Double Materiality Assessment
At Roche, we continuously enhance our approach to sustainability by conducting thorough materiality assessments, which enable us to identify and prioritize the environmental, social, and governance (ESG) topics that are most significant to our stakeholders and our long-term business success. The outcome of the assessment informs and guides our sustainability strategy.
Our double materiality assessment (DMA) was carried out with reference to the ESRS. The methodology combines an inside-out perspective, which considers our impacts on people and the environment, with an outside-in perspective, which assesses how sustainability matters affect our business model and financial performance.
Our approach
Our assessment followed a bottom-up approach, leveraging insights from subject-matter experts across divisions and Group functions. This internal expertise was validated and enriched through the integration of external benchmarks and industry analyses.
For environmental topics, we applied impact valuation methods to assess the scale and scope of impacts. Using these methods, we first assessed the impact in physical units, such as tonnes of greenhouse gas emissions, which was then converted into monetary equivalents.
To supplement our quantitative assessment, we also conducted a qualitative assessment of the impacts, risks and opportunities (IROs) of our subtopics, engaging a core group of internal subject-matter experts to assess each IRO against defined criteria: scale, scope, remediability (for negative impacts) and likelihood. Financial materiality was assessed separately, considering the potential magnitude and probability of financial impacts.
To determine the material impacts, risks and opportunities (IROs) and subtopics, we applied a scoring-based prioritisation method, which ranks the IROs by their environmental, social or economic impact and their financial materiality. Subject-matter experts validated the results, and the process and conclusions were endorsed by the Corporate Governance and Sustainability Committee, the Chief Sustainability Officer and by the relevant business owners.
We assessed the materiality of environmental subtopics using a data-driven methodology. This involved gathering primary environmental data for our own operations and our upstream value chain across the different environmental subtopics. We then converted these into monetised impacts using impact valuation principles.
Impact valuation is a well-established approach that aims to evaluate social, environmental and economic impacts. The impact is first assessed in physical units, such as tonnes of greenhouse gas (GHG) emissions, and is then converted into monetary equivalents. This approach enables us to determine the materiality of environmental subtopics.
To supplement our quantitative assessment, we also conducted a qualitative assessment of the IROs of our subtopics, engaging a core group of internal subject-matter experts to assess each IRO. We used the results of this phase to validate the findings of the data-driven assessment.
We presented this methodology at the World Business Council for Sustainable Development (WBCSD) Enhancing Corporate Transparency forum in September 2024, welcoming input from others to further refine the process. By sharing our methodology externally, we also hope to contribute to setting data-driven DMAs as the market practice.
For our social and governance subtopics, we conducted a qualitative assessment where we collaborated with internal subject-matter experts to identify and score the IROs.