ESG Professionals Group

We are embarking on a process to update our stakeholder materiality assessment (MA) for use in our 2023 Sustainability Report. By way of background, we are a relatively young, public company (IPO in 2017) and have conducted only one previous MA for which we used a third-party consultant.  We want to update our MA this year and bring the process completely in-house. 

That said, may I ask for any feedback you may have on any of the following ideas:

(1) Preferred survey platform (Survey Monkey, Survey Gizmo, etc.) and why? We currently anticipate asking the respondents to rate each response across a range (Highly Agree to Highly Disagree) as well as to rank the material topic in order from most significant to least significant for our business.

(2) Process for identifying stakeholders to include - How many stakeholders (i.e., debt & equity holders, employees, customers, suppliers, regulatory agencies, etc.) should we aim for to constitute a 'valid' sampling? For example, with >1,500 employees, should we engage all of them or use a randomly chosen sample set as a proxy? 

(3) We have the material topics we identified in the first MA which we settled on after reviewing (i) stakeholder feedback during the period, (ii) peer company disclosures, and (iii) sustainability reporting frameworks. Any other potential sources of topics we should consider which could impact our identification of material topics? Is it reasonable to assume that if our business model hasn't changed since IPO, then we should not expect to see a significant change in our material topics?

(4) Any tips or tricks to improve response rates? For instance, have you seen better success on response rates if your original request for survey participation was accompanied by a note from the CEO, CFO, or CSO? 

(5) Would you be willing to share samples of your company's MA questionnaire?

Thanks in advance for any feedback!

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Teresa Odom
Vice President-ESG & Sustainability
Diversified Energy Company plc
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Hi Teresa-this is a GREAT question(s). I'm going to provide some thoughts and hopefully we get more ideas because there isn't "one way" to do ESG materiality. 

1. I've seen survey monkey used quite often...in my prior life as a consultant, we had our own survey tool as well. One thing to make sure you check is the availability of the survey in various countries if you're extending your engagement outside the US.
2. This is definitely up to your organization to help determine what's appropriate and is generally subjective. I've seen several approaches:
   • Work with the internal governance structure or exectutives supporting ESG to determine the important stakeholder groups-use those same people to identify which stakeholders from those groups to survey or engage with - it might be less about the number of stakeholders in certain groups than the relative importance (e.g. top investors as opposed to all investors)
   • Generally, when a company goes through the materiality update process, the surveys might be reduced depending on how much change the company expects to see
   • Lots of companies have started to integrate ESG materiality questions into normal cadence surveys (e.g. annual employee survey, customer surveys) which can lessen survey fatigue and capture the feedback helpful for ESG materiality  
   • One other thing to consider is trying to obtain materiality inputs via desktop research-many analysts, investors and NGOs are very public about their expectations of companies and this can allow a company to capture this input for materiality without having to send a survey
3. I've seen some companies use media scans as another source of potential topics, which can also be helpful as you think about what might have changed-even if your business model didn't. You might have these tools already available within your organization thorugh the Communications team, it's worth checking! This would ideally capture any trending topics that appear in the media generally, within an industry, or even for a particular company.
4. Your idea is right on for response rates, having the executive in charge of that relationship reach out (or reaching out via a message signed by them) is ideal. The CEO and CSO might sign the reminder to employees, the CEO and head of IR might sign the reminder for investors, etc.
5. @Keath Harris might be able to share what we used but generally they are fairly short and sweet-there is an example on survey monkey (HERE) and Workiva has a posted template that shows very similar questions (HERE)

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Mark Mellen
ESG SME
Workiva
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Original Message:
Sent: 03-27-2023 05:51 PM
From: Teresa Odom
Subject: Materiality Assessment

We are embarking on a process to update our stakeholder materiality assessment (MA) for use in our 2023 Sustainability Report. By way of background, we are a relatively young, public company (IPO in 2017) and have conducted only one previous MA for which we used a third-party consultant.  We want to update our MA this year and bring the process completely in-house. 

That said, may I ask for any feedback you may have on any of the following ideas:

(1) Preferred survey platform (Survey Monkey, Survey Gizmo, etc.) and why? We currently anticipate asking the respondents to rate each response across a range (Highly Agree to Highly Disagree) as well as to rank the material topic in order from most significant to least significant for our business.

(2) Process for identifying stakeholders to include - How many stakeholders (i.e., debt & equity holders, employees, customers, suppliers, regulatory agencies, etc.) should we aim for to constitute a 'valid' sampling? For example, with >1,500 employees, should we engage all of them or use a randomly chosen sample set as a proxy? 

(3) We have the material topics we identified in the first MA which we settled on after reviewing (i) stakeholder feedback during the period, (ii) peer company disclosures, and (iii) sustainability reporting frameworks. Any other potential sources of topics we should consider which could impact our identification of material topics? Is it reasonable to assume that if our business model hasn't changed since IPO, then we should not expect to see a significant change in our material topics?

