In Week 36 we asked how businesses determine which options matter.

Enhanced materiality provides part of the answer by helping senior decision makers understand significant impacts, risks, opportunities and dependencies across the value chain.

But identifying what matters is not the destination.

It is the beginning.

A beautifully constructed materiality assessment sitting inside a sustainability report will not make an organisation more resilient.

A materiality matrix will not strengthen a supply chain.

A risk description will not retain critical employees.

An assessment of water dependency will not reduce water consumption.

Identifying a human rights impact will not correct it.

Recognising a market opportunity will not capture it.

Information creates value when it changes decisions and action.

That is the next step in building business resilience.

Materiality must lead somewhere

GRI 3 provides an important clue.

The Standard does not stop when an organisation identifies its material topics.

Disclosure 3 3 requires organisations to explain how each material topic is managed, including policies and commitments, actions taken, processes for tracking effectiveness, goals, targets and indicators, progress, lessons learned and the role of stakeholder engagement (Global Reporting Initiative, 2021).

That progression matters.

It takes us from:

What matters?

to

What are we doing about it?

The OECD Due Diligence Guidance for Responsible Business Conduct follows a similar logic.

Organisations are expected to identify and assess adverse impacts, take action to cease, prevent or mitigate them, track implementation and results, communicate what they are doing and provide or cooperate in remediation where appropriate (OECD, 2018).

Again, the emphasis is not simply on knowing.

It is on acting and learning.

Enhanced materiality should support decisions

FBRH trains professionals to undertake enhanced materiality.

The approach begins with the impact perspective of the GRI Standards and adds the financial perspective associated with double materiality.

It looks across the value chain to understand:

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 recognises these connections explicitly.

Its materiality guidance explains that material risks and opportunities can arise from impacts, dependencies and other factors, and that these matters can interact with strategy, investment and management decisions (EFRAG, 2024).

This is precisely why enhanced materiality has value beyond sustainability reporting.

It creates a structured information base for senior decision makers.

But the process becomes strategically useful only when management asks:

What decision should this information influence?

From material topic to management decision

Imagine that enhanced materiality identifies water scarcity as significant.

The reporting question might be:

What should we disclose about water?

The management questions are broader.

Where is the organisation most dependent on water?

Which facilities or suppliers are most exposed?

Could scarcity interrupt production?

What are the implications for communities?

Could costs rise?

Are alternative sources available?

Could processes use less water?

Should investment priorities change?

What indicators would provide early warning?

Who is responsible for responding?

The same principle applies to human capital.

Suppose the assessment identifies dependence on a small number of employees with critical expertise.

The reporting question may concern training, retention or employee turnover.

The resilience questions are different.

What happens if those people leave?

Who else understands the process?

Can knowledge be transferred?

Should succession plans be developed?

Does the organisation need additional capability?

Can technology reduce the dependency?

Again, information begins the conversation.

Decisions create the response.

Every material matter should create a management conversation

One way of ensuring that enhanced materiality contributes to resilience is to connect each significant matter with a clear management discussion.

For every important impact, risk, opportunity or dependency, senior decision makers should be able to ask:

What is happening?

↓

Why does it matter?

↓

Who or what is affected?

↓

What could this mean for the organisation and its stakeholders?

↓

What decision is required?

↓

Who owns that decision?

↓

What action will be taken?

↓

How will we know whether the action worked?

↓

What have we learned?

This converts materiality from a reporting process into a management process.

The value chain makes action more complicated

Not every material matter can be solved inside the organisation.

Many of the most important sustainability impacts and business dependencies exist within the value chain.

The OECD notes that significant environmental and social impacts often occur within supply and value chains rather than solely within an organisation’s own operations (OECD, 2026).

That means action may require collaboration.

A supplier may need support.

Procurement criteria may need changing.

Contracts may need reviewing.

Products may need redesigning.

New suppliers may need developing.

Customers may need engaging.

Industry bodies may need coordinating collective action.

Communities may need to be consulted.

Expert knowledge may be required.

The appropriate response depends on the nature of the matter and the organisation’s relationship with it.

This is another reason why simplistic sustainability checklists are inadequate.

Professional judgement matters.

Prioritisation must continue after materiality

A materiality assessment establishes priorities.

But management still needs to prioritise actions.

Consider an organisation that identifies ten significant sustainability matters.

It may identify dozens of possible responses.

Management cannot implement everything immediately.

The next question becomes:

Where can action create the greatest value?

That value can take several forms.

Reducing a significant negative impact.

Avoiding disruption.

Protecting people.

Improving operational efficiency.

Strengthening a supplier relationship.

Reducing cost.

Increasing access to markets.

Developing new products.

Building stakeholder trust.

Protecting natural resources on which the organisation depends.

Improving access to finance.

Creating greater strategic flexibility.

The objective is not to reduce every decision to a financial calculation.

Nor is it to ignore financial consequences.

Enhanced materiality allows decision makers to consider both.

That is why we describe the intended outcome as creating lasting value:

for the business

for stakeholders

and for the planet.

Actions need owners

There is another common problem.

Everyone agrees that a topic is important.

Nobody owns it.

If a material issue has no clear organisational responsibility, action can easily disappear between sustainability, finance, operations, procurement, human resources, risk and senior management.

Business resilience requires ownership.

Some matters may require board oversight.

Others belong with executive management.

Others may sit with procurement, operations, human resources or another business function.

Many will cross functional boundaries.

The important point is that material sustainability information should reach the people capable of acting on it.

A sustainability team cannot create organisational resilience alone.

Measure whether the action worked

Action without measurement creates another problem.

The organisation may be busy without knowing whether it is making progress.

GRI 3 specifically requires organisations to report how they track the effectiveness of actions taken to manage material topics, including goals, targets, indicators, progress and lessons learned (Global Reporting Initiative, 2021).

This creates a powerful management cycle:

identify

↓

prioritise

↓

decide

↓

act

↓

measure

↓

learn

↓

adapt

That final stage is particularly important for resilience.

Conditions change.

An action that worked yesterday may not work tomorrow.

A supplier improves.

A new regulation appears.

