Materiality assessment
To ensure that our sustainability work concentrates on the most material topics, we update our materiality assessment regularly. In 2018, we made a substantial update by applying a new data-driven approach, provided by Datamaran. In 2019, we supplemented this assessment. We were already aware of the topics that are material for Huhtamaki. What we wanted to do was to update the underlying data sources with more recent ones and to increase the number of stakeholder surveys included, to see how the respective order among the topics had changed over time.
We included in the assessment news, hard law and soft law, tweets, corporate reports of 40 companies identified as main peers, customers and suppliers, and sustainability-related standards chosen according to their relevance for Huhtamaki’s business sector. All data is fully traceable to the original source. We also sent surveys to relevant external and internal stakeholders to supplement the assessment.
Materiality matrix
The matrix was built as follows:
- the X-axis represents industry view, including internal stakeholder surveys and corporate reports
- the Y-axis represents external view, including external stakeholder surveys, online news, regulations, Twitter and international standards
The picture above represents the Huhtamaki materiality matrix. The materiality assessment showed that material topics for Huhtamaki have remained largely the same during the years. The assessment reaffirms that the choices made in the Packaging for Good program are valid and that Huhtamaki is focusing its sustainability efforts on the right topics.
Datamaran tracks around 100 environmental, social and governance (ESG) topics from different data sources. In 2018, we assessed the importance of all of these 100 topics to identify the ones which were of medium or high importance for Huhtamaki, the industry and different stakeholders. Eventually the number of such topics was reduced to 15.
In 2019, we focused the update of the materiality assessment on these 15 topics, to update the underlying data sources and to increase the number of stakeholder surveys included. The following Datamaran sources were analyzed:
- Corporate reports of 40 companies identified as main peers, customers and suppliers. The reports included annual financial reports, SEC filings (10-Ks and 20-Fs), and sustainability reports published in 2019 or 2018.
- 1,662 news articles published between May 2019 – October 2019.
- Hard law and soft law which either contain corporate disclosure requirements or are essential to the understanding of the current regulatory development. These included sector-free regulations, sector-specific regulations as well as expected regulations.
- Over 250 million tweets in Twitter published between May 2019 – October 2019 that mentioned the tracked ESG topics.
- Sustainability-related standards, chosen according to their relevance for Huhtamaki’s business sector: Sustainability Accounting Standard Board (SASB) standard for the containers and packaging industry, the GRI Food Processing sector standard (as a proxy for food packaging), the UN Sustainable Development Goals, and the RobecoSAM Dow Jones Sustainability Index
Additionally, we sent surveys to relevant external and internal stakeholders. In 2019 we widened the scope of external stakeholders to include customers, industry associations, investors, suppliers, NGOs and thought leaders. They were asked to rate the 15 topics based on importance. Internal stakeholders were employees of Huhtamaki, who were asked to rate the topics based on their importance to the company. We managed to more than double the amount of responses received from both groups compared to the previous year. Altogether we received answers from 44 external and 43 internal stakeholders.
By using computational linguistics that made it possible to quantify qualitative information, each of the tracked ESG topics received a score retrieved for each source. A specific weight was applied to the scores to refine the results. Finally, the topics were ranked by importance in the materiality matrix.