Focus on Materiality to Find Your Company’s Purpose
The events of the past year in Wisconsin and around the world have given us a lot to think about. Our lives, communities and workplaces have radically changed. The global pandemic, devastating climate catastrophes, unprecedented social upheaval, rise of misinformation, and huge economic challenges have shown us that business success is linked with social and environmental developments, not separate from them.
Many brands rose to the moment and succeeded in leading with transparency and purpose, centered around their values and the issues that are most important to their stakeholders and for their business.
Here at Kane, we’ve also thought deeply about what the events of the past year mean for our business and for those closest to us - our team, our clients, our suppliers and our community. These reflections led us to begin developing our first corporate citizenship and sustainability strategy and to pursue B-Corp certification.
We believe by taking a close look at how our business creates value for our stakeholders, we can build strong relationships that lead to lasting positive outcomes for our business and for those we work with. And there’s lots of evidence out there that shows doing good for people and the planet is also great for business.
Trust rules
According to Edelman, “Brands have entered a brave new era, where trust rules. People expect businesses to address and solve their personal as well as society’s challenges. The heightened expectations of business bring CEOs new demands to focus on societal engagement with the same rigor, thoughtfulness, and energy used to deliver on profits.”
Stakeholder activism is on the rise
Investors are paying attention, too. The global pandemic may prove to be a major turning point for sustainable investing as the pandemic alters society’s values. According to Silvia Wegmann, Head of Sustainable Investment Solutions
at Julius Bär “Sustainable companies have proven to have more innovative solutions to meet today’s sustainability challenges and thereby support the transformation of entire sectors.”
Consumer attitudes are changing
The COVID-19 Barometer study by Kantor The COVID found up to 27% of people aged 18 to 34 they surveyed feel brands should play an active role in making the world a better place. Consumers across all age groups are spending more on sustainable products and services. A recent analysis by BCG found globally 46% of consumers are willing to forgo preferred brand names in favour of eco-friendly products.
Talent decides
Another trend companies are paying attention to is an increased interest by top talent, especially millennials and Gen Z, to work for employers and in sectors that have sustainable business models.
Our world is hyper-transparent
Information travels instantly, social movements can appear and scale rapidly, and companies are being asked to provide more and more data to investors and consumers on an array of topics. This-hyper transparency is becoming the norm and it’s creating an array of legal, branding, talent and other challenges for companies.
Where do you start?
The challenges and the opportunities are vast. Businesses only have so many resources. For companies beginning to think about the relationship between their business strategy, their corporate reputation, and social and environmental issues, it can be daunting to know where to start.
Focus on what matters for your business and your stakeholders
Dig deep and start with an assessment of the company’s most important “material” issues. Materiality is not new. “It is a concept that defines why and how certain issues or information are important for a company or a business sector. At its core, materiality is an accounting principle that defines which information is decision useful. Materiality creates a foundation for a corporate citizenship and sustainability strategy that is embedded in a company’s business strategy.
Defining Kane’s material issues as the basis for developing our corporate citizenship and sustainability strategy was such an enriching experience that we wanted to share the process we followed.
Identify internal and external stakeholders
Ask the question - who are your stakeholders - internally and externally? And what matters to them?
For Kane, it was clear our clients, our employees, and our suppliers are essential stakeholders. In addition, we identified several community stakeholders to speak with about emerging and future trends as well as potential positive value Kane, as a growing public relations, brand and marketing company, can create for our community beyond philanthropy.It’s important to keep to the same list of topics when talking to different stakeholders in order to gain a consistent picture about your company’s potential impact, and to measure importance.
We conducted interviews using a structured questionnaire to gain qualitative data and an online survey to collect quantitative data that also allowed us to rank and prioritize topics.
One of the most unique insights we gained is the value government places on business-government partnerships that address pressing community issues such as getting out the vote and public-health. This is not about corporate philanthropy, but rather about working together in partnership to communicate important messages to citizens and to encourage action that makes our communities healthier and more attractive places to live and work. Our stakeholders felt Kane’s major contributions could be in areas such as building equity, diversity and inclusion in the creative industry and championing women and entrepreneurship.
