unsplash-image-q10VITrVYUM

Let’s Try This In 2022: Put People At The Center Of Materiality

January 4, 2022

Blogs

 

By Jesse Nishinaga

(Warning: Spoiler alerts for “Don’t Look Up” follow below.)

“We really did have everything, didn’t we?” asks Dr. Randall Mindy, rhetorically.

Dr. Mindy, the lead character played by Leonardo DiCaprio in the new satirical science fiction film, Don’t Look Up, was right in sentiment. But I wondered this: If the character (literally!) had another 7 words, what would have been those next 7 words?

Would it have been: “Well, maybe not everyone really had everything.”

The year-end period has always been a good time for me to reflect on the past year and to think about what priorities to pursue in the new year. At Article One, we continued to make major strides across many aspects of our work throughout 2021, whether it was scaling our core business and human rights work to more companies and industries or helping ensure emerging technologies are being developed ethically and responsibly through our ever-expanding responsible innovation work.

I was also very excited about our newest pillar—our work to drive sustainability by putting people at the center of the ESG agenda. Over the course of 2021, we embarked on a series of projects to connect human rights to ESG, and vice versa. For example, my colleague’s work with PMI on climate justice was a perfect example of how we can help companies mitigate the environmental and human impacts of climate change.

We also worked with several companies to conduct human rights saliency and ESG materiality assessments at the same time. We appreciated the opportunity to conduct these assessments simultaneously, and we learned a great deal about how they can be complementary and mutual reinforcing processes. By the same token, we learned that we could do more to maximize the benefits of conducting these assessments simultaneously.

This is where I think we have more opportunities for innovation in our field.

So, to do more, here are a few ideas that I would like to expand upon in 2022. Unless you’re a materiality aficionado (nerd) like me, please bear with me here:

  • Replace “importance to stakeholders” with “importance to rightsholders” (or, perhaps, make the latter a third axis). In my many years of conducting ESG materiality assessments, the “importance to stakeholders” axis has always been a catchall aimed at encapsulating the outside stakeholder world’s expectations of the company in question (in terms of sustainable and responsible development). But many of us in the field have asked ourselves this: At the most basic level, aren’t all ESG issues, including environmental issues, pretty much human issues, too? Similarly, aren’t all or most governance issues that we typically see on any given ESG materiality map basically issues or approaches that impact people, positively or negatively? I posit that a more explicit lens that puts people at the center of all material ESG issues will help companies prioritize these issues with even more clarity.

  • Use the saliency criteria to assess “importance to rightsholders.” The UN Guiding Principles should still be the main methodology to analyze “importance to rightsholders.” Using the example of climate change again, we can hypothesize pretty quickly that a whole host of rights are likely in play, from the right to non-discrimination to the right to an adequate standard of living. We can also surmise pretty quickly, using the saliency criteria, that the degree of risk or impact on rightsholders will likely be “high” in many situations. Such analysis can provide companies with an added layer of rationale for placing climate change high(er) on the company’s list of priorities.

  • Frame ESG stakeholder engagements around impacts on people. Conducting stakeholder engagement is one of the most important steps in the saliency and materiality assessment process. These engagements, particularly internal engagements, which are typically interviews with business leaders and subject matter experts in key functions across companies, help us understand how different issues may be significant to them and their functional areas. Of course, we cannot expect that these individuals will be ESG experts or human rights experts, so framing these engagements around these issues is not always the best approach. However, we can expect them to be “expert” in describing how their business activities and business decisions might impact people. I was once a corporate planner at a global apparel company myself and every time I made a last-minute order or asked for fast delivery, I had a feeling someone in the supply chain would be impacted, potentially adversely. I posit that framing these internal engagements around how business activities and business decisions could impact people is a more productive conversation.

2021 was a tumultuous year for many clear reasons: the global pandemic, more frequent extreme weather events, rising authoritarianism, and the spread of hate in the online and offline world, just to name a few. There are many critical challenges out there, and we can all play some part in addressing them. I’m very excited about the work that Article One will do in 2022 to play its part.

As Kate Dibiasky, Jennifer Lawrence’s character in the same film, poignantly says, “I’m grateful we tried.”

Yes, all we can do is try, and I feel like I’m one of lucky ones to be in a position to feel this way. Not everyone has everything like I do, which is why I believe we need to put people at the center of everything we do.