Materiality Interview Series – Richard Pearl, Global Corporate Responsibility Officer at State Street
Each Sustainability report has its own story. As industries, challenges, leaderships, corporate cultures, and people vary from one company to the other, not a single Sustainability report is supposed to look like the next. But what about material aspects? Are they really that different among several industry peers? Because we were curious about the materiality differences between companies, we conducted a benchmark analysis between 50 materiality matrices, out of 50 companies coming from 5 key industrial sectors, and asked their Sustainability Managers to testify about their materiality assessment processes.
This “Materiality Interview Series” will help all Sustainability and CSR professionals identify the most effective processes and most relevant sources to assess their materiality and the best design ideas to create good-looking matrices. As a first guest, we are proud to welcome Richard Pearl, Global Corporate Responsibility Officer and Vice President of Corporate Citizenship at State Street.
Q: Hi Richard! What exactly do you do at State Street ? What are your missions?
A: I am the Global Corporate Responsibility Officer and a Vice President of Corporate Citizenship at State Street. I oversee the day-to-day management of CR issues, with the Office of Environmental Sustainability and the CR Report/Communications functions reporting to me. I chair our CR Working Group, comprised of 60 employees from all business lines, staff functions, and geographic areas. I am a member of State Street’s Executive Corporate Responsibility Committee, which reports to State Street’s Board of Directors.
How long has State Street been publishing Sustainability reports? And conducting a materiality analysis?
State Street has been publishing sustainability reports since 2003, with our first report based on GRI in 2004. We have conducted two materiality analyses; the first in 2011.
Your last report (published in 2014) is one of the few GRI-G4 report in your industry. How did you get your hand on this new framework?
We have been GRI Occupational Stakeholders for several years and knew well in advance of the evolution from G3 to G4. In addition, I attended the GRI G4 kickoff event in Amsterdam in 2013.
What tools were you using in the process of creating your Sustainability report?
We have an internal data collection tool for collection of information from State Street personnel.
We hired a consultant to assist us with our materiality mapping of both internal and external stakeholders.
We had an outside stakeholder group provide us with their feedback on the direction of our CR program and the issues that were most important (from their perspective) for us to report on.
Was your company used to conduct stakeholders engagement and materiality analysis processes?
We conducted both using internal staff as well as external stakeholders. In both cases we used consultants to help us manage the process.
What was your main materiality sources?
We relied predominantly on internal sources from our three main regions (North America, EMEA and Asia Pacific) but also engaged key external stakeholders to review and opine on our conclusions.
What are your key material aspects? How different are they from your industry peers and competitors?
There were 31 key material aspects (listed below). The top five are followed by an asterisk. Even though State Street is in a distinctly unique niche in the financial services industry, we have observed that our key material aspects are fairly similar to the industry, in general, and our peers specifically.
1) Consumer data protection and privacy*
2) Customer satisfaction *
3) Economic value generated and distributed *
4) Regulatory compliance *
5) Responsible marketing *
6) Talent recruitment and retention *
7) Anti-corruption policy and training
8) Employee incentives and compensation
9) Strengthening communities
10) Wealth and income creation in society
11) Diversity, flexibility and inclusion
12) ESG consideration in investments
13) Professional development and training
14) ESG / risk audits
15) Public policy & advocacy
16) GHG from operations
17) Impacts from business travel and commuting
18) Proxy voting
19) Gender compensation equality
20) Health, safety, and well-being
21) Financial implications of climate change
22) Environmental and social product management
23) Employee operational notice periods
24) Promoting social responsibility in the supply chain
25) Environmentally preferred suppliers
26) Paper and other materials used
27) Local job creation
28) Fair competition
29) Energy efficiency
30) Human rights policy and training
31) Water use
What type of design did you choose to illustrate your materiality matrix? Why?
Our consultant came up with the basic framework design showing issues in a heat map of four general quadrants measuring relative importance to the company and relative importance to external stakeholders. Our internal Marketing department then completed the design for our CR Report.
What was your biggest challenge when working on your Sustainability report? How did you overcome it?
Tight deadlines are always a challenge. We overcame that by starting the process earlier, and making sure we stayed on top of all contributors to stay on schedule. Collecting robust data and information that clearly reflects the efforts that have been devoted to CR/Sustainability management is an annual challenge, as the bar is constantly being raised for what constitutes a good report. We made an effort to educate our internal data providers in order to address that issue. That has resulted in us creating a training module which will be mandatory for all current/future data providers.
To conclude, what makes a good Sustainability Report and Stakeholder Engagement process in your view?
Executive understanding and buy-in; a thorough data collection process; education of internal data providers; clear graphics; strong consultants – including assurance verification (State Street was one of the first US-headquartered financial company to have its sustainability report audited); a schedule that allows for stakeholder opinions to influence the final Report (not just asking them for a cursory review when the Report is in its final stages of completion); a dedicated team to oversee the entire process.
We greatly thank Richard for this great testimonial! Interested in learning more about Materiality? Download our free benchmarking e-book here!