Definition of materiality matrix

A materiality matrix enables a company to decide which CSR (corporate social responsibility) initatives to invest in. The total value created by a CSR initiative can broadly be broken down into business and societal values.

Business value refers to the favorable stakeholder behaviours resulting from the initiative such as purchasing the company’s products, investing in the company, or otherwise helping the company reach its goals.

In contrast, societal value refers to the direct social benefits (such as healthier lifestyles) and/or environmental benefits (for example, increased recycling) that result from the CSR initiative.

The matrix plots CSR issues in terms of two dimensions: the importance or attractiveness of the issue to stakeholders and the importance of the issue to the company in terms of the likely influence of the initiative(s) on business success.

Example
Allianz (insurance company) analyses megatrends internally and does regular stakeholder surveys to create its materiality matrix. For example. in 2010, climate change and employee satisfaction emerge as priority issues both for Allianz and its stakeholders, while issues such as "social disparities" turns out to be of much smaller concern to the company and its stakeholders. [1]

 

 

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