1.5 Double materiality assessment
Introduction
At PostNL, we engage with our internal and external stakeholders on a diverse range of sustainability matters within the environmental, social, and governance (ESG) domains. To identify the most relevant topics, we apply a two-fold approach; on the one hand, the impact PostNL has on society and its stakeholders (inside-out view), and on the other hand, the risks and opportunities of these sustainability related developments on PostNL (outside-in view). This approach is known as the double materiality assessment (DMA).
Based upon initial steps taken in 2022, and subsequent steps taken during 2023, PostNL finalised the DMA process, including value chain identification and mapping, internal and external validation sessions, and approval of the DMA process and outcome in the first half of 2024.
This section outlines our methodology, process and material topics identified.
1.5.1 Methodology
We performed our DMA process in line with the European Sustainability Reporting Standards (ESRS), and identified the topics which are the most relevant, (read: material) and therefore are addressed in our 2024 sustainability statement.
Identification of topics
PostNL has considered the full scope of ESG sustainability matters as prescribed by the ESRS as well as any other matter that is material from an entity-specific perspective.
The compilation of our long list of potential material topics involved gathering, defining, refining, and substantiating potential impacts, risks, and opportunities from a variety of inputs, including:
- Input from previous materiality assessments and third party consultation sessions
- Impact and risk assessments
- Desktop research, which encompassed:
- Peer reviews
- Analysis of market trends
- Sector reports
- Insights from benchmarks and ratings
- Media searches
- Stakeholder dialogues
- Relevant policies, reports, and surveys.
These diverse inputs helped to ensure a thorough and well-rounded identification process, forming the foundation for our subsequent materiality assessment.
Business activities and value chain mapping
A key starting point of our DMA is understanding the context in which we operate and mapping our value chain. We created a comprehensive overview of PostNL’s business activities. This overview enables us to assess which sustainability matters are caused by PostNL, which we contribute to, or are linked to our operations, products, and services through direct or indirect relationships across both our upstream and downstream value chain. For more information, please see the infographic later in this section.
Assessing impact, risks and opportunities
The ESRS require a DMA that encompasses both an impact and a financial materiality assessment. The impact materiality assessment takes an 'inside-out' perspective, evaluating the organisation’s actual or potential and positive or negative impacts on people and the environment. In contrast, the financial assessment adopts an 'outside-in' view, considering the actual or potential risks and opportunities that may have financial implications for the organisation. A sustainability matter may be considered material based on its impact, its financial significance, or, as is often the case, both.
Impact materiality
Impacts related to sustainability matters on people and the environment can be either positive or negative, actual or potential, and may occur over the short, medium, or long term. To see where these impacts arise within our value chain, please see the infographic later in this chapter. To quantify the impact materiality, we score on four key parameters: scale, scope, remediability, and likelihood.
Each parameter is evaluated on a 5-point scale. Materiality thresholds have been set based on the ESRS guidelines, supported by a technical approach and informed professional judgement. These thresholds were also established in alignment with our ERM process to ensure consistency across the organisation.
Financial materiality
Our approach to assessing risks and opportunities is focused on understanding the interconnections between PostNL’s organisational impacts, dependencies, and the resulting risks and opportunities. This has enabled us to evaluate how negative impacts might translate into risks, while positive impacts could present opportunities. Both actual and potential impacts were considered, with an emphasis on their long-term effects on enterprise value.
Risks and opportunities related to sustainability matters affecting people and the environment can impact a company’s financial position, performance, or cash flow in the short, medium, or long term. Information into where these risks and opportunities occur are visualised in the infographic later in this section. To quantify the financial materiality, we score on two parameters: the magnitude of the financial effect and its likelihood. Materiality thresholds were set in line with the ESRS guidelines, supported by a technical approach and professional judgement.
To ensure alignment with our existing processes, we applied the same scale and categorisation of risks and opportunities used within our ERM framework. We are currently focused on identifying the optimal method to integrate the financial risks and opportunities identified through the DMA into our ERM framework, please see page 84 in the Risk and opportunity management chapter for further information on the integration of the DMA with ERM, IC, and our strategic plan.
