Resilience Starts with Knowing What Matters
In our previous article, we argued that the resilient business does not try to predict the future perfectly.
It builds options.
But that raises an important question.
Which options should a business build?
No organisation has unlimited money, time, people or management attention.
It cannot prepare equally for every possible disruption, invest in every opportunity or address every sustainability matter with the same intensity.
Choices have to be made.
And good choices start with understanding what matters.
This is where materiality can become much more than a sustainability reporting requirement.
When applied properly, materiality can help senior decision makers understand the organisation, its value chain, its impacts, dependencies, risks and opportunities.
It can help determine where action is most important.
And that makes materiality a potentially powerful business resilience tool.
The problem is not a shortage of information
Businesses today have access to extraordinary amounts of information.
The challenge is deciding which information deserves attention.
Geopolitical developments.
Artificial intelligence.
Cybersecurity.
Climate related risks.
Energy.
Water.
Human rights.
Supply chains.
Employee capability.
Changing customer expectations.
Regulation.
Access to capital.
Reputation.
New markets.
The list can become overwhelming.
The World Economic Forum’s Global Risks Report 2026 describes a global environment in which geopolitical and geoeconomic risks dominate the immediate outlook, while technological risks continue to grow in importance over longer time horizons (World Economic Forum, 2026).
Trying to respond equally to everything is not strategy.
Leaders have to prioritise.
That requires a disciplined way of answering a deceptively simple question:
What matters most?
Materiality should help answer that question
Within sustainability reporting, materiality is often associated with deciding what should appear in a report.
That is important.
But it is only part of its potential value.
GRI 3 requires organisations reporting in accordance with the GRI Standards to identify and assess actual and potential impacts on the economy, environment and people across their activities and business relationships.
GRI also requires organisations to understand their context and recognises that relevant business relationships can extend through the value chain, including beyond first tier suppliers (Global Reporting Initiative, 2021).
This creates an important foundation.
The organisation begins by looking beyond its immediate boundaries.
It considers where activities take place.
Who is involved.
Who may be affected.
Which resources the business depends upon.
Where significant impacts occur.
And how those circumstances may change.
But we can go further.
From materiality to enhanced materiality
FBRH trains professionals to conduct what we describe as enhanced materiality.
Enhanced materiality builds on the impact perspective of the GRI Standards and incorporates the financial perspective associated with double materiality.
The organisation therefore considers both:
How the organisation affects the economy, environment and people
and
How sustainability related matters can create risks, opportunities and financial effects for the organisation.
EFRAG describes these as the two dimensions of double materiality.
Impact materiality considers significant actual and potential impacts on people and the environment.
Financial materiality considers sustainability related risks and opportunities that could create material financial effects for the organisation.
Importantly, EFRAG recognises that the two perspectives are often interconnected and that material risks and opportunities can arise from impacts and dependencies (EFRAG, 2024).
The entire value chain matters.
That is critical.
A business may have excellent control over its own operations while remaining heavily exposed to something happening upstream or downstream.
Raw materials may become unavailable.
A supplier may create a human rights exposure.
Water scarcity may affect production.
A customer’s expectations may change.
New regulation may alter market access.
Technology may make an existing product less competitive.
Climate related events may affect logistics.
Employees with critical skills may become difficult to recruit.
These matters may begin outside the traditional boundaries of financial reporting.
Their consequences may eventually reach the heart of the business.
Enhanced materiality is about decisions
This is why we believe the most useful question is not:
What do we need to put in the sustainability report?
It is:
What do senior decision makers need to understand in order to make better decisions?
That changes the purpose of the exercise.
Enhanced materiality can provide a structured process:
Understand the organisation and its value chain
↓
Identify actual and potential impacts
↓
Identify related risks, opportunities and dependencies
↓
Gather evidence
↓
Engage relevant stakeholders
↓
Seek appropriate expert input
↓
Assess significance and potential financial effects
↓
Apply professional judgement
↓
Prioritise what matters
↓
Inform decisions and action
↓
Monitor changes and outcomes
This is not simply data collection.
It is a decision making process.
The value chain changes what leaders can see
Looking across the value chain is particularly important for resilience.
