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Dual Materiality for a Global Energy Leader: Efficiency and Regulatory Compliance with AWS and Avvale

Founded in Italy in 1962, our client is now the largest electric company in the country and a global leader in the energy and renewable sources production sector. With a strong focus on sustainability and innovation, the company extends its influence across a broad landscape, operating in 30 countries, with the aim of delivering increasingly sustainable and reliable energy to over 75 million end-users worldwide.

The Challenge

Our client engaged Avvale as a technology partner to address a significant challenge related to improving sustainability efforts: translating its materiality analysis model, a benchmark in the energy sector, into a computer application supporting the Sustainability Planning function.Two primary factors drove this need: constantly evolving ESG regulations and the opportunity to steer innovation in an increasingly sustainable direction. 
These factors highlighted the necessity of establishing a more robust and structured governance in the materiality analysis process.

The project aimed to revamp the "Innovation and Sustainability" and "Digital Hub" areas by introducing a customized solution designed to replace the previous, less efficient and intuitive one. Until then, the information collection and processing process had been lengthy and cumbersome: surveys were sent to suppliers through an online platform; the results, initially collected and organized in spreadsheets, were then manually input into the existing platform, whose processing times had become challenging to sustain.

To streamline this process, there was a need to implement a single integrated solution capable of centralizing all materiality-related data, allowing for a more coherent approach to regulatory sustainability requirements.
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The Approach

Building on a strong client relationship and well-established expertise in sustainability matters, Avvale guided the company in selecting the most suitable technology for this innovation process.

Following a detailed analysis of the client's needs, Avvale translated them into macro and micro functional applications, developing a tailor-made application based on AWS cloud services. The result is a high-performing and intuitive platform enabling the company to efficiently conduct materiality and dual materiality analysis, generating part of the reporting destined for the DNF. An essential aspect is related to the timelines of the previous application, reduced through integrating surveys into the platform, ensuring real-time reporting.

To further enhance the process, Avvale implemented a Machine Learning algorithm that analyzes content in stakeholder-related documents, providing a materiality ranking for the company. This text analysis algorithm complements more traditional stakeholder interviews, reducing time spent on reading and analyzing documents helpful in defining the materiality matrix.

All of this has allowed our client to achieve effective governance of the entire ESG process and, more specifically, the following phases:

  • identification of material themes;
  • identification and weighting of stakeholders;
  • involvement of internal and external stakeholders;
  • production of reporting in materiality, with a view of both classic and dual materiality.
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The Impact

Introducing a new platform has revolutionized the company's materiality process governance, providing a high-performing and user-friendly application that has allowed for scheduling the various phases of the process, managing openings and closures, as well as functionalities and activities.

Sharing best practices has facilitated alignment across the entire group with the holding, ensuring the adoption of a common approach in engaging internal and external stakeholders through a customized common matrix regarding engagement methods and assessment content.

The integration of questionnaires has increased speed and efficiency, enabling real-time report generation and drastically reducing timelines compared to previous processes. Furthermore, thanks to the use of the machine learning algorithm, the analysis of stakeholder documents has been optimized, replacing detailed manual document analysis with a tool capable of automatically providing reliable classification.

In broader terms, materiality analysis has identified the most relevant aspects related to the client's sustainable business model and the needs of its stakeholders, highlighting their interconnections with the 17 Sustainable Development Goals of the 2030 Agenda. This constant monitoring of stakeholder expectations, known as "dynamic materiality," helps understand how relevant themes change over time, identify targeted ESG objectives for long-term value creation, and determine the content to include in corporate disclosure documents.

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