Data sources, scope of operations and assumptions
For our DMA process, we carefully selected the data sources, scope of operations and assumptions across the environmental, social, and governance (ESG) dimensions to ensure a comprehensive evaluation.
Environmental dimension
For the environmental dimension, input parameters included data from spend analyses using the CE Delft methodology to set science-based targets (SBTi), assessments of greenhouse gas (GHG) emissions, and studies on renewable energy usage. These inputs were applied throughout our entire value chain, from suppliers to customers, taking into account regulatory impacts such as the EU’s Packaging and Packaging Waste Regulation (PPWR).
Social dimension
For the social dimension, input parameters were drawn from employee feedback, dialogues with external stakeholders, and labour inspection reports. This covered key aspects such as health, safety, and working conditions for both employees and non-employees, including our delivery partners.
Governance dimension
For the governance dimension, input parameters included corporate policies, compliance assessments, and internal dialogues and surveys. These provided insights into our corporate culture and governance effectiveness, particularly in reducing unethical behaviour and enhancing overall business performance.
1.5.2 DMA process
Following the materiality overview and identification of potential impacts, risks, and opportunities, we validated with internal and external stakeholders, and the outcomes were formalised by Board of Management and Supervisory Board approval.
Validation of topics
After the identification of potential impacts, risks, and opportunities, we conducted several consultation sessions across the ESG domains with key internal stakeholders. These sessions aimed to validate the descriptions and associated scoring of the identified IROs. Drawing on the expertise of colleagues from departments such as ESG strategy, Group Reporting, business owners, subject matter experts within PostNL, Risk Management, and Internal Control, we validated our assessments. This collaborative approach has strengthened our understanding and evaluation of impacts, risks, and opportunities. Additionally, we validated the outcomes with external stakeholders. Amongst others, we organised sessions in 2024 with our business partners, investors, customers, governmental bodies, thought leaders, NGOs, and employee representatives, as embodied by our trade unions and works councils. The insights and feedback from these discussions played a critical role in ensuring our assessments were aligned with stakeholder expectations and requirements.
Governance
Once we consolidated feedback from both internal and external stakeholders, the results were discussed in the Audit Committee and reviewed and approved by the Board of Management and the Supervisory Board. This final step in the process formalised the outcomes of our DMA but also ensured PostNL's strategic objectives and rigorous governance processes are aligned accordingly.
1.5.3 Material topics
Through comprehensive documentation, continuous reviews and updates, and validation sessions with both internal and external stakeholders, combined with our robust internal control procedures and governance structure, PostNL has identified, to the best of its ability, all materially relevant topics for 2024. Our goal is to manage these material topics effectively. For each of the 21 material topics, we have defined the boundaries and pinpointed where they could occur within our value chain. For more information, please refer to the visual representation of material topics.
We acknowledge that the list of material topics may evolve over time. Recognising that this is the first year we performed an ESRS-compliant DMA, and additionally the DMA is an ongoing process, we are committed to continuous improvement. This includes integrating lessons learned, incorporating new insights, and adapting to emerging guidelines. This approach will help us refine our understanding of impacts, risks, and opportunities, ensuring our sustainability assessments remain relevant and accurate in the long term.
The 21 identified material topics relate to one or more sustainability matters as identified by the European Sustainability Reporting Standards (ESRS). Based upon this, PostNL reports upon their specific topical standard requirements. We will present the connection between the identified material topics and ESRS topical standard requirements per ESG disclosure chapter.
Some topics were identified as not material for PostNL. These topics have been analysed as part of our DMA, concluding that biodiversity, and water and marine resources are not material topics within our value chain, including both upstream (suppliers) and downstream (customers) activities, as well as our own operations.
Biodiversity
As a logistics company, PostNL’s core activities—collecting, sorting, and delivering—are less resource-intensive compared to industries like agriculture, forestry, or heavy manufacturing, which have a more immediate and measurable effect on ecosystems, land use, and biodiversity. Most of PostNL’s environmental impacts stem from emissions related to vehicle use (CO2e and nitrogen), rather than activities that directly alter ecosystems, such as land conversion or deforestation. However, due to its interconnected nature with broader topics such as climate change and air pollution, we address biodiversity from those perspectives.
