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Materiality matrix and the AA1000 standard

05/31/2016 - 07:05 PM

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Materiality is the "identification of the important issues for the organisation and its stakeholders", according to the definition of the AA1000 AccountAbility Principles Standard.

A materiality matrix is a way of representing the issues which have an impact on our company, crossed with the level of interest those issues have for our stakeholders.

The materiality matrix we have adopted in Telecom Italia has been developed through a methodology which included :

  • stakeholder preception review
  • press review
  • interviews with managers
  • internal considerations done by the Sustainability department of Telecom Italia

Each year we review and update our Materiality matrix.

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The materiality analysis process: how it works

Telecom Italia has reviewed its materiality analysis process with the aim of refining it and ensuring that it conforms to the new GRI G4 guidelines, thus focusing it on identifying the most relevant topics in terms of the socio-environmental and economic impact generated by the Group, both inside and outside the organisation.

Identification of relevant topics

An initial list of topics to be explored during the subsequent stages of the analysis process was identified. Numerous sources of information, both national and international, public and non-public, internal and external to the Group were analysed.

At the end of this initial screening, Telecom Italia was therefore able to draw up a list of relevant topics representing 9 macro areas:

  • Direct and indirect economic impacts;
  • Risk management and Public Policy;
  • Business ethics and promotion of human rights;
  • Market position and customer protection;
  • Compliance with national and international regulations;
  • Responsible management of human resources, promotion of diversity, equal opportunities and the health and safety of workers;
  • Responsible management of the supply chain;
  • Initiatives for local Communities;
  • Responsible management of energy resources, atmospheric emissions and waste.

Assignment of priorities

The assignment of priorities among the topics emerging from the aforesaid analysis, led to the identification of the material issues to be disclosed in the sustainability report.

During this phase, Telecom Italia assessed the importance of the topics identified from an internal and external viewpoint.

The internal viewpoint was provided by the Top Management which, through the involvement of a significant sample from all the company's departments, expressed its opinion on the relevance of each topic for Telecom Italia.

The external viewpoint was instead surveyed by organising two focus groups involving employees representing the departments that normally deal with the Group's various categories of stakeholders. These employees were asked to assess the relevance of the topics based on the perceptions of stakeholders with whom they normally have relations.

Assessing the results of the analyses allowed the topics to be put in order of priority and the materiality matrix summarising the results for the 2014 report to be created.

Validation

The validation of the topics and the whole materiality analysis process was carried out by the Corporate Shared Value department, which was assisted by the Telecom Italia Lab department assigned to survey perceptions through psycho-social research analyses. The Governance of the Corporate Shared Value department is explained in the Sustainability Governance section of this report.

Review

The review phase is due to take place as a preparatory stage prior to the next reporting cycle, with the aim of submitting the results of the analyses carried out, updated in the following year, to specific stakeholder engagement activities.

In order to make the process systematic, consistent over time, transparent and well-structured for this and future years, the "Telecom Italia Handbook for Materiality Analysis Pursuant to GRI G4" has been produced. It contains guidelines for all the activities, describing the timescales and responsibilities involved in the process itself.

Boundaries

All the topics (and therefore aspects of the GRI G4 standard) that are judged to be material have major implications both inside and outside the company.

The topics can be grouped into two categories in terms of their relevance to the different areas of the Group.

On the one hand there are cross-cutting topics that are relevant to all the companies in the Group's consolidation scope, wherever they may be, without exception, and which are relevant to all external and internal stakeholders, these being:

  • Innovation management
  • Compliance with national and international regulations
  • Anti-corruption programmes
  • Promotion of respect for Human Rights inside and outside the company
  • Management of the health and safety of workers
  • Management of the workforce, generational renewal and promotion of talent1
  • Customer listening and transparency of relations

On the other hand there are topics that are mainly relevant to Group companies operating as telephone service operators, which account by far for the main part of the Group in terms of turnover, employees and impact on external stakeholders:

  • Network coverage
  • Bridging the "digital divide" and promoting social inclusion and the digital transformation of the country by disseminating and developing ICT technology across the country.
  • "Disaster response" and business continuity
  • Sensitive data management and child protection.

These topics are undoubtedly more relevant to all the stakeholders who live in Italy, where Telecom Italia is the biggest operator and therefore the company on which stakeholders pin their greatest expectations. In Brazil, where the Group is present with one of the country's biggest mobile operators, the topics are definitely relevant to stakeholders but to a lesser extent than in Italy.

No significant changes have been recorded in the scope of activities, and therefore in relevance of boundary, in recent years, except as mentioned in Group Profile section of The Telecom Italia Group chapter.


  1. The health and safety of workers and staff management may appear to be material issues only for employee stakeholders. In actual fact they directly involve public administration and the communities where employees work and, indirectly, all stakeholders who come into contact with employees, who benefit from balanced and serene relations.