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Activity TGa5.2
Objective
Impacted Party Materiality
Concept
Transformational Governance
Activity Type
Driver
Rating System Application
Conduct impacted party materiality assessment on the operating asset
Scope
The Owner shall conduct an impacted party materiality assessment using impacted party feedback from Activity IAa2.2 use findings to address material issues, ensuring alignment with impacted party concerns and expectations. Assessments related to pre-construction or construction phases fall outside the purview of this activity.
Requirements
- 01.
Identify material issues for the project using a standardized materiality assessment framework (see Guidance below).
- 02.
Establish and implement a protocol for addressing material issues in decisions and activities for the project.
Indicators
The performance indicator is the percentage of addressed material issues. The context indicator is the number of material issues identified.
To calculate the performance indicator:
To calculate the performance indicator:
- Determine number of material issues or topics identified.
- Determine number of material issues addressed.
- Calculate the percentage of addressed material issues.
P = (MI / N) × 100
- P =
- percentage of addressed material issues
- MI =
- total number of material issues addressed
- N =
- total number of material issues identified
Scoring
Outcome threshold
The target outcome threshold is 75% of material issues are addressed.
B + I Certification
| Points | Percentage of Addressed Material Issues |
|---|---|
| 1 point | 51% percentage of addressed material issues |
| 2 points | 75% percentage of addressed material issues |
O + M Certification
| Points | Material Issues Addressed |
|---|---|
| Required | must achieve Outcome Threshold |
Documentation
- 01.
List of financial, human, and material resources utilized for this activity.
- 02.
Shareholder and impacted party list.
- 03.
Materiality map with each party's associated interests, influence levels, and impacts.
- 04.
Written protocol for the process of considering impacted party interests in decisions and activities.
- 05.
Communication log of all impacted party feedback, date of contact, date of response, and response.
Guidance
On creating a materiality matrix to determine material issues
The following step-by-step guidance allows you to create a materiality matrix and identify material issues.
- Determine importance of likely impact (issue) to impacted parties by:
- Conducting interviews, focus groups, or surveys with impacted parties
- ask them to categorize each issue based on its importance to them as Low, Medium, High, Severe. If you do not have direct importance data, tally the percentage of reports/responses for each issue and use the following scale to rate them: 1-15%=Low; 16-40%=Medium; 41-70%=High; 71%+=Severe.
- tally the responses to determine the consensus category for each issue
- record in the Ratings Table (see example below)
- Determine the impact of the issue to the project by conducting an internal assessment:
- engage with internal experts, management, or teams to categorize the potential impact of each issue on the project (consider factors like potential financial implications, reputational risks, and operational effects)
- ask them to categorize each issue based on the impact to the project (Low, Medium, High)
- tally the responses to determine the consensus category for each issue
- record in the Ratings Table (see example below)
- Plot the matrix by:
- creating a grid with the x-axis divided into sections labeled 'Low', 'Medium', 'High', representing impact to project and y-axis representing importance to impacted party (see example grid below).
- place each issue on the matrix based on the consensus category from impacted party feedback and internal assessment
- Determine and prioritize material issues by identifying issues:
- in the red arc as high materiality and represent your highest priorities
- issues in the yellow arc as medium-high materiality, which are of high importance or impact to one group but not the other
- issues in the green arc as low materiality, which are of lesser priority but should still be monitored.
[Example Rating Table and example materiality grid image follow in the source PDF — see pages 124, 127.]
Referenced Source
- ISO 26000:2010, Guidance on social responsibility (2021)
- UN Guiding Principles on Business and Human Rights (2011)