What is the purpose of a materiality analysis?
Materiality analysis is an approach to identifying critical economic, environmental and social issues, which may either reflect a significant impact on the company’s business performance or substantively influence the assessments and decisions of its stakeholders.
Michelin’s objectives in undertaking regular materiality analyses are to:
- Identify and prioritize critical issues
- Inform the Michelin Performance and Responsibility (PRM) approach
- Engage Michelin’s stakeholders
- Inform Michelin’s approach to the disclosure of information on sustainability.
The Michelin approach to materiality: process and tools
Informed by the Global Reporting Initiative standards and Michelin’s corporate systems for risk identification and assessment, the analysis was conducted according to the following steps:
- Select the issues to assess, based on overall trends (demographics, transportation, consumer spending patterns, growth or decline in resources, etc.), benchmarks, data and features specific to the transportation industry, and issues identified in the previous matrix.
- Identify the external stakeholders in each country.
- Stakeholders and Michelin employees judge the selected issues.
The Michelin materiality matrix
The matrix plots the material issues against the rising level of societal concern (vertical axis) and the rising importance on Michelin (horizontal axis). All issues represented on the matrix are considered material to Michelin.
This new matrix revealed:
- a general convergence among external stakeholders and Michelin employees concerning the relative importance of the various issues;
- the importance, for a company like Michelin, of getting involved in every aspect of sustainable development, including the environment, human rights, relations with local host communities and governance;
- the role that Michelin is expected to play in building and promoting sustainable mobility;
- the Group’s responsibility in its operations and in the growth and development of its employees.
Michelin performance and responsibility: the six 2020 ambitions
The material issues identified represent the sustainability challenges that matter most to Michelin’s stakeholders and to Michelin’s business performance. The six Performance and Responsibility ambitions for 2020 were designed to ensure that Michelin’s sustainability approach addresses its most material issues.
With all business processes, the Michelin materiality approach is reviewed to identify opportunities for improvement. While every effort has been made to ensure the accuracy of the assessment, some subjectivity is inherent in materiality assessments.