Making Materiality Work: How to Prioritise What Really Matters

Materiality assessments are everywhere—but unless they guide real decisions, they risk becoming static checklists instead of strategic tools.

Materiality assessments have become a staple in ESG strategy — often treated as a required step in reporting processes. But done poorly, they’re just another matrix on a slide deck. Done well, they’re a strategic lens: helping organisations focus on what truly matters to their business, stakeholders, and future value. The challenge isn’t just identifying issues — it’s making materiality actionable, dynamic, and integrated.

Materiality Has Evolved — But Practice Hasn’t Caught Up

Most companies still approach materiality as a one-time exercise to tick off for reporting. They rely on static surveys, internal assumptions, and legacy frameworks — producing generic results that say little and guide even less.

This conventional view — where materiality is framed only as what matters to external stakeholders — misses half the picture. And in today’s ESG landscape, it’s no longer enough.

Understanding the Two Lenses: Conventional vs. Double Materiality

Conventional materiality, grounded in financial materiality, focuses on how ESG issues may impact a company’s performance or risk exposure. This is the foundation of most investor-focused reporting standards (e.g. TCFD, SASB).

But as stakeholder expectations grow, the lens is widening. Enter double materiality — a concept at the heart of global frameworks like the EU’s CSRD and the GRI. It asks not only “how does ESG impact the business?” but also “how does the business impact the environment and society?”

Double materiality captures both financial and impact materiality. And for Southeast Asian companies — particularly those with supply chain exposure, regulatory scrutiny, or brand-sensitive markets — ignoring either dimension risks blind spots and missed opportunities.

The Risk of Static Matrices

A materiality matrix from two years ago may already be outdated. The pace of change — climate risks, biodiversity concerns, human rights in supply chains, evolving standards — demands agility. Yet many companies are still referencing materiality maps that no longer reflect current realities, let alone forward-looking risks.

What’s needed is a shift: from static assessment to dynamic materiality — an approach that integrates business strategy, stakeholder signals, and real-time data into an ongoing process of prioritisation.

To make materiality a meaningful tool — not just a compliance step — organisations should rethink how it’s scoped, surfaced, and applied. Here are four best practices we apply in our work with clients:

1. Start With the Business, Not Just the Survey

Rather than treating materiality as an ESG task, embed it into enterprise risk and strategic planning. Anchor the process in how environmental and social factors intersect with revenue, cost, and reputation — not just reporting metrics.

2. Apply the Dual Lens

Use double materiality as a guiding framework. Assess both inward (how sustainability issues affect the business) and outward (how the business affects people and planet) dimensions. This produces a richer, more credible materiality map — one that resonates across investor, regulatory, and societal expectations.

3. Make It Stakeholder-Informed, Not Stakeholder-Led

Stakeholder input is critical, but it shouldn’t drive the process blindly. Combine external signals (e.g. investor insights, employee feedback, policy trends) with internal understanding (e.g. operational data, strategic goals) to arrive at a balanced view.

4. Link Priorities to Action

Too often, companies identify material issues but fail to allocate resources or set KPIs accordingly. Make materiality the front end of ESG decision-making — informing budget, governance, targets, and reporting.

Let’s Continue the Conversation

Materiality is more than a matrix — it’s a mirror. When done right, it shows you where to focus, where to lead, and where the real risks and opportunities lie.

Is your organisation ready to make materiality work?

Let’s explore how a dynamic, decision-focused materiality process can sharpen your sustainability strategy and unlock real value.

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