The essentials of materiality assessment

The essentials of materiality assessment

This edition of Sustainable Insight presents KPMG's guide to materiality assessment for sustainability reporting.



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Materiality is the principle of defining the social and environmental topics that matter most to your business and your stakeholders. Some 80 percent of the world’s largest 250 companies already identify material sustainability issues in their reporting. Yet the process of identifying material issues is a challenge that clients of KPMG member firms are increasingly seeking our professional guidance on.

KPMG presents a 7 phase sustainability materiality assessment process for sustainability professionals, risk managers and those involved in corporate reporting. The phases are:

  1. Define scope and purpose
  2. Identify potential topics
  3. Categorize topics
  4. Gather information on impact and importance
  5. Prioritize
  6. Engage management
  7. Seek stakeholder feedback

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 (IR) Framework and the Sustainability Accounting Standards Board in the US. KPMG’s approach is aligned with the GRI G4 guidelines and could be tailored to apply in an integrated reporting context.

As well as detailed guidance for each phase of a materiality assessment, the publication also highlights challenges commonly experienced by risk and reporting professionals when implementing a materiality assessment process for sustainability and it provides KPMG’s solutions.

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