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MATERIALITY AT GRAINGER

Our Approach

Our 2018 CSR report details our progress across each of the four pillars of our program: Operating Responsibly, Valuing our People, Sustaining our Environment and Serving our Communities. We have completed a materiality assessment with critical stakeholders to identify which areas of our CSR program provide value to our customers, team members, investors, suppliers and community partners. Through research, competitive intelligence, surveys, focus groups and one-on-one conversations with these stakeholders, we confirmed many of our current areas of focus and gained insight into new ones. We are excited to share our findings below, and are already hard at work integrating these insights into our operations.

The Global Reporting Initiative’s (GRI) GRI Standards are the foundation for our annual reporting approach and our materiality assessment. The GRI is an independent international organization that has pioneered sustainability reporting since 1997. They help businesses and governments worldwide understand and communicate their effect on critical sustainability issues such as climate change, human rights, governance and social well-being. Through this framework, we are able to describe the effect of our operations along the GRI Standard’s Core elements of economic, environmental, social and governance.

 

Materiality Assessment Process

Identification of Issues    The first step in preparing a report with the GRI Standards in mind is identifying material topics. Material topics are those issues reflecting an organization’s significant economic, environmental and social challenges or issues that have some substantive influence on the assessments and decisions of stakeholders.

We compiled a list of nearly 100 issues specific to industrial distribution from a number of external resources. We categorized environmental, social and governance issues into four themes: Governance and Ethics, Solutions and Stewardship, Supply Chain and People and Purpose. These themes define the scope of our assessment and will guide future conversations with stakeholders.

Internal Assessment of Business Importance    Once we identified the themes relevant to Grainger, we considered our customers’ needs, the scope and breadth of an issue, probability of risk and magnitude of effect, brand reputation, regulatory concerns, and affect to the communities where we live and work.

Stakeholder Engagement    After identifying the topics we considered most material to Grainger, we engaged with internal and external stakeholders including team members, customers and suppliers to confirm the subset of material topics and to determine the relative significance of each topic within the subset. Our objectives were to ensure representation from every part of our value chain, to accurately reflect stakeholder interests and priorities and to prioritize issues important to stakeholders. In addition, we had one-on-one discussions with analysts and investors and distributed surveys among stakeholder groups we couldn’t reach individually. We have already incorporated the feedback into our operations.

Stakeholder Engagement
Materiality Matrix and Value Chain Map    We used the findings of our materiality assessment to map the prioritized topics in a matrix. Understanding the impact of our business throughout the life cycle of the solutions we offer is critical to developing a comprehensive approach to CSR. This view offers insight into where issues matter most, while also helping to prioritize where we need to influence performance. This view creates a shared understanding of how we are improving supply chain efficiency, while providing greater value to our customers.

Materiality Matrix

A Look Across Our Value Chain

Our materiality process identifies the sustainability topics most relevant to our company, from the view of our internal and external stakeholders. In accordance with GRI Standard 103 – Explanation of the material topic and its Boundary, we’ve highlighted our most material topics and indicated where and how they affect our value chain.
Value chain maps display the primary activities and stakeholders associated with sourcing, selling and consuming a company’s services and products. This form of mapping allows us to see where our material topics affect our value chain. While many of these material topics are related to activities that occur within Grainger’s direct operations, some have implications throughout our entire value chain. The graphic above shows the boundary of each of our material topics.

KEY FINDINGS FROM OUR MATERIALITY ASSESSMENT PROCESS

  • Continuing Engagement    The interest in Grainger’s Envionmental, Social and Governance (ESG) profile suggests a need for greater communications on sustainability objectives and deeper engagement with stakeholders to address sustainability challenges and opportunities.
  • Customer Data Privacy    As technology evolves, the customer experience may be enhanced through the use of personal data. With that enhancement, new considerations arise for organizations like Grainger in processing that data and in operating in observance of applicable regulatory requirements and meeting customer expectations.
  • MRO Solutions Stewardship    Differences in customer size and complexity, industry type and our primary customer contact can make the link between the evolution of sustainability and the challenges our customers face a moving target. Our customers believe we have an opportunity to strengthen that link and create a distinct positive global sustainability effect with our products and services.
  • Inclusive and Diverse Culture    Our customers span the globe and represent every demographic group, and we best serve them when our workforce reflects their diversity. Diversity helps us better understand the different needs of our customers and deliver products and services that improve their daily lives. To give our stakeholders greater visibility to the diversity of our workforce, we learned there was value in releasing the demographic data for our workforce.
  • Thought Leadership    As suppliers continue to innovate environmentally preferable product, Grainger is positioned to use its expertise and leadership to engage with suppliers to help identify and scale policies and solutions that help reduce greenhouse gas emissions and further the circular economy.

FORWARD: What’s Coming in Our 2019 Report
As Grainger evolves, our CSR report should evolve, too. That’s why we conducted a materiality assessment this year, and that’s why our four pillars will change in our 2019 report. Look for the Forward section at the end of each pillar for a sneak preview as to how the report will adjust in 2019.