Consider a manufacturer.
Its immediate operations may appear stable.
But further upstream it may depend on a raw material sourced predominantly from one country.
A transport route may pass through a region exposed to geopolitical disruption.
A supplier may depend heavily on water resources that are becoming increasingly stressed.
A critical component may come from only one manufacturer.
Further downstream, customer preferences or regulation may be changing.
None of these automatically means that management should change supplier, relocate production or abandon a market.
But they are information that senior decision makers may need.
Understanding the value chain can reveal vulnerabilities before those vulnerabilities become crises.
And it can reveal opportunities before competitors recognise them.
Impact, risk and opportunity are connected
Traditional approaches can sometimes place sustainability impacts in one box and business risks in another.
Reality is rarely so tidy.
Consider workforce conditions.
Poor working conditions create impacts on people.
They may also contribute to absenteeism, recruitment difficulties, employee turnover, operational disruption and reputational damage.
Consider water.
The organisation may affect local water availability.
At the same time, water scarcity may affect production capacity and operating costs.
Consider climate.
A business contributes to greenhouse gas emissions.
At the same time, transition policies, energy costs, physical climate risks and changing market expectations may affect its financial performance.
EFRAG’s double materiality guidance recognises these interconnections. Impacts and dependencies can generate risks and opportunities, while management decisions taken in response to impacts can themselves affect business prospects (EFRAG, 2024).
Enhanced materiality therefore encourages decision makers to see the system rather than isolated sustainability topics.
Better information creates better choices
This connects directly with business resilience.
A business cannot build useful options if it does not understand its exposures.
Imagine discovering during a disruption that your critical supplier has no realistic substitute.
Or that important organisational knowledge exists only in the head of one employee.
Or that a new regulation threatens access to a significant market.
Or that your largest customer is changing procurement requirements and you cannot provide the sustainability information being requested.
The problem is not simply the disruption.
The problem is discovering the dependency too late.
Enhanced materiality can help businesses ask these questions earlier.
That creates time.
And time creates options.
Materiality is not a once a year exercise
GRI explicitly recognises that impacts can change as activities, business relationships and the operating context evolve and therefore expects organisations to identify and assess impacts on an ongoing basis (Global Reporting Initiative, 2021).
This point deserves greater attention.
Materiality should not become an exercise conducted for the sustainability report and then placed on a shelf until the following year.
Businesses change.
Markets change.
Value chains change.
Technology changes.
Stakeholders change.
Risks change.
Opportunities change.
A materiality assessment should therefore contribute to an organisation’s wider capacity to notice change.
ISO 22316 describes organisational resilience as the ability to absorb and adapt in a changing environment while continuing to fulfil organisational objectives. It also emphasises awareness of changing contexts, strong leadership and the ability to anticipate and respond to change (ISO, 2017).
That is precisely why decision useful materiality information matters.
From disclosure to value creation
The sustainability reporting process becomes strategically useful when information moves:
from disclosure
↓
to decisions
↓
to actions
↓
to value creation
A sustainability report is therefore not necessarily the end product.
The more important product may be better organisational understanding.
Senior decision makers can use that understanding to decide:
Where should we strengthen our supply chain?
Where are we excessively dependent?
Which impacts require urgent action?
Which sustainability risks deserve management attention?
Where are new commercial opportunities emerging?
Which capabilities should we develop?
Which stakeholders need to be involved?
Where should capital be allocated?
Where do we need better evidence?
Where should we build alternatives?
These are business questions.
Building the capability to conduct enhanced materiality
Good materiality assessments require more than completing a template.
People need to understand the standards.
They need to understand the business.
They need to know how to identify impacts across the value chain.
They need to distinguish impacts from risks and opportunities.
They need to gather appropriate evidence.
They need to understand stakeholders.
They need to recognise when expert input is needed.
And they need to apply professional judgement.
That capability has to be built.
FBRH’s GRI Reporting Programme: From Understanding to Implementation is designed around this principle.
Participants learn how to use the GRI Standards in a practical organisational context and how to conduct enhanced materiality across the value chain.
