Our sustainability materiality process helps us report on the issues that matter most to our business and stakeholders.
Defining our material sustainability issues
A sustainability issue is material to HUL if it meets two conditions. Firstly, if it is considered a principal risk or an element of a principal risk, which could impact our business or performance. And secondly, if it is deemed important to our key stakeholders, including: consumers, customers (including retailers), suppliers & business partners, planet & society (including citizens, NGOs, governments), shareholders and our employees.
We use our sustainability materiality assessment to identify priority sustainability issues across our value chain so that we can report on the issues of most interest to our stakeholders.
There is a clear management oversight on the material ESG risks. The 2022 Materiality risk matrix has been reviewed and approved by HUL's Risk Management Committee and ESG Committee. We commit to updating our assessment periodically (at least once in 2 years or event-based) to ensure it reflects changes in our business and the external context.
Our material sustainability issues
Our 2022 sustainability materiality assessment, assessed key ESG risk topics using a ‘Double materiality’ lens of ‘Impact on Business’ and ‘Importance to Stakeholders’ in the India FMCG context. Basis our analysis, we identified 23 key topics relating to ESG risks that have been further categorised into 5 Focus Areas.
Each of these 23 topics has also been detailed out into specific issues pertaining to that topic in India. Improving Health & Well-being, Reducing Environmental Impact and Enhancing Livelihoods encompass the three Big Goals of the HUL ESG goals.
Most of the Responsible Business Practices and Wider Sustainability issues include topics that are not explicitly part of our goals but relevant to our commitments as a responsible business.
The material sustainability issues are integrated with our enterprise risk management (ERM) process.
Our materiality assessment approach
We have designed our materiality process and methodology to provide granular insights on the interests and concerns of our key stakeholders: consumers, customers (including retailers), suppliers & business partners, planet & society (including citizens, NGOs, governments), shareholders and our employees. We use stakeholder insights to gauge the relative importance of each issue to our key stakeholders.
Our process is detailed below:
Phase 1: Issue and topic identification
We refreshed and consolidated the list of sustainability issues and topics directly relevant to HUL across our value chain. We identified a long list of sustainability topics by researching emerging trends, macro forces, competitor sustainability priorities and global reporting standards. Our long list included new issues and topics, reflecting changes to the sustainability landscape in recent years such as the increased focus on social issues from a number of stakeholders. We grouped these topics into 23 broad issues.
Phase 2: Issue prioritisation
We assessed the importance of each issue to our stakeholders, using our stakeholder research to determine whether the issues were of high, medium or low priority to each stakeholder.
We incorporated additional analysis on the material issues of other FMCG companies, mandatory and voluntary ESG reporting regulations, and news coverage including social media conversations.
Phase 3: Communicate materiality analysis outcomes