Technology changes.

A risk becomes less important.

Another becomes more significant.

A new opportunity emerges.

The organisation therefore needs to learn and adapt.

ISO 22316 describes organisational resilience as the ability to absorb and adapt in a changing environment while continuing to fulfil organisational objectives (ISO, 2017).

Adaptation requires feedback.

From reporting cycle to learning cycle

This changes how we can think about sustainability reporting.

The traditional model can appear linear:

collect data

↓

write report

↓

publish report

↓

repeat next year

A resilience based approach should be circular.

understand

↓

identify

↓

prioritise

↓

decide

↓

act

↓

measure

↓

learn

↓

understand again

The report is an important output.

But organisational learning may be an even more valuable one.

Capability determines whether this works

None of this happens automatically.

People need the capability to conduct a robust materiality assessment.

They need to understand the organisation and its value chain.

They need to identify impacts, risks, opportunities and dependencies.

They need to gather and evaluate evidence.

They need to understand stakeholder perspectives.

They need to know when expert input is required.

They need to assess significance and financial effects.

They need to apply professional judgement.

And critically, they need to communicate the results in a form that senior decision makers can use.

This is why FBRH training focuses on implementation rather than simply understanding disclosure requirements.

Through the GRI Reporting Programme: From Understanding to Implementation, participants learn how to apply the GRI Standards and undertake enhanced materiality across the value chain.

The objective is to develop internal capability.

Not simply to produce a report.

But to generate information that supports better decisions.

Training, action and assurance have different roles

There is also an important distinction between training and assurance.

Training develops capability.

It helps organisations develop the people, knowledge and processes required to generate and use sustainability information.

Management takes decisions and action.

The organisation remains responsible for determining its strategy, priorities and responses.

Independent assurance strengthens confidence.

Assurance evaluates sustainability information against suitable criteria and appropriate evidence.

These roles should remain distinct.

FBRH does not disguise organisation specific consulting as training.

Our training provides methods, frameworks, templates and exercises that organisations can apply using their own judgement.

Independent assurance is conducted separately and subject to appropriate ethical and independence requirements.

Why assurance becomes more relevant

As sustainability information moves closer to strategic decisions, its reliability becomes increasingly important.

Senior decision makers may be using that information to allocate resources.

Customers may use it to select suppliers.

Banks may consider it when evaluating clients.

Stakeholders may use it to assess organisational performance.

Boards may use it when overseeing risks and opportunities.

The question therefore becomes:

Can we rely on this information?

ISSA 5000 has been developed as a global baseline for sustainability assurance engagements.

The IAASB’s June 2026 guidance on materiality under ISSA 5000 specifically addresses the information needs of intended users, qualitative and quantitative sustainability information, double materiality where applicable and materiality throughout an assurance engagement in support of decision useful sustainability reporting (IAASB, 2026).

This reinforces the connection between materiality, information quality and decisions.

Assurance does not tell management what decision to make.

But it can strengthen confidence in the sustainability information on which decisions and disclosures may depend.

The pathway from information to resilience

The broader progression therefore becomes:

Understand the organisation and its value chain

↓

Build internal capability

↓

Conduct enhanced materiality

↓

Identify what matters

↓

Provide decision useful information

↓

Make informed decisions

↓

Take action

↓

Measure results

↓

Learn and adapt

↓

Strengthen confidence through assurance where appropriate

↓

Build greater resilience

This is not sustainability reporting sitting beside business strategy.

It is sustainability information contributing to better business strategy.

Knowing is not enough

Knowing that a supplier represents a critical dependency does not create an alternative.

Knowing that employees lack an important future skill does not develop that capability.

Knowing that water scarcity threatens operations does not reduce the exposure.

Knowing that a product creates an impact does not redesign the product.

Knowing that a market opportunity exists does not capture it.

Knowing matters.

But knowing is only valuable if it influences what comes next.

Information must support decisions.

Decisions must lead to action.

Action must be measured.

Results must create learning.

Learning must improve the next decision.

That is how sustainability information contributes to resilience.

And that is how enhanced materiality can move:

from disclosure

↓

to decisions

↓

to actions

↓

to value creation

For the business, stakeholders and the planet.

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.

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.

OECD (2018) OECD Due Diligence Guidance for Responsible Business Conduct. Paris: OECD Publishing.

OECD (2026) Due Diligence for Responsible Business Conduct. Paris: Organisation for Economic Co operation and Development. Accessed 20 August 2026.

The post Knowing What Matters Is Not Enough. Resilience Requires Action. appeared first on SustainCase - Sustainability Magazine.

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.

The post Resilience Starts with Knowing What Matters appeared first on SustainCase - Sustainability Magazine.

Geopolitical tensions can change trading relationships. Artificial intelligence can disrupt established business models. Cyber threats can interrupt operations. Supply chains can fail. Climate related events can affect infrastructure and resources. Regulation can change. Customer expectations can shift.

The World Economic Forum describes a global risk environment characterised by geoeconomic confrontation, armed conflict, technological risks and unstable supply chains. Importantly, its Global Risks Report does not claim to predict one predetermined future. It considers a range of possible futures so that organisations and policymakers can improve prevention and preparedness (World Economic Forum, 2026).

That distinction matters.

The resilient business does not need to know exactly what will happen next. It needs to be capable of responding when what happens next is different from what it expected.

This is where optionality becomes important.

What does business optionality mean?

Business optionality is the ability to maintain credible alternatives before they are urgently needed.

A business has greater optionality when it has choices about suppliers, markets, people, technology, finance, operations and leadership.

It has less optionality when one failure can severely restrict its ability to act.

Russell Reynolds Associates applies this thinking to CEO succession. Its 2026 research argues that boards should develop broader leadership pipelines so they have greater choice when circumstances change. It describes this as expanding optionality and preparing for multiple possible futures (Russell Reynolds Associates, 2026a).

The principle can be applied much more widely.

A resilient organisation asks not only:

What is our preferred route?

It also asks:

What will we do if that route is no longer available?

Efficiency and resilience are not the same thing

For decades, businesses have been encouraged to optimise.

