Materiality test
Materiality test
Each year, Alliander determines in a structured manner the issues to be included as a minimum in the annual report. A materiality test is used for this purpose. The assessment of the material themes forms the basis for determining the content of the integrated annual report and takes place at an early stage of the reporting process. The materiality study is twofold: the stakeholder groups assess the relevance of various themes and we make an internal assessment of the impact of these themes on the company and society.
In 2017, the existing materiality analysis was recalibrated based on input from diverse sources, including stakeholder dialogue reports, a media scan and a reputation survey. The shortlist of 56 socially significant issues, as drawn up in 2015, was adjusted this year on the basis of trend surveys and a consultation round among our internal stakeholders. As a result, the list was reduced this year to 48 issues, which served as our guideline in the materiality analysis. The materiality score from the previous reporting year was consistently taken on board in the weighting. Next, we gauged the nature and scale of the impact of each selected theme for Alliander and its stakeholders.
The outcomes from the dialogues with stakeholders and the materiality of each issue were discussed with the Management Board. It was concluded that the issues stakeholders had identified as important largely corresponded with the key themes that Alliander is pursuing. The issues identified as the most material to our stakeholders has changed compared to the annual report 2016. This concerns some minor changes in the ranking of the issues according to significance. Among other things, the Energy Transition theme has been broken down in more detail to give a more diverse and precise picture of this theme. The 15 most relevant themes served as our guideline in the process of determining the content of the annual report and are extensively dealt with in the stakeholder chapters.
The process in 5 steps
Having gone through the entire Materiality Test in previous years we performed a recalibration for the 2017 annual report based on the process below.
Step 1: Identification of relevant aspects and themes
The first step consisted in drawing up a list of significant themes for society that are relevant to the organisation. The guideline here was the list of aspects as contained in the GRI Standards guidelines and the Electric Utilities Sector Supplement. The list is updated annually and, in addition to the GRI aspects, comprises material themes from the previous year, topics put forward by stakeholders and topics for which we have set internal performance indicators. The overview of themes for 2016 was the starting point for the 2017 annual report.
Impact on stakeholders
Based on a digital survey in 2015, the stakeholders assessed the societally the significant themes on relevance. In 2016, Alliander re-examined this relevance by means of a recalibration. Based on this stakeholder input, the 48 themes affecting society were subjected to further recalibration in 2017. The results of the recalibration were classified according to stakeholder group. The outcome is a table prioritising the themes having the most significant impact from the stakeholders’ point of view.
Impact for Alliander
Next, we determined the indicative impact of all societally significant themes on the organisation in 2017. The extent of the impact was assessed internally and then broadly validated within the organisation by relevant experts. The impact model as applied within this method consists of three aspects:
Negative impact: how great is the impact on Alliander if the organisation does not perform well on the theme; how great is the impact on stakeholders if Alliander fails to manage the negative impacts on external stakeholders sufficiently?
Positive impact: how great is the impact on Alliander if the organisation performs well on the theme; how great is the impact on stakeholders if Alliander makes a positive contribution for external stakeholders?
Probability: what is the probability of these positive or negative impacts occurring, and within what time horizon.
The impact analysis provides insight into the opportunities and risks for the organisation as well as the priority that should be given to addressing the topic.
Step 2: Weighting and comparison with 2016
For the materiality test, Alliander applies a weighted average over several years. Apart from being more reliable and less sensitive to hypes and measurement errors, this approach also serves to highlight trends in the materiality of the themes.
