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GRI Content: G4-19

Business Materiality Matrix

Topics and Boundaries

GRI Content: G4-19, G4-20, G4-21, G4-27

The table below lists our material topics and their boundaries (i.e. whether their effects are felt inside or outside the company) based on our full materiality assessment in 2016.

Our Materiality Matrix sets out the issues that are deemed most important to our business and our stakeholders. There are 32 topics listed (from our original shortlist of 40 topics). The reason there are fewer topics than those listed in our shortlist is because we have combined certain topics that were too alike to be listed as separate issues.

There have been some significant changes in our materiality topics since the previous assessment in 2013. New topics include “Customer Relationship Management” and “Customer Privacy and Data Protection”. Tax Strategy has also emerged as a new topic (although this is not one of our priority topics), possibly because of media attention given to some major companies in the last year that have failed to pay taxes in local jurisdictions.

Material Issue GRI Material Aspect Possible Effect on SGS Possible Effect Outside SGS
Operational Integrity Occupational Health and Safety Yes The health, safety and wellbeing of people outside of SGS (including contractors, subcontractors, customers, visitors and neighbors) can be effected by the way in which SGS manages environmental, health and safety risks.
Business Ethics and Integrity Anti-Corruption Yes Maintaining the highest standard of integrity is critical to our customers’ ability to deliver trusted products and services to society. In addition, the fraudulent use of the SGS brand may present risks to individuals using products and services that they believe to be from trusted sources.
Business and Economic Performance Economic Performance Yes Economic value is distributed directly (i.e. to shareholders and through the payment of taxes which support social services) and indirectly through employment and training and through community investment.
Energy and Climate Change Energy; Emissions Yes Carbon emissions, if not properly mitigated, contribute to global warming and climate change, which affects society. SGS’s services help to reduce carbon emissions and risks associated with climate change while supporting customers in developing products and services that have fewer adverse impacts on the planet.
Diversity and Equal Opportunities Diversity and Equal Opportunity Yes Societies can fail when people become marginalized – denied employment opportunities, access to education and training, access to products and services, and benefits derived from community investment.
Respect for Human Rights Non-Discrimination; Freedom of Association and Collective Bargaining; Child Labor; Forced or Compulsory Labor Yes Societies can fail when individual human rights are not observed or respected. Human rights violations can lead to the erosion of trust and trigger social and political unrest.
Investment in Local Communities Local Communities Yes A lack of respect for and investment in local communities can lead to a lack of skills and poor employment prospects which, in turn, negatively impact local economic development.
Supply Chain Sustainability Supplier Environmental Assessment; Supplier Assessment for Labor Practices; Supplier Human Rights Assessment; Supplier Assessment for Impacts on Society; Procurement Practices Yes Poor labor practices and exploitation in supply chains can have serious consequences on workers’ health, safety, wellbeing and livelihoods. This in turn can impact local economic development as well as political and social stability.
Corporate Governance Corporate Governance Yes Inadequate management of business risks and opportunities can affect business performance, which, in turn, can negatively impact shareholder value and business sustainability.
Employee Engagement Labor/ Management Relations Yes We recruit people from local communities and we migrate employees to other communities.
Customer Privacy and Data Protection Customer Privacy Yes Exposure of confidential and commercially sensitive information can lead to fraudulent activity, such as extortion and embezzlement. A breach of trust in the management of sensitive customer data can impact our brand, our customer relationships and our bottom line. It can also impact our share price.
Customer Relationship Management/ Customer Satisfaction Customer Satisfaction Yes Poor customer management can lead to loss of business and, ultimately, business value.
Brand and Brand Protection Marketing Communications Yes Risks that are not effectively managed can affect reputation and brand, which, in turn, can lead to loss of business and, ultimately, brand value.
Market Presence Market Presence Yes Customers benefit from the expansion of our services into new markets and territories.
Investment Strategy/Mergers and Acquisitions Investment Yes Capital investments enable us to improve our facilities and enhance our services, which, in turn, benefit our employees and our customers.
Talent Acquisition and Retention Talent Acquisition and Retention Yes Employment stability benefits local economies through the payment of wages and local taxes.
Talent Development and Recognition Training and Education Yes Employees developing skills and reaching their potential can achieve fulfilling careers which in turn contribute to economic development.
Technical Developments N/A Yes Improved technical developments can benefit customers and ultimately consumers by providing enhanced services and improved standards.
Fair and Equal Remuneration Equal Remuneration for Women and Men Yes The exploitation of workers through unfair and unequal wages and benefits can impact livelihoods and impair local economic development.
Risk and Crisis Management N/A Yes Inadequate management of business risks can affect business performance, which, in turn, can negatively impact shareholder value and business sustainability.
Services Development and Innovation Products and Services Yes Customers benefit from innovation in our services and expansion into new markets and geographies.
Regulatory Compliance Compliance Yes Laws and regulations govern behavior that might otherwise pose risks to individuals, society and the environment.
Pricing Anti-Competitive Behavior Yes Fair pricing ensures that individuals and organizations along the value chain are not exploited or compromised.
Security of Company Assets Security Practices Yes The security of people and physical assets associated with our business is of paramount importance to stakeholders and local communities.
Water and Waste Management Water; Effluents and Waste No – This topic did not meet the materiality threshold. However, we recognize that these are increasingly important issues with significant local relevance to certain affiliates. We therefore oversee water and waste as part of our EHS management system and will continue to report on our performance on these issues. Human and animal health can be significantly compromised by issues linked to access to clean drinking water and pollution caused by hazardous and non-hazardous waste and effluents. The later can also affect biodiversity. Economies can also be affected if manufacturers are impacted by water scarcity or contaminated water.
Materials Consumed Materials No The overuse and eventual decline of non-renewable or valuable resources can upset biodiversity and lead to issues associated with limited resources, such as restrictive pricing, exploitation and the withdrawal of trade.
Indigenous Rights Protection Indigenous Rights No A lack of respect for traditional customs, culture and heritage as well as the ownership of knowledge and land assets can severely impact socio-economic relations.
Protection of Biodiversity Biodiversity No Biodiversity is essential to the Earth’s ecosystems, on which all people, animals and the environment depend. Loss of biodiversity can lead to economic and market failure through the loss of essential resources. It can also have a direct impact on the health and wellbeing of humans and animals.
Tax Strategy N/A No National and local economies are dependent on tax as a source of revenue. Depriving economies of revenues from taxes can significantly impact the social services on which societies depend in order to thrive.
IT Operations N/A No No.
Business Standardization N/A No No.
Role in Public Policy Developments Public Policy No No.

 

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