Reduce inventory.

Consolidate suppliers.

Centralise expertise.

Standardise processes.

Remove spare capacity.

These measures can improve efficiency.

But efficiency and resilience are not always the same.

A business that depends on a single supplier may have negotiated excellent terms. A business that derives most of its revenue from one customer may operate efficiently. An organisation where one individual holds critical institutional knowledge may avoid duplication.

Each can also contain a serious vulnerability.

This creates an important strategic question:

How much efficiency are we willing to exchange for resilience?

There is no universal answer.

ISO 22316 recognises that organisational resilience cannot be approached identically by every organisation. The appropriate response depends on the organisation, its objectives and its operating environment (ISO, 2017).

The objective is therefore not to create redundancy everywhere.

It is to understand where the absence of an alternative could threaten the organisation’s ability to operate, adapt or create value.

Where should businesses build options?

Optionality can be considered across the business.

1. Leadership

What happens if a critical leader leaves unexpectedly?

Leadership resilience is not simply about identifying a successor. It means developing people with the judgement, experience and adaptability required to operate under different circumstances.

Russell Reynolds Associates identifies systems thinking, curiosity, adaptability and resilience among important factors associated with executive potential in changing environments (Russell Reynolds Associates, n.d.).

Leadership development therefore becomes part of business resilience.

2. People and capability

Where does critical knowledge sit?

If essential processes depend on one person, the business has a concentration risk.

Training, knowledge sharing, succession planning and developing capability across teams create alternatives.

This is one reason learning should not be treated simply as a human resources benefit.

Capability creates strategic options.

3. Supply chains

Which suppliers would be difficult to replace?

Which materials come from vulnerable regions?

How far into the value chain does the organisation understand its dependencies?

Russell Reynolds Associates recommends that boards stress test supply chains, market exposures and operating models against adverse geopolitical scenarios rather than assuming existing conditions will continue (Russell Reynolds Associates, 2026b).

The question is not whether every organisation should immediately replace existing suppliers.

The question is whether alternatives have been considered before they become necessary.

4. Markets and customers

Dependence can also exist on the revenue side.

What percentage of revenue depends on a small number of customers?

What happens if access to an important market changes?

Could products or services be adapted for another market?

Market diversification is not always possible or desirable, but understanding concentration helps leaders make better informed decisions.

5. Finance

Resilience requires room to manoeuvre.

Liquidity, access to finance, manageable fixed costs and realistic scenario planning can determine whether a business has time to adapt when conditions deteriorate.

Financial resilience is therefore not simply about having capital.

It is about maintaining choices.

6. Technology

Technology creates opportunities and dependencies simultaneously.

Artificial intelligence is already changing how organisations gather information, analyse data and make decisions.

But technology choices also create questions about cybersecurity, data quality, intellectual property, skills and dependence on particular platforms.

The resilient question is not simply:

Which technology should we adopt?

It is also:

What happens if this technology changes, fails, becomes unavailable or creates an unexpected risk?

7. Sustainability

Sustainability can reveal some of the most important dependencies and exposures in the business.

Energy.

Water.

Raw materials.

Employees.

Communities.

Suppliers.

Customers.

Regulation.

Climate.

Human rights.

These are not isolated sustainability topics.

They interact with business continuity, reputation, cost, access to markets, availability of resources and long term competitiveness.

That is why sustainability information can become an important component of business resilience.

How does sustainability reporting support business resilience?

The value of sustainability reporting is not simply the report.

Its greater value can come from the process used to generate the information.

GRI 3 requires organisations reporting in accordance with the GRI Standards to identify and assess their actual and potential impacts across their activities and business relationships. It also recognises that impacts can change as activities, business relationships and the wider operating context evolve (Global Reporting Initiative, 2021).

FBRH builds on this foundation through what we call enhanced materiality.

Enhanced materiality combines the impact perspective of the GRI Standards with the financial perspective of double materiality. It looks across the organisation and its value chain to understand both:

how the organisation affects the economy, environment and people

and

how sustainability related matters can affect the organisation, its strategy, resilience and ability to create value.

The purpose is not simply to determine which topics should appear in a sustainability report.

It is to generate decision useful information for senior decision makers.

A structured enhanced materiality process therefore considers the organisation and its value chain, identifies actual and potential impacts, risks and opportunities, gathers appropriate evidence, incorporates stakeholder and expert input, assesses significance and financial effects, and applies professional judgement to determine what matters most.

The process can be expressed as:

Understand the organisation and its value chain

↓

Identify impacts, risks and opportunities

↓

Gather evidence and stakeholder input

↓

Assess significance and financial effects

↓

Apply expert input and professional judgement

↓

Prioritise what matters

↓

Support decisions and action

↓

Monitor change and review outcomes

This changes the role of materiality.

Instead of being an annual reporting exercise, it becomes part of the information senior decision makers can use to understand dependencies, vulnerabilities, opportunities and emerging changes across the value chain.

The information can then move:

from disclosures

↓

to decisions

↓

to actions

↓

to value creation

For FBRH, this is the real value of enhanced materiality.

It helps organisations move beyond asking “What do we need to report?”

towards asking:

“What do we need to understand and act upon to create lasting value for the business, stakeholders and the planet?”

That is also where materiality connects directly with resilience. Better understanding of impacts, risks, opportunities and dependencies gives decision makers more time to respond, more informed choices and, ultimately, more options when circumstances change.

Better information creates more options

An organisation cannot respond effectively to something it does not understand.

Decision useful sustainability information can help leadership identify emerging problems earlier, understand relationships across the value chain and consider alternatives before circumstances force an immediate response.

This creates what might be called decision leverage.

More reliable information does not remove uncertainty.

It improves the quality of choices available within uncertainty.

This connects directly with governance.

Russell Reynolds Associates argues that geopolitical risks should be incorporated into strategic planning and regular risk discussions rather than treated as isolated events. It highlights scenario planning, regulatory mapping, stress testing and cybersecurity preparedness as areas receiving increased board attention (Russell Reynolds Associates, 2026b).

The principle is straightforward.

Do not wait for disruption to discover your options.

