Materiality Q&A SAP and Hankook Tire & Technology Q. Where do you currently stand on your double materiality journey and how has your approach to materiality evolved? Hankook Tire & Technology We fully integrated the double materiality perspective for the first time in our 2024 ESG Report. We redefined the axes of influence for each topic to run a more structured and focused analysis aligned with the principles of double materiality. We also incorporated metrics from global frameworks and international standards, which has strengthened the consistency and relevance of our assessment. We’ve been able to evaluate the significance and impact of issues with greater precision and ensure those insights are linked to our business strategy. SAP Our materiality journey also accelerated in 2024, when we carried out our first CSRD-compliant double materiality assessment. We’d already applied a double materiality lens using a GRI-based approach, but this new process was a big step up in complexity and depth. Guiding internal experts through detailed interviews without overwhelming them was challenging, but at the same time incredibly valuable, as it allowed us to strengthen understanding and buy-in for double materiality within SAP. All of this resulted in more comprehensive insights, which strengthen our governance structures and influence decision-making. Q. How are the results of your materiality assessment integrated into your strategic planning and decision-making processes? SAP We’re focused on ensuring our materiality assessment drives not just reporting, but real action. It’s both a cultural shift and a structural one – leveraging legal requirements to drive change. CSRD gave us the mandate to assign clear ownership and track progress across the business. We developed clear governance for the impacts, risks and opportunities (IROs) identified in the double materiality analysis, assigning owners and bringing together metrics, targets and policies. As a result, we have seen improved transparency and accountability across the company. We’ve already taken the important step of bringing the non-financial KPIs relevant for executive board compensation to the same reporting and auditability level as financials. The next step is to bring them to the same steering level as financials. We’re working to embed sustainability directly into processes, integrating non-financial aspects alongside financial ones in decision-making. One example is our location strategy, where environmental and social criteria now sit alongside traditional business metrics. We’re focused on ensuring our materiality assessment drives not just reporting, but real action. SAP Hankook Tire & Technology The results of our materiality assessment directly shape our environmental, social and governance (ESG) priorities, how we manage risks and opportunities, and our key performance indicators. We don’t just track these outcomes, we elevate them to our ESG Strategy Committee, who define our strategic focus areas, and to our operational committees, who use them to shape the initiatives they develop. This ensures that material issues actively inform leadership discussions and company-wide planning. In some cases, it’s led to tangible enhancements in our operations. For example, we identified carbon emissions and labor practices in our supply chain as critical issues, leading us to implement specific actions that align with our business goals. Q. Have any new material issues emerged in your latest assessment that you didn’t identify in previous years? If so, what do you think brought those issues to the surface? SAP Yes, we’ve seen a few changes. Some were driven by the structure of the European Sustainability Reporting Standards (ESRS). For example, what we previously reported under “human rights” we now frame as “workers in the value chain”. That shift has prompted broader internal conversations about human rights beyond our employees. It’s been a powerful mindset change. We also identified responsible artificial intelligence as a new material topic. These emerging issues are encouraging us to think more deeply about our responsibilities across the value chain and in fast-moving areas of innovation. Hankook Tire & Technology One clear shift in our latest assessment was the rising importance of human rights. With growing attention to supply chain due diligence laws, we recognized the need to look beyond employee rights and take a broader view of human rights across the entire value chain. As a result, human rights moved up significantly in our prioritization, rising from 16 th place last year to 8th this year. We now consider it a top-tier material issue. Q. Can you share examples of how collaboration across departments has strengthened the materiality process and influenced your strategy? Hankook Tire & Technology We’ve learned that without strong cross-functional ownership and leadership engagement, it’s difficult to generate meaningful outcomes. To enable this, working groups are part of our ESG operational structure, with involvement from cross-functional teams including sustainability, finance, procurement, legal and operations. This ensures that departments across the business are aligned and assume clear responsibility to contribute actively to ESG execution. SAP We’ve had strong collaboration between finance, sustainability and investor relations for many years, since we published our first integrated report in 2012. CSRD has strengthened that and involved many more teams. The process goes much deeper into the organization. We made a deliberate choice to involve subject-matter experts early in the process, so they’re not just reacting to what’s material but actually steering it. One team that’s really stepped up is our risk management function. They’ve invested time in refining how we frame and assess risks and they’re helping integrate sustainability into SAP’s long-standing enterprise risk systems. Q. How do you see the materiality process continuing to evolve in the future and what advice do you have for other companies? Hankook Tire & Technology We anticipate that future assessments will become more dynamic and data-driven. Proactive stakeholder engagement and alignment with rapidly evolving regulations will be crucial. Our advice is to start by identifying the issues most relevant to your business context, rather than aiming for a perfect system. Then build cross-functional collaboration and use the results as a foundation for action. The key is to focus on what drives real change – not just what looks good on paper. SAP Our first recommendation is simple: just start. You won’t be able to plan for every detail upfront and you’ll have to go back and forth to adjust as part of the process. Involving a wide range of people early on helps ensure a more meaningful and shared outcome. Second, try to find ways to leverage reporting to drive action. As sustainability professionals, our added value should be to bring the real intention of reporting requirements to life – not to drown in the collection of data points, but to find meaning in transparency, drive accountability through disclosure and ignite real-world, sustainable action. With growing attention on supply chain due diligence laws, we recognized the need to look beyond employee rights and take a broader view of human rights across the entire value chain. As a result, human rights moved up significantly in our prioritization, rising from 16th place last year to 8th this year. Hankook Tire & Technology Myunggeum An Corporate Social Responsibility Senior Manager Hankook Tire & Technology In this conversation, SAP and Hankook Tire & Technology share how their materiality assessments are evolving to meet new expectations. They explore how the process is driving cross-functional alignment, developing strategic priorities and helping turn reporting into a tool for business transformation. Michael Link Lead, CSRD Reporting, ESG Reporting Team SAP Mareike Parisi Strategy Lead, Corporate Sustainability SAP SAP is committed to helping the world run better and improving people’s lives. As a global leader in enterprise applications and business AI, SAP stands at the nexus of business and technology. For over 50 years, organizations have trusted SAP to bring out their best. SAP is headquartered in Germany, with more than 105,000 employees. Hankook Tire & Technology is a global leader in the tire industry. It produces 100 million high-quality tires yearly and supplies them to 160 countries worldwide. It is headquartered in South Korea and has over 20,000 employees globally. More about Hankook Tire & Technology More about Hankook Tire & Technology More about SAP More about SAP