Materiality assessment process

Organizations are faced with a wide range of topics on which they could report. Relevant aspects are those that may reasonably be considered important for reflecting the organization’s economic, environmental and social impacts, or influencing the decisions of stakeholders, and, therefore, potentially merit the inclusion in the report. Materiality is the threshold at which Aspects become sufficiently important that they should be reported. Beyond this threshold, not all material Aspects are of equal importance and the emphasis within a report should reflect the relative priority of these material Aspects (Materiality Principle: Global Reporting Initiative G4 Sustainability Reporting Guidelines).

Our materiality assessment process

We are engaged in a broad number of topics together with our stakeholders, following common interests and expectations. In order to cover all the relevant sustainability aspects in our reporting process, we have carried an extensive materiality assessment process between March and May 2016, engaging more than 150 persons from more than 35 organizations. Our process is comprised from 3 steps and its results were used to define the structure and content of our Corporate Responsibility Report.

 

IDENTIFICATION OF SUSTAINABILITY ASPECTS

process-of-materiality-assessment

Which are the sustainability aspects connected with our services, products and operations?

For us it is absolutely clear that the answer to this question cannot be based only on our opinion and our responsibility is to ask others too and consider their answers as well. We have started to answer the question considering the already recognized important issues for our business, part of our CR Strategy and management objectives. We have addressed the question to our employees via direct conversations during internal workshops, e-mail and internal communication channels.

We expanded the search for answers by looking at our organization activity, how we generate economic value and what is its relationship with the natural environment and society.

We have inquired into the ICT sector specific aspects to identify its relationships with the sustainable development goals, its contribution and its impacts on the goals. We have analyzed also what our peers, industry and sustainability experts considered for expressing the sustainability within ICT sector.

Identifying sustainability aspects

Our approach was holistic, trying to encompass information on sustainability aspects from all levels, organizational, sectorial and cross-sectorial. The information which we used for this process was:

  • Internal data about: overall company performance, process and services key performance indicators, strategy and operations;
  • External information from standards, peers, studies, reports, academia.

Our sources included:

  •  Internal performance scorecards;
  •  GRI Telecommunication Sector Supplement;
  •  GeSI (Global e-Sustainability Initiative) – A Materiality Assessment for the ICT Industry;
  •  SASB – Sustainability Accounting Standard. Technology & Communication Sector;
  • Greenpeace – Green electronics initiative;
  • DT and OTE materiality assessment data;
  • We have identified 113 sustainability aspects organized under 4 general categories: environment, economy, society and governance and 22 sub-categories.

Categories of sustainability aspects

  1. Products (hardware, accessories) with low environmental impact
  2. The type of materials used in the products (hardware, accessories)
  3. Services that promote and facilitate resources efficiency
  4. Biodiversity
  5. Efficiency of resource use within company operations
  6. Energy efficiency and climate change mitigation
  7. Waste management
  8. The economic performance of the organization
  9. Economic impact
  10. Responsible business practices
  11. Social impact management
  12. Responsibility towards employees
  13. The health, safety and welfare of employees
  14. Responsibility in labour relations
  15. Customers‟ health and safety
  16. Respect for privacy and personal data protection
  17. Access to telecommunications products and services. Bridging the digital divide
  18. Customers‟ relationships
  19. Corporate governance
  20. Collaboration with stakeholders
  21. Promoting sustainable development in the supply chain
  22. Research and development

IDENTIFICATION OF SUSTAINABILITY ASPECTS

Materiality assessment – internal dimension

The determination of the significance of economic, social and environmental impacts of sustainability aspects that we identified was the first step in our assessment. We are realizing impact assessments of various aspects of our business on a continuous basis, as part of our management approach, and we have developed specific procedures and processes.

PRIORITIZATION OF SUSTAINABILITY ASPECTS

Materiality assessment – internal dimension

The determination of the significance of economic, social and environmental impacts of sustainability aspects that we identified was the first step in our assessment. We are realizing impact assessments of various aspects of our business on a continuous basis, as part of our management approach, and we have developed specific procedures and processes.