From awareness to capability

There is, however, an important difference between understanding resilience conceptually and being able to build it.

Businesses need capability.

This is where education and structured implementation become important.

A practical pathway can be:

Understand

Identify the major changes affecting the organisation, its sector and its value chain.

Learn

Develop internal knowledge of sustainability, materiality, reporting, governance, stakeholder engagement and the standards that affect the organisation.

Start

Begin gathering useful information rather than waiting until every system is perfect.

Grow

Improve processes, evidence, controls, governance and decision making as organisational capability develops.

Assure

Use independent assurance to strengthen confidence in important sustainability information and the processes supporting it.

This reflects the broader SustainCase Business Resilience approach.

It also creates a clear distinction between capability building and assurance.

Training should help organisations develop their own knowledge and judgement. It should not disguise organisation specific consulting as education.

Independent assurance serves a different purpose. It evaluates sustainability information against suitable criteria and requires appropriate independence.

Building capability through training

For organisations that want to strengthen their sustainability reporting capability, structured learning can provide the methodology and practical tools needed to move from understanding to implementation.

FBRH Consultants delivers GRI Certified training, including the GRI Reporting Programme: From Understanding to Implementation, designed to help professionals understand the GRI Standards and apply a structured reporting process.

The wider objective is not simply to produce another report.

It is to develop people who can identify material impacts, understand their organisation’s value chain, gather appropriate evidence and convert sustainability information into better decisions.

For chambers and business associations, this can also provide a practical route for helping member businesses strengthen resilience collectively.

Awareness can lead to learning.

Learning can lead to capability.

Capability can lead to better information.

Better information can lead to better decisions.

Why assurance matters

As sustainability information becomes more important to management, boards, investors, customers, regulators and other stakeholders, confidence in that information becomes increasingly important.

Assurance does not make an organisation resilient by itself.

But it can help strengthen confidence that important sustainability information is supported by appropriate evidence, processes and controls.

The International Auditing and Assurance Standards Board developed ISSA 5000 as a global baseline for sustainability assurance. It applies to sustainability information prepared under suitable criteria and becomes effective for sustainability information reported for periods beginning on or after 15 December 2026, with early application permitted (IAASB, 2025).

FBRH provides independent sustainability assurance, including assurance of GRI Standards based reporting, subject to engagement acceptance and independence requirements.

This creates a natural progression:

Build capability

↓

Generate decision useful information

↓

Use that information to improve decisions

↓

Strengthen processes and evidence

↓

Seek independent assurance

The purpose is not compliance for its own sake.

It is confidence in the information on which decisions increasingly depend.

Resilience is the ability to keep choosing

A resilient business is not a business that never experiences disruption.

Nor is it a business that correctly predicts every geopolitical event, technological change or market movement.

It is a business that has thought about what matters, understands its dependencies, develops its people, builds credible alternatives and has information it can trust.

Its strategy is not dependent on one future being right.

That may be one of the most important distinctions between efficiency and resilience.

Efficiency asks: What is the best way?

Resilience also asks: What is our alternative?

In an uncertain world, the organisation with options retains something extraordinarily valuable.

The ability to choose.

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

Global Reporting Initiative (2021) GRI 3: Material Topics 2021. Amsterdam: Global Reporting Initiative. Accessed 20 August 2026.

International Auditing and Assurance Standards Board (2025) ISSA 5000 Adoption and Implementation. New York: International Federation of Accountants. Accessed 20 August 2026.

International Organization for Standardization (2017) ISO 22316:2017 Security and resilience, Organizational resilience, Principles and attributes. Geneva: ISO. Accessed 20 August 2026.

International Organization for Standardization (2019) ISO 22301:2019 Security and resilience, Business continuity management systems, Requirements. Geneva: ISO. Accessed 20 August 2026.

Russell Reynolds Associates (2026a) The New CEO Progression Blueprint: Expanding CEO Succession Optionality During Uncertain Times. 20 May. Accessed 20 August 2026.

Russell Reynolds Associates (2026b) Global Corporate Governance Trends for 2026. 16 February. Accessed 20 August 2026.

Russell Reynolds Associates (n.d.) The New Leadership Portrait: Understanding and Unlocking Senior Executive Potential. Accessed 20 August 2026.

World Economic Forum (2026) Global Risks Report 2026. Geneva: World Economic Forum, 14 January. Accessed 20 August 2026.

The post The Resilient Business Does Not Predict the Future. It Builds Options. appeared first on SustainCase - Sustainability Magazine.

Economic growth.
Higher productivity.
Innovation.
Investment.
More competitive businesses.
Better jobs.
Stronger communities.

These ambitions are usually captured in national strategies, economic visions and industrial policies. They set the direction for the country.

But strategies alone do not create economic value.

Businesses do.

The question is therefore not simply whether a country has a good national strategy.

It is whether that strategy reaches the businesses that drive the economy every day.

This is where business associations and chambers of commerce become essential.

Rather than acting solely as representative bodies, they can become strategic partners in translating national priorities into practical business action.

The relationship is simple.

National Strategy

↓

Business Associations

↓

Businesses

↓

Communities

↓

Economy

Every level strengthens the next.

When this system functions well, countries become more resilient, businesses become more competitive, and communities become stronger.

National Priorities Need Business Action

Governments cannot build resilient economies on their own.

Whether the objective is improving productivity, encouraging innovation, strengthening exports, reducing environmental impacts or preparing businesses for future risks, implementation ultimately happens inside organisations.

It is businesses that invest.

Businesses that employ people.

Businesses that innovate.

Businesses that manage supply chains.

Businesses that respond to crises.

National strategies only become reality when businesses change decisions and behaviours.

Business Associations Multiply Impact

Most governments simply cannot engage every individual business directly.

Business associations bridge that gap.

They understand the industries they represent.

They understand the challenges facing members.

They have trusted relationships built over many years.

Most importantly, they have the ability to translate broad national ambitions into practical actions that businesses can actually implement.

This makes business associations one of the most effective mechanisms for accelerating national priorities while ensuring they remain relevant to the realities faced by business leaders.