Step 3: GRI aspects with relevance for Alliander
High-materiality themes have been matched with the corresponding effects in the GRI guidelines. This overview is the yardstick for the composition of the accountability information in this annual report
GRI aspect | Alliander theme | Description | Reference | |||
Safety and working conditions | Health & safety | Working on gas and electricity infrastructure carries inherent risks (live parts, gas, possible presence of asbestos, etc). Safe incident-free working practices are vital for everyone involved. | Our results: Employees | |||
Safe infrastructure | Gas and electricity may involve risks. The safety of our networks for everyone involved is our highest priority. Incidents in the gas and other networks and with grey cast-iron gas pipes re-emphasise the importance of our focus on safety. We work together with parties in the safety chain. | Our results: Customers | ||||
Training and development | Technology and organisations are changing continuously and at a rapid pace. Working has become lifelong learning. | Our results: Employees | ||||
Product and Service | Regulation and tariffs | The network operator's cost level in relation to the sector average forms the basis for the tariffs permitted by the Netherlands Authority for Consumers & Markets. Our tariffs and ability to operate depend largely on external factors. We try to keep the tariffs for our customers stable. This partly determines the financial resources at our disposal for investments and other purposes. | Our results: Customers, Shareholders and Investors | |||
Customer satisfaction | Customers count on excellent service, communication and handling of interruptions and complaints. We respond adequately to customer needs and actively promote customer satisfaction. | Our results: Customers | ||||
Reliability of supply | Uninterrupted availability of energy is of vital importance to society. Interruptions have a direct impact on the interests of our stakeholders. Key regulatory and supervisory frameworks ensure that our capacity planning is organised in such a way that the expansion and replacement of networks and installations is properly aligned with the needs of our customers and society. | Our results: Customers | ||||
Energy | Smart networks and data technology | The energy infrastructure is becoming smarter. The addition of IT makes it possible to manage fluctuations in energy supply and demand and respond to evolving market relationships in a reliable, efficient and safe manner. Data technology leads to more and better data and open data. This creates opportunities and also new dependencies. What arrangements and protocols are in place and what does this mean for the customer? | Our results: Customers | |||
Role in energy generation | Energy generation is increasingly becoming a matter for consumers and businesses. Network operators face numerous questions, such as whether they are allowed to give priority to renewable energy feed-in or should take responsibility for promoting renewable energy generation. | Our results: Shareholders and Investors | ||||
Emissions | Climate change, Energy usage and CO2 | The CO2 footprint from fossil energy contributes to climate change. Alliander is a link in the energy chain and thus has both direct and indirect responsibility for this issue. Directly due to, for instance, the energy usage in its networks, buildings and mobility. Indirectly due to energy usage elsewhere in the chain. The energy transition offers opportunities to develop a climate neutral and efficient energy system. | Our results: Shareholders and Investors | |||
Supplier responsibility | Chain responsibility | Outsourcing, investments and production in other countries sometimes lead to an increased risk regarding the recognition of and compliance with standards in such areas as fundamental human rights, safety and the environment. An organisation can involuntarily become involved in dubious practices such as child labour. In the Netherlands, too, careful assessment is required to see whether the local expenditures detract from or contribute to society. The assessment of suppliers in the supply chain is part of sound CSR policy. | Our results: Shareholders and Investors | |||
Public policy | Transparency | To what extent is Alliander willing, able or obliged to be open to society about its intentions, operations and decision-making? Are we transparent about subjects for which we need the cooperation of other parties (lobbying)? To what level of detail, and with what frequency, do we communicate and share information with whom? | Other information, About this report | |||
Economic performance | Economic performance | What contribution does Alliander make to its stakeholders by means of revenue, employee remuneration, donations and other social investments. How do we deal with retained earnings and payments to providers of capital and authorities? | Our results: Shareholders and Investors | |||
Innovation | To keep up with the changing energy landscape and to be ready for the energy system of the future, it is extremely important for us to be able to apply new technologies and solutions. Alliander has the ambition to play a prominent role in the energy transition. This calls for focus and choices regarding the role we want to play in innovation. | Profile Our impacts | ||||
Investment policy | As a large company, we can support social developments through investments, for example in a sustainable energy system. What factors do we consider in our investment decisions? How do these help our business units to achieve their objectives? | Our results: Shareholders and Investors | ||||
Anti-competitive behaviour and corruption | Corporate governance and business ethics | Adequate, effective and accountable supervision based on clear guidelines benefits the company and its stakeholders. What values guide our actions within the organisation and the way we do business? What supervisory mechanisms does the Supervisory Board use? Have all corruption and anti-trust risks been accurately identified and assessed, is our outsourcing procedure clear and how do we safeguard the safety and security of people and operating assets? What role do ethics play and do we know the impact on the world around us? |
Step 4: Materiality matrix
The combination of the relevance for stakeholders on the Y-axis and the impact of the themes on the organisation on the X-axis shows the theme’s impact on the level of the organisation’s social performance and thus the priority it has within the annual report. The materiality matrix provides a cross-section of the most material topics for Alliander’s annual report.
Alliander subdivides the results of the materiality analysis into three categories.
Key themes
These are the 15 themes in the materiality matrix that are distinctive in the perception of a large group of stakeholders and for our performance. These themes are addressed at length in the annual report.
Corporate themes
These are themes that, viewed across a broad group of stakeholders, receive less priority. This concerns themes that are relevant to certain stakeholders for operational reasons or must be reported on for compliance purposes. They are dealt with to a limited extent in the annual report and explained further in the GRI Index if necessary.
Potential themes
These are themes to which most stakeholders currently assign less priority and that have a lower impact on the organisation. However, these themes may in future be given more weight and are being monitored and, where necessary, maintained by Alliander. For statutory reasons, some of these themes form part of the annual report or the explanation in the GRI Index.
Step 5: Implementation
The materiality of topics as determined by the Management Board provides the basis for the design, content and management of the annual reporting process. It is decided how the topics are worked out and how these are incorporated in the information-gathering process. Business units prepare the reporting process in cooperation with the responsible departments and set out the data validation and verification arrangements. Further information on the reporting process can be found in ‘About this report’ and the GRI Index Table.