Materiality assessment

Sandvik has performed a double materiality assessment (DMA) to identify material topics. This assessment was supported by topics included in the Corporate Sustainability Reporting Directive (CSRD) and Global Reporting Initiative (GRI) and considered dependencies on natural, social, and human resources. The assessment resulted in material impacts, risks, and opportunities, forming the basis of this year’s GRI reporting.

The impact assessment evaluated positive, negative, actual, and potential impacts, focusing on the value chains where impacts were most likely to occur. Upstream, this included transportation of products and sourcing of minerals and metals from high-risk countries, as well as sourcing of conflict minerals and cobalt. Downstream, the focus was on transportation of products and people, the mining sites in high-risk areas, and the end-of-life of our business areas’ products.

Impacts were evaluated using scale, scope and irremediability determining the severity of an impact as well as likelihood for potential impacts. The evaluation relied on internal expertise from various areas, such as supplier management, environment, human resources, health and safety, community involvement, and law. Participants from different business areas, functions, and geographies within Sandvik brought diverse perspectives and experience on ESG (Environmental, Social, and Governance) topics in the value chain. The assessment also considered external reports, legislation, and frameworks. These sources included the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the OECD Due Diligence Guidance for Responsible Mineral Supply Chains, as well as supplier risk screening through EcoVadis and supplier audits, and were used when engaging directly with affected stakeholders was not possible or not appropriate. The impact assessment involved workshops and interviews.

In the financial materiality assessment, risks and opportunities were assessed by the magnitude of the financial consequence as well as likelihood. The financial materiality assessment was based on a short-term perspective which highlighted the most urgent topics, as well as the mid- and long-term perspective that highlight risks and opportunities that may materialize in the longer term. Based on the input collected, a threshold value for the topics was defined, above which the topics were deemed material and as such a basis for our reporting.

Sandvik has a multitude of interactions across the value chain: suppliers, customers, and our own operations and interactions related to the end-of-life process. Our supply chain and geographical footprint are examples of factors that affect the value chain and our impacts, risks, and opportunities.