Building Capability Before the Next Crisis

Today’s business environment is shaped by uncertainty.

Geopolitical tensions.

Changing markets.

Technological disruption.

Cyber threats.

Supply chain volatility.

Climate-related risks.

New reporting expectations.

Businesses that only respond when disruption occurs often discover that resilience cannot be created overnight.

It must be built beforehand.

Business associations can play a central role by helping members strengthen the capabilities that improve long-term resilience and competitiveness.

This includes helping organisations improve strategic thinking, governance, risk management, decision making, sustainability reporting, human rights due diligence and value chain understanding.

These capabilities create better decisions long before they become compliance requirements.

Strong Businesses Create Strong Communities

Healthy businesses generate far more than financial returns.

They create employment.

Support local suppliers.

Develop skills.

Invest in innovation.

Strengthen local communities.

Generate tax revenues that fund public services.

When businesses become more resilient and competitive, the benefits extend well beyond the organisation itself.

Communities become stronger.

National economies become more stable.

Future opportunities increase.

A Systems Approach

Economic resilience is rarely created through isolated initiatives.

It emerges when every part of the system understands its role.

Governments provide direction.

Business associations provide leadership and capability.

Businesses create value.

Communities benefit.

The economy grows stronger.

Each part depends upon the others.

Perhaps the most successful business associations of the future will not simply represent businesses.

They will become trusted partners in building stronger, more resilient economies.

Because strong economies are ultimately built by strong businesses.

And strong businesses rarely succeed alone.

“Our role is not to tell organisations what to think. It is to provide the practical knowledge, structured methods and systems perspective that enable better decisions and help align individual actions with organisational objectives, national priorities and long term business resilience.”

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

Ackoff, R.L. (1999) Re-Creating the Corporation: A Design of Organizations for the 21st Century. New York: Oxford University Press.

Beer, S. (1979) The Heart of Enterprise. Chichester: John Wiley & Sons.

Boin, A. and van Eeten, M.J.G. (2013) ‘The Resilient Organization’, Public Management Review, 15(3), pp. 429–445.

Deming, W.E. (1994) The New Economics for Industry, Government, Education. 2nd edn. Cambridge, MA: MIT Press.

ISO (2018) ISO 31000:2018 Risk Management – Guidelines. Geneva: International Organization for Standardization.

Kaplan, R.S. and Norton, D.P. (1996) The Balanced Scorecard: Translating Strategy into Action. Boston, MA: Harvard Business School Press.

Mintzberg, H. (1994) The Rise and Fall of Strategic Planning. New York: Free Press.

OECD (2021) The OECD Framework for Policy Action on Inclusive Growth. Paris: OECD Publishing.

Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.

Senge, P.M. (2006) The Fifth Discipline: The Art and Practice of the Learning Organization. Revised and Updated Edition. New York: Doubleday.

Teece, D.J., Pisano, G. and Shuen, A. (1997) ‘Dynamic Capabilities and Strategic Management’, Strategic Management Journal, 18(7), pp. 509–533.

United Nations (2015) Transforming Our World: The 2030 Agenda for Sustainable Development. New York: United Nations.

World Economic Forum (2025) The Global Risks Report 2025. Geneva: World Economic Forum.

The post Strong Economies Are Built by Strong Businesses appeared first on SustainCase - Sustainability Magazine.

Businesses today face a continuous stream of disruption. Geopolitical tensions. Armed conflicts. Inflation. Supply chain interruptions. Cyber attacks. Artificial intelligence. Climate related events. Rapid regulatory change. Changing customer expectations.

The military coined the term VUCA to describe environments characterised by Volatility, Uncertainty, Complexity and Ambiguity. Today it perfectly describes the operating environment faced by organisations across every sector.

The question is no longer whether disruption will occur.

The question is whether organisations will be prepared when it does.

Resilience Is Built Before It Is Needed

Many organisations only begin thinking seriously about resilience after a crisis occurs.

By then it is often too late.

True resilience is developed long before disruption appears. It is built into strategy, governance, decision making and organisational capability.

As the saying goes:

Wisdom is avoiding situations where wisdom is needed.

Resilient organisations continuously strengthen themselves while conditions are relatively stable.

Compliance Alone Does Not Build Resilience

Many organisations continue to view sustainability reporting primarily as a compliance exercise.

This is a missed opportunity.

The real purpose of sustainability information is not simply to produce better reports.

It is to enable better decisions.

Decision useful sustainability information helps senior decision makers understand where significant impacts, risks and opportunities exist across the value chain. It enables organisations to allocate resources more effectively, redesign operations, strengthen supplier relationships, improve governance and identify opportunities for innovation.

Reporting should therefore become a strategic management tool rather than an administrative obligation.

Understanding the Entire Value Chain

Disruption rarely remains inside organisational boundaries.

Suppliers fail.

Transport routes become unavailable.

Critical materials become scarce.

Customer expectations evolve.

Regulation changes.

Technology transforms markets.

Organisations therefore need visibility across their entire value chain rather than focusing only on internal operations.

Understanding impacts, risks and opportunities throughout the value chain allows organisations to identify vulnerabilities before they become major problems.

It also reveals opportunities that competitors may overlook.

Better Judgement Creates Competitive Advantage

Artificial intelligence is changing how organisations analyse information.

However, technology alone does not create resilience.

Data does not make decisions.

People do.

Organisations that consistently make better strategic decisions will outperform organisations that simply collect more information.

The quality of judgement remains one of the greatest competitive advantages available.

Building Internal Capability

External consultants can provide valuable expertise.

However, organisations become truly resilient when capability exists internally.

People throughout the organisation need to understand how sustainability information supports strategic decisions, operational improvements and long term value creation.

Professional education helps organisations develop this capability while strengthening governance and reducing dependence on external support.

Knowledge remains one of the most resilient investments an organisation can make.

From Reporting to Action

Resilience does not come from producing more reports.

It comes from acting on the information they contain.

Every material impact, risk and opportunity should lead naturally to questions such as:

• What decision should we make?
• What action should we take?
• Who is responsible?
• When should this happen?
• How will success be measured?

