November 12, 2015 Comments are off Kellen
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Materiality Case Study: Carnival Corporation & plc

In 2014, Carnival Corporation & plc conducted an analysis to reevaluate the significant economic, environmental and social aspects of its operations, to further assess the relative impacts of these aspects, as well as to determine the required components to transition from GRI-G3.1 to GRI-G4 sustainability reporting. Known as a “materiality assessment”, this analysis enables the company to determine which aspects substantively influence the assessments and decisions of its stakeholders; recognize and act effectively in relation to sustainability related opportunities and risks; and, determine how these aspects affect its stakeholders, society and the environment. During this evaluation process the company simultaneously conducted a benchmarking analysis of major hospitality, travel and marine industries. These two analyses provided a framework for determining which aspects to focus on in its fourth annual Corporate Sustainability Report.

As part of its materiality assessment process, Carnival Corporation & plc:

  • Reevaluated the significant issues presented in its prior sustainability materiality assessments.
  • Reviewed the environmental, social, governance and economic aspects and indicators in the GRI G4 sustainability reporting guidelines, as they apply to its business.
  • Analyzed the results of stakeholder sustainability engagements, including investor and customer inquiries, questionnaires and surveys from rating organizations, industry reports and analyses, policies and regulatory guidance, among others.
  • Benchmarked its sustainability strategy using publicly available information.
  • Held internal meetings to discuss company perspectives on sustainability aspects and impacts.
  • Examined over 50 aspects and issues, including areas of significant organizational impact, as well as broader sustainability trends (GRI G4 46 Aspects).
  • Mapped the full universe of stakeholder and company aspects on a materiality matrix, identifying the mid and high-scoring issues as priorities for its operations. This mapping enabled the company to:
    • Prioritize information on the basis of materiality, analysis of environmental aspects and impacts (ISO 14001), sustainability context, and stakeholder inclusiveness;
    • Agree on the desired content for each metric and the approach to reporting (qualitative vs. quantitative detailed performance tracking, etc.); and,
    • Expand supply chain materiality.

APPLYING THE RESULTS

The chart published in Carnival Corporation & plc’s FY2013 Corporate Sustainability Report summarizes the results of the company’s materiality assessment and shows, for each aspect, its relative concern to the company’s stakeholders and its current or potential impact on the company.

Materiality is about identifying the issues that matter most to Carnival Corporation & plc’s business and to its stakeholders.  “High” and “Medium” issues help the company to set the agenda for its sustainability strategy and for what it included in its current and future sustainability reports. “Low” issues, while important and managed by the company, are not currently covered in detail in the company’s sustainability reporting as they are of lesser concern to its stakeholders.

Carnival Corporation & plc plans to perform this materiality and benchmarking evaluation every two years, to make sure it continues to address its stakeholder needs, operational impacts, regulatory landscape and technological developments.

[This case study originally appeared in GEMI’s Quick Guide on Materiality.]

October 20, 2015 Comments are off Kellen
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Materiality Case Study: Tennant Company

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.

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.

Stakeholder Materiality Analysis Matrix (FY13)

[This case study originally appeared in GEMI’s Quick Guide on Materiality.]

Tennant Company - Stakeholder Engagement Strategy and Tactics

October 5, 2015 Comments are off Kellen
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Materiality Case Study: Smithfield Foods

Materiality Case Study: Smithfield Foods

Smithfield Foods conducted its first materiality analysis in 2010 to gain a better understanding of the key sustainability issues for its company and its stakeholders. In early 2012, the company conducted a streamlined update to see how concerns over specific issues may have evolved over two years.

For its materiality analysis, Smithfield Foods used a third party to interview 30 internal and external stakeholders. These stakeholders included customers, regulators, NGOs, suppliers, company management, company sales personnel, and employees. Those interviewed were asked about what they considered challenges and successes for Smithfield Foods, as well as what they felt were the most important issues that Smithfield Foods should be addressing.

MATERIALITY MATRIX

Smithfield Foods Materiality Matrix (FY12)

The information collected through this process resulted in the above matrix of the company’s most material issues—those of greatest impact on Smithfield Foods and the highest concern to stakeholders. Those issues appear in the upper right box, and are the issues that are most critical to the company’s ability to create and sustain value today and in the future.

APPLYING THE RESULTS

The company used the results to continue to place high importance on its animal welfare and food safety programs, but also increased its focus on creating value in the local communities where it has operations. Goals are now in place that include stakeholder engagement, community outreach, and educational participation at the local level.  As much as is practical, the company weights discussion around the topics that have been identified as most material to its business and to its stakeholders in its annual sustainability reporting.

An updated materiality analysis is being planned by the company for 2015/2016 to address the new GRI guidelines.

[This case study originally appeared in GEMI’s Quick Guide on Materiality.]

Questions for Interviewees

  • What are Smithfield’s most important challenges, risks and opportunities from a corporate responsibility point of view?
  • For each challenge, risk, or opportunity, why is it important?
  • Does it have the potential to improve business results? How (e.g. by supporting innovation/new products; saving money through operational efficiency)?
  • Could it negatively affect business results (e.g. by imposing costs, harming sales)?
  • Could it affect Smithfield’s reputation positively or negatively?
  • Could it affect Smithfield’s standing in its local communities positively or negatively?
  • Could it affect employee productivity or turnover?
  • For each challenge, risk, or opportunity, how much control does Smithfield have over it?

Smithfield interviewees only:

  • What issues do you perceive are most important to stakeholders and why?
  • Which stakeholders are most important to Smithfield?
September 16, 2015 Comments are off Kellen
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On Our Way to 2020

On Our Way to 2020: A Materiality Study

By Dan Daggett, Ph.D., Executive Director, Global Sustainability (Sealed Air Blog)

Earlier this year, we launched Sealed Air’s Better Way for Life Plan and 2020 Sustainability Goals.     As you would expect, a lot of work was done behind the scenes to set such aggressive commitments.  To make sure we weren’t creating a strategy in a vacuum, we collected feedback from suppliers, customers, and non-governmental organizations to gain valuable insights and identify the most material issues to the company and our key stakeholders. The results were Sealed Air’s first materiality assessment and matrix.

We conducted extensive research with both Sealed Air employees and external experts in surveys and interviews. The participation rate and highly engaged feedback from partners reinforced the importance of the work.

The materiality analysis helped us understand the social and environmental risks and opportunities that stakeholders see as most critical for the company. The results have helped focus resources and guide the development of a powerful, new sustainability strategy. To ensure the success of our new sustainability strategy, we outlined three pillars of measureable, aggressive, impactful sustainability goals, called ‘The Better Way for Life Plan’. The Plan and goals focus on helping people around the world live better lives, delivering solutions that meet customers’ sustainability needs and reducing the impact of our global operations.

Internal and external perspectives were well aligned and in agreement that the most material issues across Sealed Air’s business include employee safety, product safety, food security, ethical business practices, product stewardship, and transparency. We will continue to engage our stakeholders, and use their feedback to guide the company’s sustainability work in the future.  The most exciting part of this process is to see how closely aligned our sustainability strategy is with our overall business strategy. The new sustainability strategy isn’t business as usual; it’s a playbook for the company to live out its vision.

GEMI, a leading organization that corporations look to for guidance in developing materiality studies, recently featured our materiality study in their Materiality Quick Guide.  The GEMI Quick Guide on Materiality is designed to help corporations understand materiality and its relationship to sustainability; recognize the importance of materiality in defining an appropriate sustainability strategy; and learn what factors to consider when undertaking a materiality assessment.  It is a compliment and an honor for our work to be featured in the GEMI Materiality Quick Guide. You can view the guide here.