Integrated Materiality Analysis

Last year, we introduced our integrated materiality analysis for the first time. It was the result of a holistic review of our major risks, issues and opportunities, and how they relate to our strategic actions. The rationale behind this annual exercise is to ensure that we have actions and initiatives in place to capitalize on key opportunities, and have mitigation plans to address key issues and risks.

Our 2016 evaluation again incorporated insights from a wide group, including auditors, customers, shareholders and employees, as well as other stakeholders such as financial and regulatory bodies, non-governmental organizations (NGOs) and leaders in the communities in which we operate (see Note 2 of the Sustainability statements).

Integrated materiality diagram

Integrated materiality diagram (graphic)

The integrated materiality analysis is not a static exercise. This year, we added a number of risks/issues, some of which are new. Others were included in previous years, but have now been elevated to a higher level of importance, while certain risks have moved to another category compared with last year’s assessment. We have also reduced the number of key risks, confirming the view that in some areas our risk mitigation actions are now embedded. It also helps to keep the list shorter for added focus.

For example, we have identified the need to adapt our climate strategy, as this is an area of increasing concern following COP21. In the Sustainability statements more details are given about the plans we now have in place to tackle this important issue. Another example is how we review the possible impacts of – and respond to – new developments in technology and society. Here, we have started to define our (digital) innovation roadmap.

The integrated materiality analysis indicates that our core principles and strategic focus areas take into account all the updated key opportunities and issues. The diagram above offers a visual representation of this – illustrated by the white circle. It also shows that our three main risk areas have links and overlaps. So managing our key opportunities and risks in an integrated, holistic way, continues to make sense in an ever more complex and dynamic world.