Only then does sustainability reporting become a genuine management system rather than a reporting exercise.

The Organisations That Will Thrive

The organisations that succeed over the next decade will not necessarily be the largest.

Nor will they simply be those with the biggest sustainability teams or the most sophisticated technology.

They will be organisations that consistently make better decisions in uncertain environments.

They will anticipate change rather than merely react to it.

They will build capability before disruption arrives.

They will understand their value chains.

They will use sustainability information to strengthen resilience, improve competitiveness and create lasting value for the business, stakeholders and the planet.

In a VUCA world, resilience is no longer optional.

It is becoming one of the defining characteristics of successful organisations.

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

Bennett, N. and Lemoine, G.J. (2014) ‘What VUCA really means for you’, Harvard Business Review, 92(1–2), pp. 27–42.

Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2017) Enterprise Risk Management: Integrating with Strategy and Performance. Durham, NC: COSO.

Deloitte (2024) 2024 Global Resilience Report. London: Deloitte.

European Commission (2023) Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU as regards sustainability reporting standards. Official Journal of the European Union.

International Organization for Standardization (ISO) (2018) ISO 31000:2018 Risk Management – Guidelines. Geneva: ISO.

Kaplan, R.S. and Norton, D.P. (2008) The Execution Premium: Linking Strategy to Operations for Competitive Advantage. Boston: Harvard Business Press.

McKinsey & Company (2021) The Resilience Imperative: Succeeding in Uncertain Times. Available at: https://www.mckinsey.com (Accessed: 4 August 2026).

Nassim Nicholas Taleb (2012) Antifragile: Things That Gain from Disorder. New York: Random House.

Porter, M.E. and Kramer, M.R. (2011) ‘Creating shared value’, Harvard Business Review, 89(1–2), pp. 62–77.

Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.

World Economic Forum (2025) The Global Risks Report 2025. Geneva: World Economic Forum.

Global Reporting Initiative (2021) GRI Universal Standards 2021. Amsterdam: Global Reporting Initiative.

International Sustainability Standards Board (2023) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation.

International Sustainability Standards Board (2023) IFRS S2 Climate-related Disclosures. London: IFRS Foundation.

World Business Council for Sustainable Development (2021) Vision 2050: Time to Transform. Geneva: WBCSD.

The post Building Resilience in a VUCA World appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2023-2024 PRB Self-Assessment Report by Innovation FCU prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Innovation FCU promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

Sustainability information is not the final product

Most organisations have become better at collecting sustainability data.

They measure emissions, workforce indicators, resource use, supply-chain performance, human rights concerns and exposure to environmental and social change. They publish reports, complete questionnaires and respond to regulatory requirements.

This work is necessary. But it is not sufficient.

A sustainability report may show that a significant impact or risk exists. It does not automatically tell the board, chief executive, chief financial officer, procurement director or operations team what decision must be taken.

That is where the mandate of the sustainability professional must expand.

The objective should not be to place more information in front of senior decision-makers. It should be to help them make better decisions.

From reporting function to decision-making function

The sustainability function should become an internal decision-support capability.

Its responsibility is to connect:

Impact and risk evidence → business implications → strategic choices → accountable decisions → measurable outcomes

This requires sustainability professionals to move beyond describing what is happening and answer five practical questions:

1. Where in the value chain is the issue occurring?
2. Why is it significant for people, the environment or the business?
3. Which operational, commercial or strategic decision does it affect?
4. What credible options are available to management?
5. Who has the authority and resources to act?

Without this translation, materiality assessments can become sophisticated inventories rather than instruments of management.

The standards provide the evidence base

The major sustainability reporting frameworks already point organisations towards decision-relevant information.

The GRI Standards help organisations identify and report their most significant impacts on the economy, environment and people, including human rights impacts. It also acts as an umbrella framework as it addresses every aspect of sustainability and all stakeholders (not just the investor).

The European Sustainability Reporting Standards, or ESRS, require companies to identify material impacts, risks and opportunities using double materiality. ESRS also asks organisations to consider where these matters are concentrated within the business model, their own operations and the upstream and downstream value chain.

IFRS S1, issued by the International Sustainability Standards Board, focuses on sustainability-related risks and opportunities that could reasonably affect cash flows, access to finance or the cost of capital over the short, medium or long term.

These frameworks approach materiality from different but complementary perspectives:

• GRI Standards: What significant impacts does the organisation have on people, the environment and the economy?
• ESRS and Double Materiality: How does the organisation affect society and the environment, and how do sustainability matters affect the organisation?
• ISSB Standards: Which sustainability-related risks and opportunities could affect enterprise prospects and investor decisions?

They provide the basis for reliable analysis. The sustainability professional must turn that analysis into a management agenda.

The value-chain decision matrix

A useful decision matrix should map every significant impact, risk and opportunity against the part of the value chain where it arises.

The matrix should not be treated as another disclosure schedule. It should be used in investment committees, strategy reviews, procurement decisions, product-development processes and operational planning.

How do you put together a value chain decision making matrix? Join the FBRH GRI Reporting Programme:

From Understanding to Implementation – Complete 4 courses and the GRI Certification exam to become a GRI Certified Sustainability Professional and learn how to turn sustainability reporting into strategic decision-making.

What makes an issue decision-ready?

A material issue becomes decision-ready when management can see:

1. The location

Where does the impact, risk or opportunity arise?

This may be within the company’s own operations, but it may also sit several tiers upstream, during customer use or at the end of a product’s life.

2. The significance

How severe or financially material is the issue?

For impacts, the organisation should consider factors such as scale, scope, irremediability and likelihood. For risks and opportunities, it should consider the potential effect on revenue, costs, assets, liabilities, financing, reputation and strategic resilience.

3. The transmission mechanism

How could the sustainability matter affect the business?

For example:

• water scarcity may restrict production;
• poor labour conditions may interrupt supply;
• product inefficiency may weaken customer demand;
• ecosystem degradation may reduce raw-material availability;
• stronger workforce practices may improve productivity and retention;
• circular design may reduce input costs and create new revenue streams.

4. The available choices

Senior leaders need options, not just warnings.

