Sustainability reporting should aim to be a faithful reflection of the organization’s values, vision, plans, progress and challenges on the different dimensions of sustainability. Determining ‘materiality’ helps an organization to understand issues that are relevant to its stakeholders over the short, medium and long term. This understanding, in turn, makes sustainability strategy and action more in tune with stakeholder priorities, and more robust in terms of creating impact and navigating risk. The process has to be centered at the intersection of organizational relevance and stakeholder priorities. In this section, we discuss the rationale, approach and outcomes of our materiality determination exercise.
Materiality is informed by the socio-economic context in which an organization operates and the needs of its primary and/or influencing stakeholders. It requires us to keep ‘ear to the ground’ by understanding stakeholders’ perceptions and expectations, the business context, local and macro developments and changing thresholds of sustainability risks and opportunities over time.
The Driving Principles
In addition to the classic framework that maps issues on the basis of ‘Relevance to the Organization’ and ‘Relevance to Stakeholders’, our materiality framework incorporates the following driving principles:
Incorporation of multiple dimensions: Material dimensions vary from one organization to another as the context of each company and the industry or geography in which it is operating is not necessarily the same. The issues faced by a business can be different even within the same sector and geography. The materiality determination should reflect the complexities of multiple environmental, social and governance dimensions that are relevant to Wipro as a company and to the IT Services sector. It is also important to look at the probability and impact of the issues over a long period of time. The societal and global context could shift and what would have been peripheral in the short term could eventually become central and critical.
Individual stakeholder view: The conventional materiality matrix typically places issues based on relevance to the company and relevance to stakeholders; however, given that a company will have multiple stakeholders who are often very different in the roles that they play, it makes little sense to talk about ‘stakeholder relevance’ as an abstract, macro notion unless it is mapped to the next level of detail to the individual stakeholder.
Intrinsic worth: In the conventional materiality matrix of ‘Relevance to Wipro’ and ‘Relevance to Stakeholders’, certain critical sustainability issues may not score high on either of the dimensions. And yet, they have an intrinsic worth that compels serious and deep engagement. Therefore, our new framework will look at all these three factors.