(4) Any tips or tricks to improve response rates? For instance, have you seen better success on response rates if your original request for survey participation was accompanied by a note from the CEO, CFO, or CSO? 

(5) Would you be willing to share samples of your company's MA questionnaire?

Thanks in advance for any feedback!

------------------------------
Teresa Odom
Vice President-ESG & Sustainability
Diversified Energy Company plc
------------------------------

Hi Teresa, 

I'm happy to provide a little bit of insight into what Workiva has done. We completed our first ESG materiality assessment in 2021. We also had the help of a third-party for that initial assessment .  At the end of 2022, we decided to do a materiality "pulse check". This was not a full scale materiality assessment, but we wanted to see how certain stakeholders' perspectives  have shifted. I'll focus on this pulse check process as we also wanted to bring it in house in preparation for a more holistic assessment in the future.

1. For our internal assessment, we used the Workiva platform. Our implementation team was able to provide a spreadsheet based template to populate our issues into. For this process we kept it simple and just asked for an order rank on the ESG issues in relation to Impact on Business and Impact on Society. For external assessment, we plan to use Qualtrics as it is currently available for access within the company and was easy to provision to our Comms team for use (we also have SurveyMonkey, but there were concerns with access to confidential information housed there). We'll then export responses out of Qualtrics and import into the Workiva platform to aggregate them with other responses. The weighting and calculation all takes place within the spreadsheet, and then ratings are linked into a heat map chart/presentation.

2. For the pulse-check, we tried to survey a similar group of stakeholders identified in our initial assessment. 

1. Internally, we leveraged our executive level ESG Task Force for our stakeholder assessment. We thought it best to use a smaller, focused group that is already familiar with ESG and topics material to the business to make the assessment.

2. Externally, we plan to leverage our ESG Advisory Board (~4 people) to give an external perspective on impact.

3. We also added peer alignment, raters and rankers, and framework alignment into our assessment. 

3. Generally, I would say that you wouldn't expect to see significant changes in material topics in terms of them being removed or others added. We conduct our pulse check to see how certain issues have shifted given internal factors or market/industry changes. While we didn't see any material topics added or dropped, we did discuss consolidating certain issues within the same category as they started to lump together on the heat map, and it made sense to do so given the maturing of our philanthropic initiatives.

4. We did not include a letter specifically, however, we engaged with our ESG Task Force early and often during our meetings to talk through expectations of the assessment.

5. As mentioned, our pulse check exercise was not a full assessment, and so we didn't have a formal questionnaire. We chose to keep it simple and just do an order rank of material issues. The only added question we had was "Are there other ESG issues the business should consider?". Resources on the Workiva Marketplace that Mark shared are a great starting point. I am also happy to connect further regarding our process if it would be helpful!

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Keath Harris
ESG Reporting & Operations Senior Manager
Workiva
------------------------------

Original Message:
Sent: 03-27-2023 05:51 PM
From: Teresa Odom
Subject: Materiality Assessment

We are embarking on a process to update our stakeholder materiality assessment (MA) for use in our 2023 Sustainability Report. By way of background, we are a relatively young, public company (IPO in 2017) and have conducted only one previous MA for which we used a third-party consultant.  We want to update our MA this year and bring the process completely in-house. 

That said, may I ask for any feedback you may have on any of the following ideas:

(1) Preferred survey platform (Survey Monkey, Survey Gizmo, etc.) and why? We currently anticipate asking the respondents to rate each response across a range (Highly Agree to Highly Disagree) as well as to rank the material topic in order from most significant to least significant for our business.

(2) Process for identifying stakeholders to include - How many stakeholders (i.e., debt & equity holders, employees, customers, suppliers, regulatory agencies, etc.) should we aim for to constitute a 'valid' sampling? For example, with >1,500 employees, should we engage all of them or use a randomly chosen sample set as a proxy? 

(3) We have the material topics we identified in the first MA which we settled on after reviewing (i) stakeholder feedback during the period, (ii) peer company disclosures, and (iii) sustainability reporting frameworks. Any other potential sources of topics we should consider which could impact our identification of material topics? Is it reasonable to assume that if our business model hasn't changed since IPO, then we should not expect to see a significant change in our material topics?

(4) Any tips or tricks to improve response rates? For instance, have you seen better success on response rates if your original request for survey participation was accompanied by a note from the CEO, CFO, or CSO? 

(5) Would you be willing to share samples of your company's MA questionnaire?

Thanks in advance for any feedback!

------------------------------
Teresa Odom
Vice President-ESG & Sustainability
Diversified Energy Company plc
------------------------------