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We've entered the season of sustainability reporting, when companies release their latest summary of achievements and provide a peek into what's on the horizon. What typically gets less attention in these reports is how a company focuses on certain issues and, more importantly, how they develop their sustainability strategy.
In many cases, companies use a materiality assessment to better understand the intersection of topics most important to stakeholders - inside and outside the company - as well as issues influencing future business success. This approach - considered best practice - highlights marketplace trends, uncovers emerging global issues and guides a company's sustainability strategy, goals and reporting.
UPS has conducted regular materiality assessments since 2011 in partnership with BSR (formerly Business for Social Responsibility), a global nonprofit organization with expertise in sustainability and stakeholder engagement. UPS is headquartered in the U.S. but operates in more than 220 countries and territories.
As we establish our sustainability goals and review and renew them, it's important to take a truly global view. Yet, by viewing the assessment through a predominantly U.S. lens, we missed crucial issues in communities outside the U.S.
With that in mind, we looked outward and conducted separate materiality assessments in 2015 for five key business regions, including Europe, our largest market outside the U.S. and one of our biggest growth markets.
The exercise affirmed the local importance of some global issues we've been working on for decades, such as mitigating climate change and reducing emissions. It also illuminated new topics of regional importance. For instance, air pollution and congestion are especially important in Europe, where cities are getting more crowded every day.
Supplier engagement also surfaced as a key topic since outside service providers - vendors who pick up and deliver packages on behalf of UPS - constitute a large portion of our operations in Europe.
The insights were instructive as we developed a regional sustainability strategy to address key issues in Europe and around the world. Some of the initiatives include:
These are just a few examples of how the materiality assessment can help companies prioritize resources and address topics most important to the business and stakeholders.
These findings illustrate how a sustainability strategy can create the most value as a company navigates the complex landscape of global and local issues.
Companies no longer have to guess about whether they're doing the most good. It brings certainty to an uncertain process while improving the communities where we live and do business.
That's a strategy worth getting behind.
Longitudes explores and navigates the trends reshaping the global economy and the way we’ll live in the world of tomorrow: logistics, technology, e-commerce, trade and sustainability. Which path will you take?