Draw from international standards
Organizations such as Global Reporting Initiative (GRI), the Sustainable Accounting Standards Board (SASB), the International Standards Organization (ISO) and the International Integrated Reporting Council (IIRC) as well as the UN with its Sustainable Development Goals (SDGs) have decades of experience producing guidance and standards for managing and reporting on material issues. There is no need to reinvent the wheel.
As a public relations, branding and marketing firm, we found SASB’s Materiality Map particularly useful because of the convenient overview it provides of material issues across different comparable industries at one glance. We also found Datamaran’s 2021 Topics List an excellent overview of emerging material issues.
Conduct industry research across a range of channels
Industry peers can be a rich source of information and inspiration about material issues that matter most for the industry. Benchmarking against your direct peer group, the sector as a whole, industry leaders and regional peers can also be eye-opening. A benchmarking exercise also helps position the company in relation to peers and can serve as a useful baseline from which to set targets and craft the company’s strategy.
We reviewed the corporate citizenship and sustainability approaches and priorities of Kane’s direct peer group in Milwaukee, in Wisconsin, and also across the U.S. to understand the issues our peers are prioritizing, seek inspiration and to help us define our priorities. We also reviewed industry literature and tuned into diverse webinars and podcasts by industry experts and publications such as PR Week.
One of the main insights we gained is while many of our peers are doing an excellent job helping their clients communicate about their social and environmental programs and launching fabulous campaigns, few of our peers are actually communicating about what they are doing to ensure their businesses are operating at the highest standards of corporate citizenship and sustainability. In fact, we hardly saw a mention by any of our peers about their specific, measurable corporate citizenship and sustainability vision, goals and plans. Edelmann is the best exception and the company has a world-class corporate citizenship program in place.
Social listening
The fast-changing and dynamic voices of the public and the media can sway opinion and give rise to new social movements, almost overnight. We felt in an increasingly digital age, companies can’t only rely on regulatory reporting criteria and predefined lists to determine the material issues which matter most.
To ensure we leave no stone unturned in defining our list of high-priority material issues, we turned to our social listening skills to assess diverse voices across a range of channels. Two issues relevant to Kane’s business that rose to the top are trust and misinformation.
Analyze the insights
With all of this information in hand, it's time to sit down and analyze the insights. It can be helpful to review the results collectively, taking a look at the rankings for each indicator per, for example, stakeholder group (e.g. internal vs external stakeholders, management vs employee) or other factors such as value creation for the company and risk.
This time came for us in January. We brought together Kane’s leadership team for a series of interactive workshops - all virtual - making use of the online tool Miro to brainstorm and work interactively to prioritize Kane’s material issues.
In addition to reviewing the issues that matter most to our external stakeholders and to Kane, we spent time reviewing each issue in terms of the opportunity it represents for Kane to generate value for the business and for our stakeholders. We also reviewed each issue from a risk perspective, assessing the risk to the business and for our stakeholders if we don’t prioritize this issue.
The results of these discussions have given Kane an important perspective on where the business needs to allocate resources to bolster some ongoing practices, change or stop others, and create entirely new ones.
For example, client success ranked as the top material issue in terms of both corporate value creation and corporate risk. While this is not at all surprising for Kane as a strategic communications agency, it underlines for us that client success is where we need all hands on deck and where we want to prioritize investment in innovation and continuous value creation.
Skills and performance also scored at the top of our list together with equity, diversity and inclusion. One thing we learned is while we can quickly invest in ensuring the skills of our team are cutting-edge, we will struggle to build a top-notch diverse talent pool because of the overall lack of diversity in the creative sector, not just in Milwaukee, but across the United States. As a result, accessing hidden, diverse talent pools and building the next generation of diverse creative sector leaders is also a strategic objective of Kane’s corporate citizenship and sustainability strategy.
For more information on Kane’s materiality assessment and our corporate citizenship and sustainability strategy, contact us. We’re happy to share what we’ve learned and how it may help your business or organization!
