Strategy
Double materiality is one of the latest sustainability reporting mandates making waves across board rooms and business strategy sessions. Businesses often have doubts on return on investment for ESG (Environmental, Social & Governance) efforts, which clouds decision-making and perpetuates a perceived dichotomy between ‘what’s good for people and planet’ and ‘what’s good for wallet’. In theory, double materiality assessments are meant to bridge this divide. As such, they serve as both a sustainability strategy and reporting tool. However, it is a relatively new concept with no regulatory alignment and competing guidance frameworks.
Ipsos’ detailed review on existing regulation highlights major limitations that undermines both legitimacy and credibility of the approach. Ipsos has developed a proprietary double materiality framework that addresses these limitations, increasing accuracy in reporting and strategy.
A core weaknesses of double materiality assessments is they rely solely on stakeholder perceptions to determine ‘what’s good for people/planet.’ Ipsos has wide evidence of a ‘Believe-True’ Gap proving public perceptions are often misinformed. For example, 7 in 10 people globally feel they know the most impactful actions to reduce carbon emissions, yet the same number also wrongly assume it’s recycling. Current regulatory guidance does not address this issue, which means if the findings are not verified businesses may prioritise the wrong issues, both from a strategic and reporting perspective. Furthermore, it doesn’t include guidance on weighting or analysis, leaving findings open to manipulation. This not only poses greenwashing and reputational risk but undermines sustainability efforts by diluting impact. Businesses should not be advised to base sustainability decision-making upon perceptions alone, yet this is happening.
Ipsos identified a clear need for a framework that takes accountability of findings into account and allows us to verify results. The Ipsos ESG Materiality Framework was created to do this. It ensures we’re not building a strategy/reporting process based upon false perceptions, but fact. Ipsos has led a public campaign to provide public guidance on weighting, best practices and a step-by-step overview of how to execute double materiality in a way that mitigates risks and improves overall accuracies. Critically, the framework is compliant with key global regulatory models.
In 2023, multinational insurance company, Aviva, commissioned a double materiality assessment to be developed in compliance with International Sustainability Standards Board (ISSB) regulations. Aviva required a nuanced, robust, reliable, future focused assessment that could be replicated for periodic adjustments moving forward.
For accountability and transparency, Ipsos developed an Expert Advisory Panel consisting of Finance, Reputation and ESG specialists to feed into project milestones.
The outcome of this project was a regulatory-compliant double materiality framework that addresses the weaknesses of existing regulatory guidance to ensure businesses can confidently assess their sustainability priorities. Unique features include guidelines on principles such as weighting, best practices on stakeholder selection and surveying, and measures to increase the confidence of stated results. This work has become central to Aviva’s sustainability strategy and reporting processes with a focus on short, med and long-term strategy, whilst serving as the basis for best practice for wider industry.
View the Ipsos Strategy3 profile in the MCA Members Directory.