Full steam ahead for global catastrophe?
nvestors, shareholders and even customers aren’t what they were in the nineties. The future of a business’ success is now tied to the authenticity of its brand's values. Although some key stakeholders may still rock huge shoulder pads and too much hairspray, their coffee cups are now made from vegetable derived materials, and they increasingly drive electric cars.
And while they may still own some frankly unfashionable choices and opinions, we can be in no doubt that the consensus—and the majority of consumer choice—is pulling firmly towards more equitable and sustainable practices in all walks of life.
At the same time, the writing is on the wall for ‘business as usual’: even if we wanted to plough on, it is clear that we cannot continue to seek short term profit at the expense of the wealth of future generations. But an alternative model is still TBD, which creates no end of anxiety. What do we do before we realise utopia?
After COP26, which seemingly failed to respond to the stark warnings outlined in the Sixth Assessment Report from the IPCC, many of us have been left wondering what’s next? How do we avert climate catastrophe and slow the staggering levels of habitat and biodiversity loss that threatens our world and way of life? Whatismore, these are seemingly insurmountable challenges for world leaders, so what can businesses do?
Luckily, there’s some good news: the solutions are out there and they are multiplying. So it’s an opportune time to remind you all that you’re not alone. Penny Black is here to help you answer such timeless questions as: how do we, as businesses and as people, effect real change? Where do we even start to contribute?
This blog looks at how a Penny Black materiality assessment is an ideal jumping off point for businesses looking to address the challenges of the day and create value for all. But before we look at what material issues and materiality assessments are, we start by considering the central role of brands in all of this.
Brands that generate more than profit
While a business’ first steps towards sustainability can be intuitive and easily implemented—think banning plastic straws and diversifying recycling bins—most leaders quickly realise that meaningful impact is not only difficult to achieve, but that the hard work starts when trying to select what exactly to work on.
We all intuitively know that changes must align with a business' strategic goals—including bottom line—but this is as far as gut feeling and most MBAs take us. So, where next? First there is an obvious and urgent need to prioritise what a business can do to help avoid the projected outcomes of the anthropocene.
The greatest questions, therefore, that Penny Black wants to help you answer are: where do we start? What does action on these topics really mean for our business and our stakeholders? And, when we do get started, how do we know our actions are actually of value to the planet, its people and, of course, the business too?
What are material issues?
A business’ journey towards sustainability begins with identifying material issues associated with its business that impact people, planet, industry, and brand. Material issues include environmental, social and governance topics (hence ESG) that are likely to affect the financial condition or operating performance of businesses. These topics can be business specific or industry or sector wide and can be used as cornerstones of brand campaigns and reporting.
The issues that are most material to a business are deeply embedded within, or crucial to its operations. For good and for bad, the way a business deals with these issues are ultimately reflected in the way its brand—as an idea and the role it plays in people's lives—is truly perceived. Transparency is critical if transition to a sustainable future is to be credible.
Any distance between a business’ operational reality and the values projected by its brands appear as inauthentic and even deceptive to increasingly critical ‘activist’ consumers. If not managed appropriately, these material issues will diminish brand value, impact company performance and profitability, sometimes irreparably.
The Materiality Assessment
Using recognised international benchmarks and standards, a Penny Black materiality assessment is an external review that identifies and then prioritises issues that are most material (read most important) to a given business or organisation and its brands.
The findings of a Penny Black materiality assessment are used to guide strategy and reporting, and make a case for where to strengthen a business's operations sustainably and transparently. A goal of every one of our assessments is to provide the basis of a credible plan on which a business can take concrete action.
So, how do we know which issues are most material and need to be addressed? We ask the people that know the most about the issues that are impacting your business. Ultimately, this is an exercise in stakeholder engagement, designed to find what is crucial to your people and to the stakeholders that matter the most to your business and brands.
Because transparency plays a large role, it’s an exercise that demands the input and guidance of senior management, staff and key stakeholders. Due to the delicate nature of issues included, a materiality assessment is ultimately an exercise that the organisation may find difficult to complete on its own. This is where Penny Black comes in.
Strategic value creation with Penny Black
As a consultancy that delivers brand-led change, Penny Black understands that the authenticity of your brand and the commitments your business makes to a sustainable world cannot be separated.
Crucially, a Penny Black materiality assessment considers your business’ needs, but it also factors the relationship your brand and operations have with key stakeholders. This is vitally important because your brand is not just the face of your business, it's a reflection of how you work as conscientious people in a changing world towards responsible and sustainable growth.
The importance of branding is also why our materiality assessments integrate internationally recognised benchmarks and standards so that your business can think, act, report and market with the assurance of recognised and established frameworks and ways of working.
We would be happy to answer any questions that you have — for more information please contact us through the contact form below.