Materiality Assessment – an overview

The concept of materiality is used to guide businesses through their sustainability strategic planning processes. Material sustainability issues are social, governance, economic and environmental matters that a company impacts on (directly or indirectly) or may be impacted by. They will vary for any given organisation depending on their size, product types, location, etc., as they are a consequence of their specific circumstances, hence companies need to go through their own exercise to establish bespoke priorities. For example, soft drinks companies rely on a consistent supply of water, hence a scarcity of it would be a significant challenge, potentially bringing them under pressure from other users.

Key considerations of a Materiality Assessment:
  • identify and prioritise non-financial risks, taking into account key stakeholder views
  • asking stakeholders directly provides an accurate view but can be a high-risk approach
  • initially, typically use internal knowledge as a proxy for stakeholder views
  • consideration of likelihood and impact, similar to a health and safety risk assessment process
  • the presentation need not use a ‘matrix’ structure, it could simply be a list
  • format will depend on the audience e.g. shareholder, finance departments.
  • expert facilitation can help keep the process focused.

Sustainability reporting is often a voluntary exercise, hence the process used is up to the company to decide. A typical process could be:

  1. Identify a project team able to act as proxies for the relevant stakeholder groups
  2. Agree on issue areas to review through pre-interview and desktop research
  3. For each issue, assign a significance to the business and each relevant stakeholder group
  4. Reconvene to sense check the findings
  5. Conduct a gap analysis on control measures for each area and develop action plans for additional controls.

In 2018, the Dairy Sustainability Framework published a briefing paper on materiality which serves as a useful overview.

The Impact of Resource and Nutritional Resilience on the Global Food Supply System, for example, uses a ranking method to identify the food categories (according to Codex Alimentarius/UN definitions), such as the world protein includes (1) wheat, (2) rice, (3) milk, (4) chicken.

The following assessment reports show how some large organisations have designed and published their outputs. These are simply provided as examples and do not signify endorsement by IFST. Risk perception and impacts change over time, meaning that risk managements are a moving feast and their reports need to be living documents.

Danone (2021)

Ebro food (2018)

Nestlé (2018)

SSP group



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