The objective is not simply to teach people how to produce disclosures.
It is to help them generate information that can support governance, strategy and better decisions.
The progression is:
Understand
↓
Learn
↓
Start
↓
Grow
↓
Assure
Understand the organisation, its value chain and its sustainability context.
Build internal capability.
Start generating decision useful information.
Improve governance, evidence and processes as capability develops.
Then, where appropriate, strengthen confidence through independent assurance.
The growing role of assurance
As sustainability information becomes more important to decisions, questions naturally arise about its reliability.
Where did the information come from?
What evidence supports it?
Were appropriate criteria applied?
Can important judgements be explained?
Are controls in place?
Can stakeholders have confidence in what is being reported?
This is where independent sustainability assurance has an important but separate role.
ISSA 5000 establishes a global baseline for sustainability assurance engagements and becomes effective for periods beginning on or after 15 December 2026, with early application permitted.
Significantly, the IAASB published additional materiality guidance in June 2026 addressing qualitative and quantitative sustainability information, double materiality where applicable and the role of materiality in supporting decision useful sustainability reporting (IAASB, 2026).
That reinforces an important point.
Materiality is central not only to deciding what matters.
It is also central to the credibility of sustainability information.
FBRH provides independent sustainability assurance, including assurance of GRI Standards based sustainability reporting, subject to appropriate engagement acceptance and independence requirements.
Training and assurance therefore serve different purposes.
Training develops capability.
Assurance strengthens confidence.
Better decisions for business, stakeholders and the planet
Enhanced materiality should not force businesses to choose between commercial value and sustainability value.
Its purpose is to help decision makers understand the connections.
A decision may affect employees, communities, suppliers or the environment.
Those impacts may also create dependencies, risks or opportunities for the organisation.
Understanding both sides of the relationship enables better judgement.
This is the principle behind the FBRH approach.
Generate information that helps senior decision makers take better informed action to create lasting value:
for the business
for stakeholders
and for the planet.
Resilience starts with knowing what matters
Resilience does not mean preparing equally for everything.
That would be impossible.
It means understanding what matters sufficiently well to make informed choices before circumstances remove those choices.
Week 35 asked businesses to build options.
Week 36 adds the next piece.
Before you can build the right options, you need to know what matters.
Enhanced materiality helps organisations identify their significant impacts, risks, opportunities and dependencies across the value chain.
That information supports better decisions.
Better decisions create better actions.
And better actions help create more resilient businesses.
Simon Pitsillides
Simon Pitsillides is a board adviser specialising in sustainability governance, corporate reporting, strategy and stakeholder value creation. He supports boards and senior executives in strengthening governance, enhancing decision-making and integrating sustainability into long-term business strategy.
Simon is a Fellow of the Chartered Institute of Marketing (FCIM), a Fellow of the Institute of Sustainability and Environmental Professionals (FISEP), a Chartered Marketer, and holds an MBA in Marketing. He is also a GRI and ISEP Certified Trainer.
As Founder of FBRH Consultants and publisher of SustainCase, Simon combines strategic, commercial and governance expertise with extensive international experience in sustainability reporting, assurance readiness and value creation. He has worked with multinational organisations, financial institutions and public sector bodies across Europe, the Middle East and beyond.
Simon is recognised for helping boards move beyond compliance by using decision-useful sustainability information to strengthen strategy, manage risk, build stakeholder confidence and create long-term value for business, stakeholders and the planet.
https://www.linkedin.com/in/simon-pitsillides
References
EFRAG (2024) EFRAG IG 1: Materiality Assessment Implementation Guidance. Brussels: European Financial Reporting Advisory Group, 31 May.
Global Reporting Initiative (2021) GRI 3: Material Topics 2021. Amsterdam: Global Reporting Initiative.
International Auditing and Assurance Standards Board (2026) ISSA 5000 Frequently Asked Questions: The Application of Materiality. New York: IAASB, 25 June.
International Organization for Standardization (2017) ISO 22316:2017 Security and resilience: Organizational resilience: Principles and attributes. Geneva: ISO.
World Economic Forum (2026) Global Risks Report 2026. Geneva: World Economic Forum.