Materiality Case Study: Tennant Company
In 2013, Tennant Company revisited and evolved its strategy for the next phase of its sustainable enterprise initiative. This was a multi-step process and will be an ongoing activity as the company continuously refines its sustainable enterprise. The first step for Tennant was to identify stakeholder groups and key members of each group. For each group, the company defined its strategies and tactics for engagement. Not all groups were engaged directly or by the same methods. Where direct dialogue was not practical, Tennant employed proxies. Table 1 on the following page – “Stakeholder Engagement Strategy and Tactics” – lists each stakeholder group, the strategies for engaging them, the tactics the company used and their concerns and priorities. The company’s three primary stakeholder groups are: customers, investors and employees. These are also the most active users of its sustainability reporting.
The objective of this stakeholder engagement and materiality exercise was to identify and prioritize stakeholder needs, expectations and concerns. This process resulted in a long list of aspects on which the company could potentially report. The material aspects are covered either in the body of the company’s FY2013 Sustainability Report or the GRI Index.
For the customer stakeholder group, the company directly engaged its Strategic Accounts sales managers and “mined” customers’ Requests for Information (RFIs). Customer’s top three interests and concerns are: Greenhouse gas emissions (carbon and energy), water, and waste. An emerging area of interest is the company’s value stream, both up and down. Human rights, labor practices, safety, ethics and corruption are the core aspects asked about the company’s value stream.
Investor engagement was done through investor meetings with the company’s executives. Investors’ primary interests are economic and governance, aspects covered in the company’s SEC filings. However, there is an emerging interest in the company’s environmental stewardship and carbon reporting.
Tennant engaged its employees in two ways. First, through an all employee attitudinal survey, which the company conducts about every two to three years, and second, through a series of regional materiality workshops.
During 2013, Tennant conducted six materiality workshops. Workshop participants represented the key activities at each of the company’s major locations globally. The first step was to brainstorm the company’s internal and external impacts on the environment, society, and economy. The company then used a structured prioritization process, based on the GEMI Metrics Navigator™ tool, to prioritize the list of these environmental, social, and economic issues and opportunities. The company plotted each issue or opportunity according to stakeholder’s level of concern against the importance to Tennant’s success.
The company found many issues and opportunities were similar or related. These were grouped through an affinity mapping process. There were two outputs from this exercise:
- Stakeholder materiality analysis matrix.
- Focus areas for the company’s sustainable enterprise initiative. These are: Products, GHG Emissions/Energy, Waste (all forms), and People and Communities.
The final phase to establish objectives, goals and metrics was completed in 2014. For the goal-setting process, the company empaneled several small working groups. Working group members were company leaders who have a key role and impact on achieving results in a given focus area. The working groups established goals for each area that will be tracked and on which the company will focus its sustainability reporting. These objectives, goals and metrics can be found in the focus area sections of the company’s FY2013 Sustainability Report.