One step to ensure your ESG initiatives matter
"Things which matter most must never be at the mercy of things which matter least." Stephen Covey
As organizations grapple with the idea of what becoming carbon neutral really means, it makes complete sense that you would first have to understand what your emissions are. If you have read my past blog articles, this means data and measuring the energy that your organization produces.
The second step however gets a bit less coverage, which is determining what you want to take ownership of. To answer that question, we need to dive into the topic of materiality.
If you are not familiar, with an ESG lens, materiality is the process of identifying what topics matter most to your organization and the stakeholders of your organization. To get there we conduct a materiality study that begins with mapping the current key ESG issues. This process applies to any industry as every industry has different issues that impact their sector. For more details, SASB provides guidance that can be helpful.
In Real Estate these may include:
Life cycle impacts of products and services
Carbon emissions & energy management
Waste stream production
Water stress and wastewater management
Human capital development, including health, safety, and wellbeing
Governance, including risk management, ethics, and transparency
With our industry ESG issues in mind, we need to next understand what our organization stakeholders feel is important. This typically involves interviews, surveys, or a combination in which the companies values, growth strategy, operating principles, and industry-specific key ESG topics provide a framework. The same process with internal stakeholders can also be applied to external stakeholders. The goal is to determine which ESG issues are most relevant to both internal and external stakeholders as well as the companies core strategy.
With answers in hand, we now begin building a Materiality Map, using a vertical axis to represent importance to stakeholders and a horizontal axis to represent importance or impact on the business goals, each issue being evaluated on a scale of lower to higher importance.
As the issues are mapped by both importance to stakeholders and impact on the business, the issues will fall into one of four quadrants on the materiality map. What we are looking for are the issues that fall into the top right quadrant, these are the items of most relevance for the organization.
Essentially we are developing “buckets” of what is material, and what is immaterial so that our strategy can focus on what matters.
If you are ever considering a really insightful internship project, a materiality study of your organization can be a particularly impactful project. The nature of conducting the study is a bit time-consuming and there are research methodologies that need to be followed to ensure valid results, including testing the reasonableness of the assessment itself. The following graphic provides an overview of the process through the lens of SASB:
Once completed, the materiality study provides both evidence for GRI standard reporting as well as a more targeted approach to ensuring that your impacts are targeted to what matters.
The answer to the question of determining what you are going to take ownership of is now grounded by what is material to your organization, meaning your actions have more impact.
You can help reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the built environment's impact. When not blogging, Chris is helping the real estate industry reduce energy and water impact as the Vice President of Sustainability for Conservice, the Utility Experts. Whether Multifamily, Single Family, Student Housing, Commercial, or Military, we simplify utility billing and expense management by doing it for you. Our insight into your utility consumption provides an opportunity to identify risks. Leveraging innovation and experience we ignite solutions that have real impacts and track performance to ensure the trendline stays laser-focused on the goal. To get there, we must build relationships within our organizations and outside of our organizations building the critical mass needed to truly make a difference. We have before us a tremendous opportunity. Standing shoulder to shoulder, we will get this done. Contact me at claughman@conservice.com for more information.