How organisations should validate their sustainability material topics

The outcome of the materiality process performed by an organisation helps to determine the sustainability matters organisations will focus on and the information that they will discuss within the sustainability report.

Organisations often reassess their sustainability topics annually and perform materiality refreshers within three to five years on average to ensure that they continue to address issues that affect long-term value creation and are relevant to stakeholders.

Therefore, whether it is determining the material topics at the onset of an organisation's sustainability journey or reassessing or refreshing the sustainability topics in the future, organisations have to ensure that their selected topics are relevant to their business and cover the significant issues that impact their organisations from a risk, opportunity and impact perspective.

In validating an organisation's sustainability material topics, it should consider the following.

Peer group benchmarking, considering an organisation's size, complexity, market and industry, is vital in validating material topics. The benchmarking exercise can reveal to an organisation other matter that its peers are exploring, indicating how they might impact value creation over time.

An organisation's risk register is important when validating material topics, including evaluating how the risks identified within the register might have changed over time.

While there might not be total alignment between the risk register and material topics, reviewing the risk register could highlight issues that organisations should consider for sustainability.

Another critical process for validation is stakeholder engagement. Stakeholder engagement is a continuous process that organisations have to perform proactively to ensure stakeholder concerns and expectations are considered by the organisation in order to fulfil stakeholder demands.

The stakeholders to consider should be internal and external to the organisation, and the process should be one with integrity to provide confidence in the outcome of those engagements.

In addition, organisations should consider thought leadership sources and content on the industry trends that could impact their sustainability risks, opportunities and impact, particularly from a competitive standpoint.

Failing to validate an organisation's sustainability topics could be costly due to the adverse effects of the fierce competition organisations face today.

Akinyemi Awodumila is a Partner at Deloitte East Africa