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Materiality Assessment Process

In 2019, we engaged a third party to conduct a thorough materiality assessment. This assessment gave us valuable feedback about the ESG topics that matter most to both American Water and our stakeholders. Our materiality assessment followed the Global Reporting Initiative (GRI) Standards and began with topic identification, followed by topic prioritization and concluded with a validation session with our Executive Leadership Team.

Our materiality assessment followed the Global Reporting Initiative (GRI) Standards and began with topic identification, followed by topic prioritization and concluded with a validation session with our Executive Leadership Team.

1. Topic Identification

We identified the universe of potentially relevant internal and external topics by assessing sector-specific topics prioritized by leading sustainability organizations, including GRI and the Sustainability Accounting Standards Board (SASB). We also reviewed peers, industry research and other publicly available resources to determine which topics to include in topic prioritization.

After preliminary topic identification, we mapped our ESG impacts from sourcing to customers, to help ensure topics were relevant to American Water’s scope of operations.

2. Topic Prioritization

We interviewed internal and external stakeholders to obtain evidence of our ESG impacts, risks and opportunities and analyzed evidence of each topic’s relative importance to the represented stakeholders. To supplement stakeholder interviews, we evaluated numerous third party and corporate sources. The combined input provided the relative priority of each topic.

3. Validation

After determining the critical topics identified by our stakeholders, we hosted a validation session. During this session, our Executive Leadership Team reviewed the results of the prioritization, provided commentary and confirmed the findings.

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Our Material Topics

Per the GRI Standards, we identified material topics by considering the two dimensions of the materiality principle:

  • The significance of our organization’s economic, environmental and social impacts; and
  • Our substantive influence on the assessments and decisions of stakeholders.

While all ESG topics are important to our company and warrant effective management, we focus this report on those topics that are most material to our business. These topics, shown below, are the focus of this report. We will monitor, manage and report on each of our material topics.

Our Prioritized Material Topics

AW_materiality-matrix3

1Also important to American Water
2Also important to Regulatory Agencies & State Utility Commissions
3Also important to ESG Advisory & NGOs/Activists

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