡 Results-driven Senior Leader | Driving Excellence in Quality Management, Technical Development & Manufacturing Efficiency | CSR and Sustainability | Leading Industry Transformations
Effective engagement and alignment with stakeholders, including customers and supply chain partners, are essential for sustainable business practices. Engage Stakeholders: Actively involve both internal and external stakeholders to understand their concerns and expectations. Periodical Reviews: Conduct routine evaluations of supply chain partners to assess their performance and alignment with your organization's standards. Strict Follow-Up: Establish a robust follow-up process to address issues promptly and ensure corrective actions are taken. Preventive Measures: Emphasize preventive actions to avoid recurring issues and enhance long-term sustainability.
3
-
Elisa Seith
Climate Risk Solutions | Sustainability | ESG Reporting | Geopolitics & Defense | MBA candidate (Data Analytics)
Whilst sustainability reporting has matured over the past years, it is still considered a bit of a Wild West Area, as few reporting standards specify reporting requirements to a great extend, and so many different reporting practices have evolved over the past years. Standards such as ISSB and ESRS are trying to streamline this. That means, transparency is very important, as is exchange with auditors, peers and your data providers. Be open about your questions, your reporting gaps and foster a communication environment in which you can learn, rather than trying to just tick the boxes behind closed doors.
1
-
Elisa Seith
Climate Risk Solutions | Sustainability | ESG Reporting | Geopolitics & Defense | MBA candidate (Data Analytics)
Remember that sustainability reporting is not intended to just give you another obligation to come up with a report. The world has enough reports for reporting's sake. Instead, sustainability reporting is an invitation to really look at your business practise from an innovative and regenerative lens. How does the way you do business now shape the world in which you want to do business in the future? In the end, sustainability reporting should go way beyond a tick box exercise, but instead trigger a real reflection process with sustainable change as its goal.
2
-
Mike Gifford, CPWA
Whatever industry you are in, look for sustainability champions. They could be in competing businesses, or even your clients. Building trust with them and working together can everyone make greater strides towards sustainability. It may be that there are lessons learned from other markets which might be applied to your own.
1
-
Cristian Ortiz
Climate risk and sustainability manager
Para el sector financiero hay algunos informes en sostenibilidad/ASG que son un buen ejemplo y que dan detalles de su análisis de materialidad y/o identificación de sus grupos de interés: Informe Integrado de Banorte 2022 Reporte anual Banco do Brazil 2022 Informe periódico anual Bancolombia 2022 En fin, aún hay miucho camino por recorrer y cada camino es diferente para llegar a la comunicación adecuada y efectiva en sostenibilidad. Asi como los informes evolucionan con el tiempo, la materialdiad también.