In this process step, the entire value chain and the associated stakeholders of your company are recorded in preparation for the double materiality analysis.
The scope of the materiality analysis takes into account the perspectives of overall value creation and all affected stakeholder groups (see IG Materiality Assessment para. 2; IDW module statement ESRS 1 M1.2 para. 4).
In order to identify the negative as well as positive impacts and financial risks and opportunities (IROs; known as impacts, risks and opportunities) on the environment and society, it is therefore necessary to have an in-depth understanding of one's own economic activities along the entire value chain (VAC) and how these are related to upstream or downstream economic activities.
The following procedure should be observed:
Presentation of your own economic activities
Firstly, enter all of the company's economic activities as defined by the NACE codes in the company profile. To enter further economic activities, click on the + symbol. You will find an overview of all NACE codes under the following link: https://nacecode.de/
In the next step, you enter all relevant upstream and downstream economic activities as well as those of the company's own operations (1st arrow in the figure below) in the pre-analysis tab. Upstream or downstream economic activities are those that indirectly contribute to the company's added value. This includes, for example, the production of intermediate products (raw materials) that are produced before the actual end product as part of value creation and are either processed further by the company or sold directly. If available, enter the corresponding NACE code in the description.
If the IRO profile is the same, these activities can also be summarised. This is the case, for example, for similar types of business, products/services, geographical areas, etc. (ESRS 2 SBM-1; IG Materiality Assessment para. 69).
(ESRS 2 SBM-1; IG Materiality Assessment para. 69)
Overview of the most important stakeholder groups
The stakeholder analysis is necessary to gain a comprehensive understanding of the context of the organisation and then to include the perspective of the most important stakeholder groups in the identification of the IROs (ESRS 2 SBM-2; ESRS 1.24; IG Materiality Assessment para. 71, 197-203; IDW module pronouncement ESRS 1 M1.2 para. 4-16, 22).
In addition to the users of sustainability reports, affected stakeholder groups - or stakeholders in the language of the ESRS - are also the persons or groups whose interests are or could be affected by the company's business activities along its entire value chain (ESRS 1.22). These include, for example, the company's own employees, but also those in the value chain, as well as suppliers, business customers and end consumers.
You should therefore enter the affected stakeholder groups in the second tab ‘Stakeholder analysis’ (2nd arrow in the illustration). To do this, click on the + symbol and select your stakeholders. Continue by clicking on save and marking the point(s) in the value chain to which the stakeholder group is assigned.
In the third tab (3rd arrow in the illustration), you should describe your stakeholder groups in more detail. The previously selected stakeholders appear automatically as a list and you can fill in the remaining columns accordingly.
Further assistance
The pre-analysis is about understanding the extent to which business relationships and relationships with other stakeholders influence your company's actions.
A case study serves to illustrate this:
A company that manufactures electric vehicles obtains cobalt for its batteries from a supplier in the Democratic Republic of Congo.
In this case, the stakeholders are the supplier, the supplier's employees, the affected communities around the mine, trade unions, industry associations, etc.
You then categorise these stakeholders according to the value chain to get a complete picture of all your relationships and linkages.
For a better and deeper understanding of the relationships with your stakeholders, use the third tab. Go into the type of relationship, type of communication and mutual concerns here.