Significant sustainability aspects for Telekom Romania

To determine the relevance level of any given sustainability aspect we are using a qualitative assessment method based on 3 criteria:

  1. Aspect’s impact on financial conditions of Telekom Romania

Provides an indication about the aspect’s impact on the company’s financial performance

  1. Aspect’s impact level (intensity)

Provides an indication about the level at which the impact effects are manifesting

  1. Aspect’s impact scale

Provides an indication about the dimension and importance of the impact based on the changes it produces

We have carried out the assessment process together with our employees, engaging all business functions in the process in order to ensure a balance view from all perspectives. We have organized one materiality assessment workshop with more than 20 participants and we have asked the opinion of other 75 employees across mobile and fix operations.
internal_workshop

Materiality assessment – external dimension

Externally, we have asked our organizational stakeholders about the relevance of each category of aspects from their perspective. During May and June 2016, we launched an on-line questionnaire survey in which 48 organizational stakeholders participated, including customers, media, NGOs, suppliers, other telecommunication companies from Romania and entrepreneurs.For each of the question we have averaged the significance level in order to identify those aspects which are commonly regarded as significant and very significant.

Materiality assessment survey

The results of the materiality assessment survey have revealed the opinions of participants regarding the importance of each aspect, as presented in the example bellow. We have aggregated the results to determine the average importance level for each aspect.

ch2_15

 

RESULTS OF THE MATERIALITY PROCESS

Material (significant) sustainability aspects

The importance of the materiality assessment is that it generates understanding about what is important from internal point of view (the company and its employees) and from external point of view (the external stakeholders). For Telekom Romania, the materiality process results are influencing not just the reporting process but also the company’s CR strategy which now can be better aligned also with external expectations and interests.

Materiality matrix Telekom Romania

The aspect categories determined as having a high and very high importance for our company and for our stakeholders represent the topics on which we are focusing in our reporting process and in our strategy, without affirming that we can address all of them at the same level or in the same time, as this is quite impossible and idealistic.

THE BOUNDARIES OF OUR MATERIAL ASPECTS

One of our materiality assessment process criteria represent the qualitative evaluation of the associated impacts of each analyzed aspect. We are evaluating each aspect considering its impact level
and impact scale.
We are using one criteria also to differentiate between impacts within our organization and outside the organization, by defining the control level of impacts associated with identified  sustainability aspects.

Our compliance and risk management systems, our integrated environmental, quality and health and safety management systems, our supplier assessment policies and practices, our
customer responsibility practices and, integrally, our corporate responsibility strategy are our essential elements in managing all identified material aspects, both internally and externally.
For example, soil pollution generated by an accidental spill, due to poor waste management practices, represents usually (depending on the quantities), a high level impact on small scale having its
boundaries within the organization as it is generated by the company operations. The effect of the spill, the pollution, is affecting the local natural ecosystem locally but also is affecting
the organization financial performance, generating cleaning and remediation costs.

During our materiality assessment process we have identified the aspect boundaries for all aspects analyzed based on the criteria bellow.

Material aspect relevance within Telekom Romania. Material aspects for which the impacts can occur within the boundaries of Telekom Romania, respectively during the operations directly managed by Telekom Romania:

  • Fixed operations;
  • Mobile operations.

Material aspect relevance outside Telekom Romania.
Material aspects for which the impacts can occur outside the boundaries of Telekom Romania (operations not under direct control of Telekom Romania) at the level of contractors, suppliers,
distributors and customers:

  • Network maintenance and development contractors (A);
  • Administrative services contractors (B);
  • Facility maintenance contractors (C);
  • Hardware suppliers (D);
  • Software suppliers (E);
  • Distributors / commercial partners (F);
  • Business customers (G);
  • Private customers (H).