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Materiality and Stakeholder Engagement

Materiality process

In 2014, we completed our first materiality assessment of economic, environmental, and social issues.

Materiality Analysis

We conducted a quantitative, stakeholder-driven approach to identify and prioritize the sustainability issues material to our company and our stakeholders. The analysis leveraged the Accountability AA1000 Stakeholder Engagement Standard and identified issues were aligned with the Global Reporting Initiative (GRI) G4 Reporting Principles and Standard Disclosures.

Stakeholder identification

We began by establishing nine stakeholder groups:

  • Customers
  • Suppliers
  • Peers
  • Shareholders
  • Non-governmental organizations
  • Community leaders
  • Regulators / government
  • Employees
  • Leadership

To represent the interests of each identified stakeholder group, we selected individual stakeholders using methods appropriate to the type of stakeholder. For example, the largest suppliers by total spend were selected to represent the Suppliers stakeholder group and the largest customers by total sales were selected to represent the Customers stakeholder group.

Identification of potentially material issues

We researched publicly-available information for each stakeholder selected, compiling a list of sustainability issues from various sources, including:

  • Websites
  • Annual reports
  • 10-K filings
  • Corporate social responsibility reports
  • Materiality matrices
  • Mission statements
  • Questionnaires

For this first year, we did not directly contact stakeholders and decided to rely solely on our external research once we determined that the research provided a sufficient understanding of the issues necessary to support the materiality assessment. However, the information available from internal stakeholders, primarily employees, was limited to social issues and did not adequately address economic or environmental topics.

We plan to expand our employee engagement approach to gather information on economic and environmental issues and incorporate internal stakeholders in the future. This year, our preliminary issues list was limited to issues identified by external stakeholders.

Determining issue significance and alignment with GRI G4 aspects

Each issue identified was initially rated on a four-point scale based on the significance of the issue to the stakeholder. Issues which were not mentioned by the stakeholder in the available sources were deemed unimportant to the stakeholder and were scored on the lower end of the scale. Issues which were either mentioned in multiple public sources or published by the stakeholder as organizational goals, performance indicators, or listed as an issue of high importance in a materiality matrix were scored on the higher end of the scale.

After rating the significance of each issue by stakeholder, we converted the issues into a common terminology using the 46 aspects included in the economic, environmental and social categories of the GRI G4 Reporting Principles and Standard Disclosures. We then aggregated the ratings for each aspect across the external stakeholder groups to calculate the average rating of each issue by group.

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Stakeholder prioritization

To help drive our focus to the most important issues, we weighted each stakeholder group based on the group’s influence and dependence on Sonoco.

  • Highly influential stakeholder groups are most able to impact Sonoco’s achievement of strategic objectives.
  • Highly dependent stakeholders groups are more positively or negatively impacted by Sonoco’s operations.

Each stakeholder group was assigned a relative influence and dependency score based on a three point scale, resulting in each group’s aggregated aspect ratings being given greater or less importance.

Management review and determination of material aspects

Sonoco management, through the Corporate Sustainability Council, assessed the significance of each aspect to Sonoco’s business objectives. The Council is comprised of leaders from across the company, including but not limited to:

  • Investor Relations
  • Internal Audit
  • Global Sustainability
  • Global Technology
  • Marketing and Innovation
  • Global Environmental Services
  • Human Resources
  • Corporate Communications
  • Consumer Products

Management convened a workshop to review and rate the twenty-three aspects determined most significant to external stakeholders. The workshop participants rated each aspect on a four-point scale based on the aspect’s significance to Sonoco. An aspect’s significance was defined as the influence it has on Sonoco’s capacity to achieve its business objectives. Low rated aspects do not impact Sonoco’s capacity to achieve its business objectives whereas high rated aspects greatly contribute to the achievement of Sonoco’s business objectives. At the end of the workshop, an average of all the participants’ scores by aspect was calculated.

For each aspect, the external stakeholder ratings and management’s average ratings were plotted on a graph with the y-axis representing the significance of an aspect to external stakeholders and the x-axis representing the significance of an aspect to Sonoco’s business. Aspects rated highly by both external stakeholders and management were considered to be material. The materiality matrix was reviewed and approved by management and will be included in Sonoco’s 2013-14 Corporate Social Responsibility Report.

Future analysis

We will build on this year’s progress and continue to refine the materiality assessment process. Further development over the coming years will include greater engagement with our employees on sustainability issues and seeking feedback directly from our external stakeholders. Sonoco will continue to proactively identify and manage the economic, environmental, and social issues material to our stakeholders.