The sustainability professional should distinguish between choices such as:

• avoid the activity;
• reduce or redesign the impact;
• change the supplier, location, material or process;
• collaborate with business partners;
• invest in adaptation or resilience;
• develop a new product or service;
• accept and monitor the exposure; or
• exit the relevant market or activity.

5. The decision owner

Sustainability issues rarely belong solely to the sustainability department.

The owner may be the CFO, COO, procurement director, chief risk officer, product director, human resources director or business-unit leader.

The sustainability function should provide analysis, challenge and coordination. Operational executives must own the decisions and outcomes.

Questions senior decision-makers should be asking

Questions about value-chain configuration

• How can we reconfigure the value chain to create better value for the business, stakeholders and the planet?
• Which stages of the value chain contain our most severe impacts and most material financial exposures?
• Are we sourcing from the right suppliers, regions and production systems?
• Which impacts could be reduced through changes in product design rather than downstream remediation?
• Where are we transferring costs or risks to workers, communities, customers or ecosystems?
• Which activities should we develop internally, influence through partnerships or discontinue?

Questions about strategy and capital allocation

• Which sustainability risks could materially affect revenue, operating costs, assets, access to finance or cost of capital?
• Does our current capital-allocation process reflect these exposures?
• Which investments can simultaneously reduce negative impacts, improve resilience and strengthen commercial performance?
• Which assets, technologies or business models could become less viable?
• What opportunities could arise from solving a material stakeholder or environmental problem?
• What is the cost of acting now compared with the cost of delay?

Questions about products and markets

• Does the product create more value during its lifecycle than the social and environmental costs it generates?
• Can we redesign the product to use fewer scarce resources, last longer or deliver better customer outcomes?
• Are changing regulations, stakeholder expectations or physical conditions likely to alter demand?
• Could repair, reuse, remanufacturing or service-based models create new revenue?
• Which customer needs are emerging as sustainability conditions change?

Questions about suppliers and business relationships

• Do purchasing practices contribute to the impacts identified in our supply chain?
• Are our price, lead-time and contract requirements consistent with responsible supplier performance?
• Which suppliers require development, collaboration, closer oversight or replacement?
• Where do we lack sufficient visibility beyond tier-one suppliers?
• Could long-term commercial agreements unlock investment in lower-impact production?

Questions about governance and accountability

• Who is accountable for each significant impact, risk and opportunity?
• Which decisions require board approval, and which belong to executive or operational management?
• Are incentives aligned with the outcomes the organisation says it wants?
• What information must management receive before approving a major investment, acquisition, supplier or product?
• How will we know whether an intervention has changed the underlying impact or merely improved the reported indicator?

A materiality assessment should produce a decision agenda

A double materiality assessment should not conclude with a list of material topics.

It should produce:

• a map of significant impacts, risks and opportunities;
• a clear view of where they occur across the value chain;
• an explanation of their strategic and financial relevance;
• a set of decisions requiring management attention;
• named decision owners;
• timescales and resource requirements;
• performance indicators; and
• escalation thresholds for the executive team and board.

The final output should resemble a portfolio of strategic decisions, not a reporting index.

The sustainability professional’s new mandate

The mandate can be stated clearly:

Identify the organisation’s significant impacts, risks and opportunities; translate them into their consequences for stakeholders, enterprise value and resilience; and present senior decision-makers with clear choices across the value chain.

This does not weaken the importance of reporting or compliance.

Reliable reporting remains essential. It establishes discipline, transparency, comparability and accountability. Assurance strengthens confidence in the information and the systems that produce it.

But reporting should be the visible output of a deeper management process. It should show the consequences of decisions already embedded in strategy, governance, capital allocation and operations.

From material information to material action

Sustainability creates value when it changes a real decision.

That decision may involve:

• redesigning a product;
• altering a procurement specification;
• changing a supplier relationship;
• reallocating capital;
• protecting a vulnerable workforce;
• strengthening an asset against physical risk;
• entering a new market;
• withdrawing from a damaging activity; or
• changing how value is distributed across the value chain.

The sustainability professional should therefore be assessed not only on the quality of the organisation’s disclosures, but also on whether material sustainability evidence reaches the right decision-maker at the right time and changes the quality of the decision.

From insight to implementation

SustainCase case studies and analysis can help organisations understand how sustainability impacts, risks and opportunities influence business models and value chains.

If you want to apply this in practice, FBRH’s GRI and ESRS courses and webinars can help teams build the technical competence required to identify material matters, connect them to management decisions and establish credible reporting processes. The FBRH independent assurance services can then test whether the underlying systems, evidence and disclosures are sufficiently robust.

The objective is not more sustainability information.

It is better governed, better evidenced and better executed business decisions.

Professional call to action

Review your latest materiality assessment and ask one question:

For every significant impact, risk and opportunity, have we identified the specific decision that a senior leader must take?

Where the answer is no, the sustainability process is not yet complete.

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

Committee of Sponsoring Organizations of the Treadway Commission and World Business Council for Sustainable Development (COSO and WBCSD) (2018) Enterprise risk management: Applying enterprise risk management to environmental, social and governance-related risks. Geneva: World Business Council for Sustainable Development. Available at: https://www.wbcsd.org/resources/applying-enterprise-risk-management-to-environmental-social-and-governance-related-risks/ (Accessed: 29 July 2026).

Eccles, R.G., Ioannou, I. and Serafeim, G. (2014) ‘The impact of corporate sustainability on organizational processes and performance’, Management Science, 60(11), pp. 2835–2857. doi: 10.1287/mnsc.2014.1984.

European Commission (2023) Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU as regards sustainability reporting standards. Official Journal of the European Union, 22 December. Available at: https://eur-lex.europa.eu/eli/reg_del/2023/2772/oj/eng (Accessed: 29 July 2026).

Global Reporting Initiative (2021a) GRI 1: Foundation 2021. Amsterdam: Global Reporting Initiative. Available at: https://www.globalreporting.org/publications/documents/english/gri-1-foundation-2021/ (Accessed: 29 July 2026).

