Thanks for coming back. On Tuesday, I promised you more
information on materiality; so today’s post is all about materiality, risk, and
sustainability. The concept of materiality, originating from accounting, is becoming
increasingly important in Corporate Responsibility. According to the Global
Reporting Initiative, “Material topics for a reporting organization should
include those topics that have a direct or indirect impact on an organization’s
ability to create, preserve or erode economic, environmental and social value
for itself, its stakeholders and society at large."
Until recently, environmental and social factors were rarely
thought of as “material”; only economic information was considered. However, as
the effects of climate change, increased consumption, and population growth put
strain on current systems and resources, these aspects are becoming key factors
in accurately assessing the true value of an organization. By addressing
sustainability in materiality, future risks can be identified and action can be
taken to provide long-term viability.
This ties in with the video and post from Tuesday on Understanding Material Flows in Your
Operation because, in order to assess the materiality of your operations,
you must fully understand the inputs and outputs of your organization. After
listing these variables, it is important to place ranking on the necessity of
the input to your operations, as well as the risks/opportunities involved with
securing these inputs in future markets. By classifying your inputs in this
manner, you can begin to strategically shift areas of focus to the most critical
facets of your operations.
Performing a materiality analysis of your organization
benefits you, your stakeholders, and ultimately society, as you will use this
information to alter business strategies and advance your practices to ensure
sustained performance.
– Tad Radzinski, PE, LEED AP, SFP
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