A materiality assessment is an important means to ensure that annual corporate responsibility reports reflect the organization’s significant economic, environmental, and social impacts or fundamentally influence the assessments and decisions of stakeholders.1
In 2010, Merck conducted a materiality assessment to guide us in the development of our corporate responsibility framework and to ensure that our strategic approach was linked directly to our core business drivers. Our approach includes precise criteria in certain areas including: business relevance; satisfying stakeholder demands; opportunities for improvement; and areas of potential leadership.
Key issues were identified through a consideration of numerous sources, including:
- Merck corporate plans, objectives and strategies
- Company policies and initiatives related to company policies
- Employee surveys and other input from employees
- Customer feedback obtained through focus groups and other methods
- Shareholder resolutions and other feedback received through ongoing dialogue with shareholders
- Input from investors and investor groups committed to sustainable investing
- Partners, nongovernmental organizations, suppliers and other stakeholders
- Media coverage
- Stakeholder feedback on prior corporate responsibility reporting
- Industry benchmarking
- The Global Reporting Initiative (GRI), Access to Medicine Index, the UN Global Compact principles and other external guidelines
Based on this analysis, an overall set of issues were identified as those most significant to the company. The key issues in this report have been approved by Merck’s Public Policy and Responsibility Council based on the three parameters used to define and determine materiality for the purpose of our corporate responsibility reporting:
- Impact on Merck’s ability to achieve its business strategy
- Level of concern to external stakeholders
- Degree to which Merck can control and influence the topic or issue
As part of our ongoing stakeholder engagement process, we review the suggestions and expectations of our stakeholders to ensure that we are reporting on issues that are of most relevance to them, as compared with those identified through our own evaluations. In this way, we can determine the areas of our corporate responsibility approach that require further review and identify issues that we might clarify in the future.
Merck recognizes the importance of issues that may not be within the company’s immediate or total control, such as climate change, global poverty and access to medicines, particularly in the developing world. We believe that we can, however, influence progress in these areas by addressing these issues, particularly through public policy and advocacy or through partnerships with others.
We will continue to seek additional feedback in order to further refine our key corporate responsibility issues in future reports. While we had anticipated including a materiality index in this report, a new materiality assessment is being conducted in 2013 to ensure that we capture those issues that are most important to our stakeholders as well as new and evolving areas of interest.
Last Updated July 26, 2013