Our primary impact on biodiversity arises from the use of our vehicle fleet, which results in CO2e and nitrogen emissions. To tackle these challenges, PostNL has implemented a comprehensive carbon reduction plan based on science-based targets, aligning with the commitments of the Paris Agreement. This plan includes reducing GHG emissions and increasing the use of renewable energy. For more information on our carbon reduction initiatives, please refer to the environmental disclosures, Our performance in section Climate change and Our performance in section Pollution. These initiatives indirectly help mitigate biodiversity loss, albeit as part of our climate and air pollution strategy.
When building or renovating a sorting centre, we conduct a comprehensive flora and fauna study to better understand the local ecosystems and take proactive measures, such as installing nesting boxes, to promote these ecosystems. Even though we conduct nature assessments on our sites, no sites were deemed to have a significant biodiversity impact or in proximity to critical biodiversity.
In conclusion, while biodiversity is not considered a material topic for PostNL, we remain committed to addressing it through our broader focus on reducing emissions and air pollution. Our efforts to protect biodiversity are reflected in our supplier guidelines and environmentally responsible practices.
Water
While we recognise that water may be used during the manufacturing of vehicles, machinery, and packaging materials, these activities occur outside of our direct operations and are typically associated with long-term equipment use or materials that are reused or recycled wherever possible. As a logistics company, PostNL’s direct contribution to water consumption in these areas is minimal.
Within our own operations, water usage is limited to our offices and sorting centres, where we actively monitor consumption. We have implemented water-saving installations and technology that allow us to track usage on a monthly basis and swiftly address any inefficiencies. These initiatives are part of our commitment to resource efficiency, and we aim to reduce our water consumption by 5%. Despite these efforts, the scale of our water usage remains relatively low, and our activities are unlikely to have a significant impact on water or marine ecosystems.
In conclusion, while PostNL is committed to reducing water consumption as part of our broader sustainability goals, we do not consider water and marine resources a material topic due to the limited impact of our activities on these resources. Our focus remains on areas where we can drive the most significant environmental improvements, such as carbon emissions, energy efficiency, and circularity.
For each topical standard, we have listed our material impacts, risks, and opportunities resulting from our DMA and explained their interaction with our strategy and business model. These impacts, risks, and opportunities are covered by the ESRS disclosure requirements, whereby entity-specific metrics are disclosed for road traffic safety and our KPIs. For more information, see the Our strategy subsections in the Environmental, Social and Governance disclosures throughout the Sustainability statement.
1.5.4 DMA 2025
In compliance with the CSRD, companies are required to annually re-assess whether the material topics they identified are still relevant or any new material topics should be identified. This re-assessment can be conducted in several ways. While we aim to perform a DMA update prior to the start of the fiscal year, with the introduction and implementation of the CSRD in 2024, and the initial reassessment that needs to take place in 2025, we aim to execute an update in the second quarter of 2025. This update, which will use the DMA 2024 as the starting point, will focus on peer reviews, NGO discussions, as well as feedback and improvement points identified based on the DMA 2024, as well as a desktop analysis of relevant developments and actionable improvements. During 2025, we will work on setting up and implementing a standardised DMA process cycle for subsequent DMAs.
1.5.5 Our value chain and material topics
In 2024, we embraced the CSRD, plotting its principles along our value chain through rigorous double materiality assessments, governance frameworks, and integration into business processes to address ESG impacts on both value creation and society.
The infographic on the next page illustrates our role within the value chain, offering a clear view of each stage in the logistics process. It highlights how we connect with business customers, consumers, and end-users, detailing the range of services we provide and the breadth of stakeholders we engage with. Alongside this, we outline the CSRD topical standards most relevant to our operations and stakeholders. For each standard, we indicate where in the value chain it presents impacts, risks or opportunities, ensuring transparency and clarity in how we manage our responsibilities. More information on the logistic process visualised in the value chain be found on pages 10-12 in the Our operating context chapter, while more information on the policies, actions, targets and metrics linked to the material topics can be found in either the Environmental, Social or Governance disclosures.
