ESG Strategy and Materiality: deciding which ESG issues actually matter to your business.

It is a structured process for identifying which environmental, social and governance topics are significant enough to warrant management attention and disclosure, based on their impact on stakeholders and on the business. It sets the boundary for everything that follows: strategy, targets, data collection and reporting.

Single materiality asks only how ESG issues affect the company financially, the investor-facing view taken by the ISSB standards. Double materiality also asks how the company affects people and the environment, which is the view GRI takes and which European reporting requires. Which one applies determines what you must assess and disclose, so it is settled at the start, not discovered later.

The BRSR requires a listed entity to disclose its material responsible business conduct and sustainability issues, the risks and opportunities each presents, its approach to adapting or mitigating them, and the financial implications. You cannot complete that disclosure credibly without having carried out an assessment, so it is required in substance even where the format is not prescribed.

A full reassessment every two to three years is the common practice, with an annual review to confirm nothing has shifted. Refresh sooner after a significant change: a major acquisition, entry into a new geography, a regulatory shift such as a new carbon or supply chain requirement, or a serious incident that changes stakeholder expectations.

The stakeholders whose views actually bear on the business: investors and lenders, major customers, employees, suppliers, communities around operating sites, and regulators. Engagement should be documented, reporting frameworks and assurance providers ask how stakeholders were identified and consulted, and an assessment carried out only inside the management team is easy to challenge.

The risk register looks outward-in: what could harm the company. Materiality, in the double sense, also looks inward-out: what harm the company causes. They overlap substantially and should be reconciled. An issue that is material for reporting but absent from the risk register usually indicates one of the two exercises has not been done properly.

A defined set of material issues; measurable objectives and targets against each, with baselines and dates; named executive owners; the governance route by which performance is reviewed and escalated; the data and systems needed to measure it; and the disclosure commitments. Anything short of that is a statement of intent rather than a strategy.