Global Reporting Initiative (2021b) GRI 3: Material Topics 2021. Amsterdam: Global Reporting Initiative. Available at: https://www.globalreporting.org/publications/documents/english/gri-3-material-topics-2021/ (Accessed: 29 July 2026).

IFRS Foundation (2023) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. London: IFRS Foundation. Available at: https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/ (Accessed: 29 July 2026).

International Organization for Standardization (2010) ISO 26000:2010 Guidance on social responsibility. Geneva: International Organization for Standardization.

International Organization for Standardization (2018) ISO 31000:2018 Risk management—Guidelines. Geneva: International Organization for Standardization.

Khan, M., Serafeim, G. and Yoon, A. (2016) ‘Corporate sustainability: First evidence on materiality’, The Accounting Review, 91(6), pp. 1697–1724. doi: 10.2308/accr-51383.

Organisation for Economic Co-operation and Development (OECD) (2018) OECD Due Diligence Guidance for Responsible Business Conduct. Paris: OECD Publishing. doi: 10.1787/15f5f4b3-en.

Organisation for Economic Co-operation and Development (OECD) (2023) OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Paris: OECD Publishing. doi: 10.1787/81f92357-en.

United Nations (2011) Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework. New York and Geneva: United Nations. Available at: https://www.ohchr.org/sites/default/files/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf (Accessed: 29 July 2026).

The post Are some Sustainability Teams Missing the Point? Reporting Is Not the Outcome. appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2025 PRB Responsible Banking Progress Statement by iM Financial Group prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 3: Clients and Customers
  • 3.2 Business opportunities
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How iM Financial Group identifies and works on strategic business opportunities to increase positive and reduce negative impacts appeared first on SustainCase - Sustainability Magazine.

This case study is based on the 2024 ESG Supplementary Index by Itaú Unibanco prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• Principle 5: Governance & Culture
  • 5.2 Promoting a culture of responsible banking
• Principle 4: Stakeholders
  • 4.1 Stakeholder identification and consultation

The post Case study: How Itaú Unibanco promotes a culture of responsible banking among its employees appeared first on SustainCase - Sustainability Magazine.

Artificial intelligence is transforming almost every profession. It writes reports, analyses data, summarises meetings, generates presentations and answers questions in seconds. Tasks that once required hours can now be completed in minutes.

Many organisations therefore assume that adopting more AI will automatically make them more competitive.

That assumption deserves closer examination.

AI is democratising knowledge

Throughout history, access to information has often created competitive advantage.

Today, AI is changing that equation.

The same large language models are increasingly available to almost everyone. Large corporations, small businesses, consultants and students can often access remarkably similar capabilities.

As AI becomes widely available, technology itself becomes less of a differentiator.

The real differentiator shifts elsewhere.

Information is not the same as judgement

AI can provide information.

It can identify patterns.

It can explain concepts.

It can generate options.

What it cannot do is accept responsibility for deciding which option is right in a particular context.

Judgement requires something fundamentally human.

It requires understanding objectives.

It requires balancing competing interests.

It requires recognising uncertainty.

It requires experience.

It requires ethics.

It requires accountability.

These qualities remain difficult to automate because they depend on context rather than computation.

Sustainability demonstrates the difference

The sustainability profession provides an excellent example.

An AI system can quickly summarise the GRI Standards.

It can explain IFRS Sustainability Disclosure Standards.

It can compare reporting frameworks.

It can draft disclosures.

None of these activities determines what is actually material for an organisation.

Materiality requires professional judgement.

Evidence must be evaluated.

Stakeholders must be considered appropriately.

Subject matter experts may need to be consulted.

Impacts, risks and opportunities must be assessed.

Trade offs must be understood.

Decisions must be made.

AI can support every one of these activities.

It should not replace the judgement behind them.

The danger is not AI. It is intellectual complacency.

The greatest risk may not be that AI replaces people.

The greater risk is that people gradually stop thinking as deeply because AI produces answers so quickly.

If every recommendation is accepted without challenge, critical thinking begins to weaken.

Questions become less probing.

Alternative perspectives receive less attention.

Assumptions go untested.

Organisations may become more efficient while simultaneously becoming less thoughtful.

That is a dangerous combination.

Better questions produce better decisions

One of the most valuable skills in an AI enabled organisation is asking better questions.

Instead of asking:

“Write me a sustainability strategy.”

Leaders might ask:

What assumptions underpin this recommendation?

What evidence contradicts this conclusion?

Which stakeholders might see this differently?

What unintended consequences should we consider?

What are we missing?

AI often improves dramatically when humans improve the quality of their questions.

Boards face a new responsibility

Boards should not simply ask whether management is using AI.

They should ask whether AI is improving judgement or merely increasing activity.

Important questions include:

Is AI helping us identify better opportunities?

Is it improving our understanding of significant impacts, risks and opportunities?

Are important decisions still being challenged?

Do we understand where AI may be wrong?

Who remains accountable for the final decision?

These questions focus attention where it belongs.

Not on technology itself.

But on governance.

The future belongs to organisations that think well

AI will undoubtedly become part of everyday business.

That is unlikely to be the source of lasting competitive advantage because competitors can adopt similar tools.

Lasting advantage will come from combining AI with human capabilities that are much harder to replicate.

Curiosity.

Professional judgement.

Ethics.

Experience.

Critical thinking.

The ability to navigate uncertainty.

These qualities determine whether information becomes knowledge and whether knowledge becomes wise decisions.

A practical implication for sustainability professionals

The role of sustainability professionals is evolving.

Success will depend less on producing reports and more on enabling better decisions.

That means strengthening materiality processes.

Improving evidence quality.

Engaging stakeholders appropriately.

Understanding significant impacts, risks and opportunities across the value chain.

Providing decision useful sustainability information that creates lasting value for organisations, stakeholders and the planet.

AI can accelerate much of this work.

It cannot replace the professional judgement that gives it meaning.

Final thought

Artificial intelligence is changing how organisations work.

It is not changing what ultimately determines success.

Technology can generate information.

Only good judgement turns information into better decisions.

And better decisions remain one of the few competitive advantages that competitors cannot easily copy.

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

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