Describe how you define materiality and how this is captured in your research and/or rating methodology as well as final product.
In general, we understand materiality as defined by the International Integrated Reporting Council:
“A matter is material if it is of such relevance and importance that it could substantively influence the assessments of providers of financial capital with regard to the organization’s ability to create value over the short, medium and long term. In determining whether or not a matter is material, senior management and those charged with governance should consider whether the matter substantively affects, or has the potential to substantively affect, the organization’s strategy, its business model, or one or more of the capitals it uses or affects.”
As we offer bespoke ESG research, there is no general way of capturing our understanding of materiality in our products. Depending on the project, materiality may be defined differently and in line with the definition of the client.