In mid-October, parts of England were declared in severe drought. According to ITV News, the Environment Agency will increase compliance checks on businesses that abstract water, to confirm they are only taking what their permits allow. (ITV News, 2025)
For a food manufacturer, that is an operational risk. For a haulage firm, it barely registers. That gap is the whole case for industry-weighted materiality.
One Topic, Two Very Different Risks
A manufacturer that relies on water for cleaning, cooling or processing faces direct exposure. Restrictions can slow production, raise costs or create compliance problems. A logistics business runs on fuel, vehicles and people, and water rarely touches its core operations.
Assess both companies on water in exactly the same way, and the results mislead. The logistics firm looks weak for lacking a water policy it doesn’t need, while the manufacturer’s real exposure is diluted into an average.
How Industry-Weighted Materiality Works
Materiality asks a simple question: which topics genuinely affect the resilience of this type of business? The answer changes by industry.
The SASB framework groups companies into 11 sectors and 77 industries, each with its own material topics. In practice, that means:
- Manufacturing: water management and energy use often carry real weight.
- Logistics: fuel, emissions and driver safety typically matter more.
- Across both: governance topics, such as policies and oversight, apply broadly.
Weighting doesn’t ignore water in logistics. It simply stops a low-relevance topic from distorting the overall picture.
Why This Matters for Risk and Procurement Teams
For underwriters, risk signals need to reflect what could actually disrupt the insured business, not a generic checklist. That matters for pricing, and for the forward-looking view of risk required under ORSA.
For procurement teams, this autumn’s drought shows why a manufacturing supplier’s water exposure deserves closer scrutiny than a haulier’s. Industry weighting helps in three ways:
- Underwriters see signals that match each counterparty’s real exposure.
- Procurement teams can focus supplier questions on the topics that matter.
- Portfolio comparisons become fair, because each company is judged against its own industry.
What This Means for Insurers and Corporates
A single scorecard applied to every business creates false precision. It rewards companies for disclosing what doesn’t matter and hides gaps in what does.
The better approach is to judge each company against the risks of its own industry, then compare it with peers of a similar size. That is how a drought headline becomes a clear view of which counterparties are genuinely exposed.
About Public Disclosure Analysis
TDH’s Public Disclosure Analysis assesses UK mid-market companies against a 120-question framework, weighted by industry materiality across 11 sectors and 77 industries in line with SASB. It draws on what companies already publish, including websites, policy documents and sustainability reports. Each company’s topic performance is compared with its industry and revenue group average to produce risk indicators, available via API or flat file.
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