Eleven Stakeholders, Seven Topics, Four That Matter: A Stakeholder Map and Double Materiality Assessment for a Chocolate Maker
Student Name
American College of Education
CSR5003: Principles and Practices of Corporate Social Responsibility
Module 2 Assignment
Instructor Name
July 10, 2028
Why Map Before Choosing
Module 1 concluded that Marrow Creek Confections, a composite chocolate maker with about $420 million in sales, owes the families in its cocoa supply chain due diligence, support for remediation and honest reporting. Child labor, however, is only one of many claims on the company. Before deciding where to put its limited attention, the company needs to know who has claims on it, which claims are strongest and which issues matter most, both to the people affected and to the company's own performance. A company that responds to whichever stakeholder is loudest will spend its effort on the wrong things. Materiality is the discipline of deciding what not to work on.
Mapping the Stakeholders
The team identified eleven groups: the controlling family shareholders; the company's 610 employees; its largest retail customer and other retailers; consumers; the two cocoa trading houses; farmer cooperatives in Côte d'Ivoire and Ghana; cocoa-farming families, including children; the cocoa regulators and governments of the two producing countries; nongovernmental organizations working on child labor and deforestation; the company's lenders; and the Pennsylvania community around its factory. Mitchell et al. (1997) proposed that a stakeholder's salience to managers depends on three attributes: power to influence the firm, legitimacy of the relationship and urgency of the claim. Groups with all three are definitive stakeholders whose claims managers must address.
Applied to Marrow Creek, the largest retailer is definitive: it has power through its purchasing, a legitimate relationship and an urgent claim with a deadline. The family shareholders and lenders have power and legitimacy. Cocoa-farming families have high legitimacy and urgency but almost no power over the company, which the model classifies as dependent stakeholders who rely on others, such as nongovernmental organizations, the retailer or governments, to advocate for them. The model's value here is that it explains why the families' claim has gone unanswered for years and why the retailer's requirement has suddenly made it salient: power has been added to a claim that was already legitimate and urgent.
Double Materiality
The company assessed topics on two dimensions. Impact materiality asks how significant the company's actual and potential effects on people and the environment are, which is the approach of the Global Reporting Initiative's standard on material topics (Global Reporting Initiative [GRI], 2021). Financial materiality asks how much a topic could affect the company's revenue, costs, access to capital or value. Evidence suggests the distinction matters for performance. Khan et al. (2016) found that firms with good ratings on sustainability issues that are material to their industry outperformed firms with poor ratings on those issues, while good performance on immaterial issues did not produce the same advantage. Attention spent on the right issues pays; attention spread evenly does not.
A group of managers rated seven candidate topics on both dimensions, using a five-point scale, informed by interviews with the retailer, one trading house, two nongovernmental organizations and an employee committee. A topic scoring 4 or higher on either dimension is treated as material.
The Seven Topics
Child labor and human rights in cocoa scored 5 for impact and 4 for financial materiality, the latter because of the retailer's requirement and tightening due diligence laws in export markets. Deforestation linked to cocoa scored 5 for impact, because cocoa expansion has been a driver of forest loss in West Africa, and 4 financially, because about 12 percent of Marrow Creek's sales are to the European Union, whose deforestation regulation requires companies placing cocoa products on its market to show that they were not produced on land deforested after 2020 (European Parliament and Council of the European Union, 2023). Farmer income scored 5 for impact, since low income underlies both child labor and forest clearing, and 3 financially. Sugar content and consumer health scored 3 and 3. Packaging waste scored 2 for impact and 3 financially, given retailer packaging targets. Emissions from the Pennsylvania factory scored 2 and 2, and workplace safety in the factory scored 3 and 4, because an injury could halt production and the company's safety record is already monitored by its insurers.
Four topics are therefore material: child labor and human rights, deforestation, farmer income and workplace safety. The first three are interconnected, all rooted in the economics of smallholder cocoa, and they will be addressed together in the next module's supply chain analysis. Workplace safety is material for a different reason and is managed through the company's existing safety program.
The Judgment Involved
The scores are judgments, and the paper does not pretend otherwise. Farmer income could reasonably have scored 4 financially, since a price crisis that drives farmers out of cocoa could threaten supply. Sugar and health could rise if a major market adopts taxes or labeling rules. The assessment will be repeated every two years and whenever a major stakeholder raises a new claim. Its purpose is not to produce a permanent list but to force the company to decide, with reasons it can explain, where to concentrate. The decision leaves some legitimate claims, such as packaging waste, below the threshold. That does not mean they are ignored; it means they are managed through ordinary operations rather than given strategic priority, and the company should be able to say so publicly.
Engaging Each Group
The map also determines how the company engages each group, since the same approach does not fit all of them. The retailer, a definitive stakeholder, will receive a formal plan with dates and quarterly progress reports, and a named executive will own the relationship. The family shareholders and lenders will see the material topics and their costs in the board's annual strategy review, because the program will draw on the company's capital. The two trading houses, whose cooperation is necessary for any traceability, will be engaged through the purchasing contracts themselves, with requirements for origin data and support for monitoring written into the next contract renewal.
Cocoa-farming families, as dependent stakeholders, cannot be engaged directly by a company that buys through traders, and it would be misleading to claim otherwise. Their interests will be represented through the cooperatives that the traders' programs work with, through nongovernmental organizations with field presence and through farmer interviews commissioned as part of independent verification. The company will ask the traders to share the results of any farmer surveys conducted in the cooperatives that supply it. Employees will be engaged through the existing employee committee, which raised workplace safety during the interviews and will review the safety program's annual results. The Pennsylvania community, whose main concerns are jobs and factory traffic, will continue to be engaged through the plant manager's regular community meetings. Each channel has an owner, so that the next materiality assessment can draw on what the company actually heard rather than on managers' assumptions.
The results will be published in the company's first sustainability report, with the scores and the reasoning for each, so that stakeholders who disagree can say so.
References
European Parliament and Council of the European Union. (2023). Regulation (EU) 2023/1115 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation. Official Journal of the European Union, L 150, 206-247.
Global Reporting Initiative. (2021). GRI 3: Material topics 2021. GRI.
Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697-1724. https://doi.org/10.2308/accr-51383
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853-886. https://doi.org/10.2307/259247
How this CSR 5003 Module 2 example is structured
CSR 5003 Module 2 typically maps stakeholders and decides which claims on the company are material; your classroom's instructions decide the frameworks and whether a matrix is required. This example uses a published salience model for the stakeholder map and a double materiality approach for the topics, explaining both before applying them. Each topic's scores are justified in a sentence or two, and the paper is explicit about the judgment involved, since materiality is a decision, not a calculation.
CSR5003 Module 2 questions, answered
What does CSR5003 Module 2 usually ask for?
CSR5003 Module 2 typically asks students to identify and prioritize a company's stakeholders and decide which social and environmental issues are material. Many sections expect a stakeholder map and a materiality matrix with justification. Your classroom's instructions decide the frameworks.
What is double materiality?
Double materiality assesses topics on two dimensions: the company's impact on people and the environment, and the topic's financial effect on the company. A topic can be material on either dimension, which widens the view beyond purely financial risk.
How do I justify materiality scores?
Give each score a reason tied to evidence, such as a regulation, a customer requirement or the scale of impact, and say where the judgment could reasonably differ. Materiality is a decision, and showing the reasoning is more important than precise numbers.
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