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Issue Identification and Description

Both the number of material issues and their descriptions varied immensely between companies. The average number of issues included in the matrices we reviewed was 23, with a range from 7 to 69. Companies used different formats such as color, symbols, size of dot, and arrows when presenting issues in the matrix. Symbols or colors were used to denote certain themes, mostly along the environmental, social, and governance dimensions.2 7 For example, Thomson Reuters uses different symbols for the categories Community, Workplace, Environment, and Marketplace, whereas Enel uses three different colors for the categories "Business and governance," "Environmental management," and "Social."28 Another 5.5% of the sample varied the size of the issue dot, which most often represented the degree of control the company had over the issue.29 Finally, 4.4% of matrices included an arrow either in place of the dot or next to the dot to show how the issue's importance had increased or decreased in the previous years or how it was predicted to change in the future. For example, UBS uses up or down arrows to signify whether an issue is likely to increase or decrease in relevance to UBS stakeholders and significance to UBS's performance.30

Stakeholder Engagement at Kepco

FIGURE 6.1 Stakeholder Engagement at Kepco

Source: Kepco. Kepco 2012 Sustainability Report, kepco-enc.com/ webzine_business-kopec/sr_2012_e.pdf, p. 20, accessed May 2014.

Dimension Definitions and Labels

Most companies (88%) use the X-axis for the company dimension and the Y-axis for the society or stakeholder dimension. The remaining 12% simply reversed them. Most companies also adhere closely to Gill's recommendation of labeling the company axis as "Significance to the company/organization" and the society or stakeholder as "Significance to stakeholders/'31 but very few explain the meaning of "significance" on either axis. For the company dimension, significance is typically defined in terms of impact on strategy, financial performance, and sometimes reputation. The Norwegian petroleum company Statoil defines the company dimension clearly, saying, "The impact on Statoil was assessed based on factors such as potential financial impact, reputational impact, environmental and social impact, corporate strategy and key operations and industry comparison and standardisation."32

Because the stakeholder dimension contains diverse stakeholders with different interests, it is even harder to define, let alone know, what it means in the aggregate. As with the company dimension, its meaning depends upon what data are used and how different data are aggregated. One of the better explanations for this dimension comes from the Danish food producer Danisco: "In our matrix we rank the issues not only based on the number of stakeholders that raise the issue, but also the level of interest or concern that any one stakeholder group may have. Items that are of high concern to our most important stakeholders, customers, and employees may rank high on the interest continuum."33

Although far less frequent, some axis definitions add other elements to "significance" or "importance." The most common additional element, although relatively atypical (found in only 12% of the population studied) and with substantial variation itself, is to include a component of time on the company axis. For example, Nestle labels its X-axis "Current or increasing impact on Nestle," while Ball Corporation's is "Current or potential impact on Ball."34 Clearly, " increasing" and "potential" are different ideas; the first is already happening and the second is something that might happen. In either case, no explanation is given regarding how the present and future were weighted in evaluating an issue from the company's perspective. Furthermore, the time dimension is rarely defined or quantified. Ford is one exception: "Though we consider possible impacts and importance out to 10 years, three to five years is the timeframe in which Ford can make meaningful changes in our own actions based on our internal planning and production cycles."35 Still, the company did not explain its weightings between present and future.

 
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