From Materiality to Strategy: How SABIC Integrates Sustainability

Authors

• Guy Morgan

  Former Director, Advisory Services, BSR

Bert Groothuis, Director, Corporate Sustainability, SABIC

A leading manufacturer of chemicals, fertilizers, plastics, and metals, SABIC has worked with BSR over the past few years on sustainability reporting, including the company’s approach to materiality assessments. Here, Bert Groothuis, a director of corporate sustainability at SABIC, discusses how the company's materiality approach is driving strategy—a topic he will elaborate on at a BSR Connect event in our Copenhagen office on February 26.

Why did SABIC undertake a materiality assessment?

Sustainability is an integral part of our strategy, and we believe that sustainable solutions and processes add value to all our stakeholders. Like most companies, we were looking to bring structure to our sustainability approach, and to support this, we needed a methodology that would provide insights from stakeholders on topics of importance. We’d already established a number of key performance indicators focused on environmental performance in our operations—energy use, water, material waste, and greenhouse gas emissions—and felt we needed to deepen our knowledge and understanding of the issues, beyond environment, of strategic relevance to the business.

What value did you extract from both the process and the results?

The process is as important as the result. We decided to focus on engaging internal stakeholders first—representatives across our strategic business units and corporate functions around the world. In total, we ran 15 workshops over a few months. They were tremendously helpful in raising awareness for sustainability beyond environmental issues across the company in a way that hadn’t happened previously. I think ranking the topics in terms of risk and opportunity for both the business and broader society helped us think in a more integrated way about sustainability, and that’s going to be invaluable for our next steps. The output from the group sessions was quite consistent and brought comfort and confidence that we have the right priorities around which to further expand our strategy.

How are you using materiality to craft your strategy?

From the start, we knew we had to drive a process that was much more than a list of priority topics. The process is still ongoing, however. If I take our supply chain as an example, we’ve spent some time going deeper with the teams on the business relevance of responsible supply chain management—where we need to comply and where we need to lead. This has required benchmarking, in-depth workshops with the supply chain teams, and meetings with senior executives. We’re now at the stage of defining the metrics and long-term objectives for which the different businesses will be accountable. We follow this structured process for our other material topics, which will all fit into an overall strategy frame.

What advice would you give other companies thinking about embarking on a materiality assessment?

Think about materiality as the beginning of a long and inclusive strategy-forming process. The fact that we were very deliberate about the process, that it was very open and transparent, and that it involved both senior and middle management in the business has helped us get the requisite support needed to drive action. We picked a process that would work within the corporate culture of SABIC, and I’d recommend others to consider doing the same.