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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board's Accountability on ESG

Kaveri Power Ltd, a listed entity, holds a stakeholder engagement exercise. Employees rate 'workplace safety' as highly important to them and it also has a high effect on the company's operations, while 'office stationery recycling' rates low on both. The board uses a materiality assessment. What should the board do with these results?

The board should prioritise workplace safety, since it is highly important to stakeholders and significantly affects operations, while giving stationery recycling lower priority. Materiality assessment exists to focus strategy and reporting on the topics that matter most, not to treat every topic equally.

  1. AReport both topics equally to maintain uniformity
  2. BPrioritise workplace safety in its ESG strategy and reporting, and give stationery recycling lower priorityCorrect
  3. CDrop workplace safety because it is already regulated
  4. DReport only stationery recycling because it is easy to measure

Explanation

A materiality assessment ranks topics by importance to stakeholders and impact on the business. Workplace safety scores high on both, so it deserves priority in strategy and disclosure. Treating all topics equally defeats the purpose of materiality, and regulation does not remove a topic's materiality.

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