How Companies Like Nestlé Map the Things That Matter Most
A Surprisingly Simple Summary of the ‘Materiality Matrix’
Every year, Nestlé in the United States releases a Creating Shared Value report. Now, while the report may never make a bestseller list or be your next compelling night time read, it is essential tool for us to outline our commitments and progress across a range of issues from nutrition to human rights, sustainability to responsible sourcing. Last year the report covered 40 commitments in total, each with a variety of component objectives…yes, it’s a lot!
While the report is the product of collaboration from many different parts of the company, I’m the lucky person who serves as the maestro, gathering information and putting it all together. I can personally attest that the process of gathering and organizing this vast array of information can be daunting. If simply reporting on this complex infrastructure is a challenge, imagine trying to establish the priorities the company should take on as core commitments in the first place.
To do this, Nestlé uses a tool we call the materiality matrix. The matrix is basically a map which we use to navigate the concerns and causes that are most important to stakeholders like NGOs, investors, health experts, and suppliers. This is what that map looked like in 2014:
Here’s an example of how it works: when we set out trying to decide on our objective in the upcoming years, we contact stakeholders who are experts in different areas, like climate change or food waste. Experts like NGOs in each area get follow-up questions specific to their relevant issues. They may respond saying that their main priority is climate change, with food waste as a slightly lesser priority which is still of concern.
If these concern levels are consistent across the range of stakeholders with expertise in these two areas, we’ll know to place climate change as a higher priority on the materiality matrix, but still maintain an additional focus on food waste.
We then map the impact these issues have on Nestlé. Climate change has a huge impact on Nestlé because global weather patterns affect crop yields and infrastructure and have an impact on the work of farmers, suppliers and distributors. Working towards solutions is a matter of major concern. Food waste is a significant but not major concern, with a slightly lower priority for stakeholders.
Going back to the 2014 map, you can see where these two issues are placed accordingly:
The levels of concern on the materiality matrix are a great guide for us as we prioritize and plan. Once the data is gathered, we apply context.
For example, women’s empowerment appears low on the above matrix, but other priority issues like rural development and maternal, infant, and young child nutrition are intrinsically linked to women’s empowerment. The matrix can’t tell the full story on its own, but can give us a starting place as we dive into solutions.
Experts at Nestlé in the United States then work through all this information, and lay out a plan of action, and estimate costs and time-frames needed for success. In this way, the matrix feeds our commitment plan, and shapes Nestlé’s future and investments.
That’s a very quick rundown of how this tool works. There is so much exciting work going on at Nestlé in the United States, it can seem like it’s impossible to unpack. But the materiality matrix, as complex as it may sound, is actually a great way to capture and streamline our shared priorities.
You can find our latest report here. If you do want to read our latest update, I’m working right now (aided by much Nescafé coffee!) to get our 2016 report out to you. Keep an eye on Nestlé social media for the upcoming release in May!