Social impact strategy design

Organisations often use a materiality matrix to develop their social impact strategy and reporting.

KPMG defines a materiality assessment as:

The process of identifying, refining, and assessing numerous potential environmental, social and governance issues that could affect your business, and/or your stakeholders, and condensing them into a short-list of topics that inform company strategy, targets, and reporting.

An ever-increasing number of organisations are using materiality assessments. This is because the Global Reporting Initiative’s (GRI) G4 guidelines, the International Integrated Reporting Framework and the Sustainability Accounting Standards Board (SASB) in the US all advocate the use of materiality assessments. Furthermore, new regulation across the world, such as the European Directive on non-financial reporting, as well as many stock exchange obligations are requiring organisations consider and report on their environmental, social and governance (ESG) risks.

The GRI’s G4 Standards provide guidance about how to use a matrix to (a) show what your organisation’s biggest impacts on the world are, and (b) what investors, employees and other stakeholders really want to know when deciding whether to invest, take a job or engage with the organisation.

A strategy matrix acts as a strategy development tool. It focuses on the impacts on the business and what the business can control. (We note that though this is helpful for strategy, it may at times not be as helpful for reporting.) For a strategy matrix the Y axis represents Ability to impact/influence, while the X axis represents Impact on the business.

In the next step, we will ask you to perform a personal Materiality assessment. This exercise should help you to better personalise your approach to the SDGs by understanding both where your interests lie and where you can have the most impact.

Want to know more?

For a deep dive on this topic, we suggest you read:

Sustainable Insight: The essentials of materiality assessment