The materiality analysis tool is used to identify the sustainability issues that are relevant to a company and its stakeholders. The materiality analysis must be carried out in accordance with international standards (e.g., those under the Global Reporting Initiative; GRI) and in accordance with the requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD). Those topics on which quantitative data and descriptive information must be disclosed in the sustainability report must be defined as part of the materiality analysis. At the same time, it also forms an important basis for strategic alignment and operational planning in the areas of environmental, social, and governance (ESG).
According to the requirements under the CSRD, the direct and indirect impacts of the company on people and the environment (= impact materiality from the inside-out perspective) and the financial risks and opportunities for the company (= financial materiality from the outside-in perspective) must be assessed as part of the materiality analysis. An issue is deemed to be material if it is assigned impacts, opportunities or risks whose assessment is above a threshold value that is to be defined.
The company carried out an in-depth materiality analysis during the reporting period in preparation for the CSRD reporting obligation that will apply to voestalpine from the business year 2024/25. The sustainability aspects were evaluated and prioritized according to the principle of double materiality in accordance with the requirements under the European Sustainability Reporting Standards (ESRS). The ESRS represent the framework developed by the EU that all companies subject to the CSRD regulations must use when disclosing their sustainability information.
METHODOLOGY FOR MATERIALITY ANALYSIS
The materiality analysis was carried out by a core project team made up of employees from the Group Sustainability department and those responsible for sustainability in the divisions. All decisions that had to be taken as part of the materiality review were made by consensus in the core team. The process was supported by a specialized consulting firm. Its task was to ensure compliance with the formal requirements of the ESRS and to ensure that fact-based and objective decisions were taken in the workshops.
The process of identifying the topics to be considered began with the creation of a list of sources and collation of the topics listed within this. Following the recommendations of the EFRAG implementation guidelines for the materiality analysis, the GRI Standards, the ISSB Standards and international due diligence instruments were used as primary sources in addition to the ESRS for collating topics that could potentially be material along the value chain. The team also considered other sources, such as peer reviews and the WEF’s Global Risks Report 2023, which contains the results of the latest Global Risks Perception Survey (GRPS). This enabled around 260 potentially material sustainability aspects to be collated in an unconsolidated pool of topics.
This was followed by a consolidation of overlapping or equivalent topics. This “longlist” was compiled with a total of 49 topics. As part of an initial high-level analysis of the company-specific impacts, risks or opportunities, the list was narrowed down to around half as many topics (the shortlist). A brief contextual description was then created for each of these topics in order to provide a clear and consistent understanding of what each topic entails and to distinguish these from each other. Stakeholders were then surveyed in order to obtain their assessment of the topics and then in a final step, the impacts, risks, and opportunities (IROs) associated with the individual topics were identified and assessed with the involvement of all relevant specialist departments.
SELECTION AND INVOLVEMENT OF STAKEHOLDERS
The core project team selected the stakeholders who were involved. Prior to this selection, a discussion was held with the voestalpine stakeholder management expert from the Public Affairs department. Based on this, the stakeholders who could potentially be involved were assessed in a workshop in terms of their importance and accessibility. Importance was measured by the level of interest of a stakeholder group in the sustainable development of voestalpine, and the extent of its influence on the company. The importance rating was crucial in determining whether a stakeholder group should be involved, and the accessibility rating determined how this should be achieved.
Stakeholders were involved in two different ways, namely through in-person interviews and a broad-based anonymous online survey. Both methods have their advantages which were united by means of their combined application. The online survey was able to reach a large number of people and thus achieve a high level of representation and statistical validity of the evaluation. Various aspects were discussed in detail in the interviews with individual stakeholders and representatives of interest groups, with a deeper understanding gained of their perspectives and concerns.
voestalpine employed both these formats to involve a total of 130 internal and external stakeholders from five categories (employee representatives, suppliers, customers, shareholders and investors, governmental and non-governmental organizations) in defining the key topics for the CR-Report. In addition to the quantitative assessment of the topics on a scale of one to seven, qualitative questions were also asked and evaluated.
IMPACT, RISK AND OPPORTUNITY (IRO) ASSESSMENT
A workshop-based approach was chosen to identify and evaluate the IROs. Existing risk matrices for the specialist areas, risk lists available publicly, such as the list of transitory risks and physical risks from the EU taxonomy and CSRD/ESRS, as well as research results were used for this purpose. Additional IROs were collated by the core project team in workshops, including those identified in the stakeholder survey. All IROs were assessed in multiple workshops in terms of their severity or potential severity and their probability.
The extended core team clarified questions in the final workshop, in particular on those IROs that had previously been assessed to be contentious. Different points of view were presented and ambiguities clarified in this process in order to ultimately arrive at a final assessment that was supported by everyone.
Once the workshop had been completed and the results of the stakeholder survey had been taken into account, the threshold values for the material topics were defined and the topics falling below these thresholds were considered to be less material and eliminated.
MATERIAL TOPICS
The contents of this report are still based on the topics previously assessed as material. The materiality analysis carried out in the 2023/24 business year forms the basis for the sustainability declaration from the 2024/25 reporting year, which is binding in accordance with the ESRS. The final results of the materiality analysis were presented at a Sustainability Board meeting in early May 2024 and approved by the Board.
The following topics were identified as material in the materiality analysis:
