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Materiality matrix

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A materiality matrix is a framework to detect what is important for the organization’s strategy and for its different stakeholders.  The purpose is for companies to improve the focus of sustainability actions by identifying opportunities and managing risks.  A materiality matrix can be useful across industries in the private sector.

The output of this tool is a materiality map in word format.

A materiality matrix is constructed through qualitative analysis, quantitative assessment and discussion to understand what is material to both the organization’s strategy and it’s most important stakeholder groups.

To complete a materiality matrix you need an understanding of how the firm currently creates its value and its strategy for future operations.  You also need to be able to identify the important stakeholders of the firm and be able to obtain representative opinions.

A materiality matrix requires the use of quantitative and qualitative methods to ascertain key stakeholder perspectives. Ideally these stakeholders would be organized to meet with the company for in-depth discussion. In addition the attendance of the Chief Executive Officer is encouraged to provide a clear overview of the company and its strategy.  A blackboard with stick notes is practically useful.

This tool can be used in the group business case assignment in the Corporate Sustainability and Green Cities module.

 

Additional information:

Eccles, Robert G., George Serafeim, and Asun Cano-Escoriaza. "Developing the Materiality Matrix at Telefónica." Harvard Business School Case 413-088, December 2012. (Revised October 2013.)

Corporate examples:

http://about.puma.com/en/sustainability/stakeholders/materiality-matrix

http://www.pwc.co.uk/corporate-sustainability/materiality.jhtml