What is assessed in the societal view? Does this matter to society and does the company significantly impact on this topic?
When it comes to defining attributes assessed in the societal view, the ESG impacts being assessed differ from business to business. It is not practical to apply a standard set of attributes or a standard template to all businesses since each enterprise has its own peculiarities.
The same could be said of societal material assessment.
Factors being considered in a societal material assessment of a small business may not be similar in an assessment conducted for a large corporate.
Broadly, a societal materiality assessment could span across such elements as employee health, safety and wellness, diversity and inclusion, talent attraction and retention, human rights, labor/management relations, community engagement, infectious diseases, and changes in how people live and work. Still, from one company to another, this range may be further expanded or shrunken, depending on the scale and strategic focus of each company.
For instance, Nestle’s assessment includes zero waste and community relations as having significant impact on the company’s success and therefore materially relevant. This may not be the case for a small business. A small business is at the mercy of community relations and its relevancy could be higher than for Nestle. A small business may not have time to worry of going zero waste but for a global brand like Nestle, committing to zero waste would be a higher priority that may not be quashed!
Among Nestle’s societally material impacts are responsible sourcing, human rights, business ethics, community relations, accessible nutrition, animal welfare, nutritional value of portfolio, product quality and safety, and changing consumer bahviours. Nestle appears to place zero waste as an environmental materiality impact rather than materiality relating to people and communities.
Sometimes, “quality” of delivery of an organization is confused with “materiality” and therefore a distinction should be made. Quality is how well the organization delivers on its promise while materiality pertains to what impacts the organization’s ability to deliver.
Another question that often pops up often is: “How does a company determine the most important societal impacts?”
According to the Erasmus School of Economics, mostly external experts are engaged here-and based on each company, such engagement may be limited to first or second tier stakeholders. This does not limit the participation of the company’s internal experts; after all, who knows about the company and its culture better than an internal expert?
