We conducted a materiality assessment to identify and prioritize topics to create our sustainability strategy and reporting. The process, which applied the GRI Reporting Principles, was facilitated by a sustainability consulting firm and supported by an internal cross-functional group and our enterprise risk management process.

Our assessment will be completed in two phases. The high-level approach for the first phase is described below. In the second phase, we plan to conduct a survey with key stakeholders to validate and further refine our results.

For the first phase we identified relevant sustainability topics and impacts from a range of sources, including the United Nations Sustainable Development Goals (UN SDGs), the GRI Standards, the SASB Standards and leading environmental, social and governance (ESG) frameworks, and an internal business review. We developed a list of 25 relevant topics, some with multiple subtopics, across economic, environmental responsibility, social responsibility and governance categories.

During the first phase we evaluated materiality along three dimensions:

  1. The significance of current and potential social, environmental, and economic impacts. This analysis considered both quantitative and qualitative factors based on the tests for materiality within the GRI Standards. Resources included the UN SDGs, GRI Standards, SASB Standards, the GRESB assessment, and leading ESG ratings questionnaires, applicable laws and regulations, sector initiatives and research, and investor guidance, along with company strategy, policies, core competencies and identified risks and opportunities along the value chain.
  2. The importance to stakeholders in determining their assessments and decisions about Realty Income. This evaluation of stakeholder perspectives incorporated feedback from interviews of cross-functional team members and senior leaders, input from our ongoing stakeholder interactions, investor-focused ESG topics of interest, and sustainability reports of peers and clients.
  3. The strategy in creating long-term value. We assessed strategic significance based on Realty Income’s mission, vision, strategic objectives and areas of organizational focus along with a mapping exercise to identify key sources of long-term value creation. This systems thinking approach enabled us to take a more holistic view of the network of topics and their important interconnections.

The values assigned for each topic through the assessment were plotted on a materiality matrix, with the key sources of long-term value creation highlighted, to visualize the results and facilitate further discussion and refinement. The Sustainability Director coordinated internal review and adjustments and confirmed the thresholds for materiality, which identified 23 material topics, including 13 top priorities. The prioritization of the material topics brings focus on areas with impacts to be closely managed to improve performance, mitigate potential risks, and pursue opportunities, which will support long-term value creation for Realty Income, our stakeholders and society.