A materiality assessment is a tool that helps businesses identify and prioritize the most significant environmental, social and governance (ESG) issues relevant to their operations and stakeholders.
For example, a Canadian mining company conducts a materiality assessment by surveying employees, investors, regulators, and community members to rank 30 potential ESG issues. It discovers that water stewardship and Indigenous community relations are ranked as the most material topics by nearly all stakeholder groups, guiding where it allocates ESG reporting and investment.
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