Sustainability advocates in business have often had to balance two different conversations at once. There’s the more altruistic argument for saving the planet; doing what’s right and generally limiting the damage we do to the environment around us. Then, there’s the many reasons that taking this path can make smart financial sense.
But one aspect of the year-long study conducted by sustainability consultancy firm WAP that PPAI commissioned focuses on combining those perspectives. A double materiality assessment evaluates sustainability initiatives through both lenses. Everything is seen through a framework that is broken down between an “Impact Materiality” (i.e. effects on people and the environment) and a “Financial Materiality” (i.e. financial effects on the company).
- Traditionally, people consider inside-out materiality.
- In other words, within their business operations, companies extract resources from the environment and thus react to that dynamic.
- However, the realities are usually more complex and entangled than that.
Check Out Part 1: Explaining The WAP Sustainability Study
For example, the environment itself can have an impact on business whether through storms that disrupt the supply chain or limiting available materials or resources that drive up prices. These are sustainability choices that have immediate cost implications or will pay dividends in a matter of, say, two years or perhaps many years down the line. They are still based in financial materiality and can be measured as such.
Elizabeth Wimbush, CAS
Director of Sustainability & Responsibility, PPAI
“It really anchors what we’re doing in a business case,” says Elizabeth Wimbush, CAS, PPAI’s director of sustainability and responsibility. “In reality, our industry operates in a world that is impacted by the outputs of businesses. For example, supply chain disruptions caused by natural disasters and humanitarian crises that are driven by operating with blinders on, as if those aren’t outputs of businesses.”
For a company to see sustainability through both materiality assessments (Impact and Financial), then the company will not only see the incentive of sustainability, but it will also be able to better decide what levels and areas of investments are suitable for where it is on its journey.
“It takes it out of what you could cynically call the ‘feel-good’ realm and connects it to these drivers of business values,” says Emma McMahon, senior sustainability manager at WAP and project leader on this study.
While companies can individually view their sustainability goals through this lens, the WAP study spent months evaluating the entire branded merchandise industry through a double materiality assessment, interviewing and analyzing companies in both directions via impact and financial.
“The double materiality analysis will help guide suppliers and distributors to focus on the issues that matter,” says Denise Taschereau, CEO of Fairware, who was chair of the PPAI Board of Directors when the WAP study was commissioned. “Not surprisingly, product and circularity top the list of issues we face, and having it reinforced will help ensure we’re all focused on the issues that matter.”
Denise Taschereau
CEO, Fairware
- On that note, PPAI is in the process of enhancing its circularity education, including a practical guide to circular thinking in branded merch.
This analysis is a tool. It’s valuable information that is available to PPAI members. It’s also a new perspective that’s worthy of adoption.
Emma McMahon
Senior Sustainability Manager, WAP
“Environmental impact on the outside world has impact on business,” says McMahon. “It doesn’t just have real world consequences. It has implications on our ability to deliver value for our stakeholders.”
- Stay tuned for more of WAP’s sustainability data to be rolled out through PPAI Media and other PPAI channels.
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