Understand the concept and analysis of materiality within the context of sustainability

What is materiality and how does it relate to Sustainability in the Business context? Explore topics related to materiality assessments and implementation guidelines relevant to Business Strategy and Corporate Reporting.

Understand Materiality for sustainability

Materiality is a sustainability concept that is important in the development of strategy and action plans and in the preparation and verification of reports and disclosures. The idea of materiality extends from long-standing principles of financial accounting, where it has always been an obligation for companies to report to their investors any information that could impact investment decisions. This obliges companies to identify and report any opportunities and risks in their business operations that could affect their financial standing or outlook.

Extending this idea to sustainability and recognizing that various environmental and social challenges fall within the scope of risks facing the business, and potentially should be evaluated for the opportunities that they present, the materiality assessment is the foundation of sustainability strategy and the initial step in preparing for any sustainability disclosures. This extension of the idea of materiality to sustainability where the risks and opportunities associated with sustainability are evaluated for its financial implication on the company is termed "financial disclosure" and is one of the two pillars of the "double materiality" concept.

The second pillar of the "double materiality" concept is "impact materiality". This pillar stems from the recognition that business activities may have an impact on the planet and on the communities and this impact may not be reflected in the financial indicators that businesses usually rely on. Thus, a sustainable business with co-relationships with nature and with its community of stakeholders should also be aware, understand, evaluate, and take action (if necessary) of such impacts. The reporting of "impact materiality" captures such topics and their effects.

The materiality assessment process is a multi-stakeholder process that seeks to gain alignment on the key topics that relate a business's activities across its value chains to the people and planet. The reporting of such impacts, risks, and opportunities provides relevant information for decision-making by impact and financial stakeholders.


materiality assessment
EFRAG's implementation guidance for the materiality assessment as of December 2023
In the November meeting of the EFRAG working group on Sustainability Reporting, the group provided an update on the guidance for materiality assessment. This document incorporates comments from previous rounds of revisions, and it is expected to be publicly released once all comments are incorporated and it receives approval.
January 13, 2024
materiality assessment
Materiality analysis: what topics do companies disclose in sustainability reports?
Companies in many industry sectors publish annual sustainability reports detailing sustainability-related initiatives and metrics across Environment, Social, and Governance (ESG) dimensions. These reports typically follow one of the voluntary standards, like the GRI or SASB standards. As part of sustainability reporting, a description of the process for materiality analysis and the resulting prioritization of material topics often is the foundation of the disclosure particularly for those companies reporting in reference to or in accordance with GRI standards.
September 14, 2023
materiality assessment
Implementation guidance on materiality assessment from EFRAG
EFRAG reviewed the initial draft of the Implementation guidance for the materiality assessment on August 23. This document outlines practical information and FAQ on the materiality assessment. After the initial review, this document will be released for a public commenting period of four weeks, following which the final document will be released after approval.
August 24, 2023
materiality assessment
Conducting a materiality assessment following GRI and ESRS guidances
The determination of materiality is central to meeting the regulatory requirements of the Corporate Sustainability Reporting Directive (CSRD). It is also a required process when reporting in accordance with Global Reporting Initiative (GRI) standards.
July 26, 2023
materiality assessment
What “material” topics are relevant for consumer goods companies?
Materiality is a debated topic in the ESG debate. This term is originally an accounting concept that says that all items reasonably likely to impact investors’ decision-making must be recorded or reported in a business’s financial statements.
December 13, 2022


The ESG App is a digital resource on the regulatory development and thematic topics in Sustainability. It is available for iOS/macOS (mobile and desktop) and Android (mobile) devices. We aim to help enhance awareness, relevance, and productivity of related work in climate/nature risk assessments, carbon/climate action, materiality, and related sustainability reporting.

New! CSRD Tool is a reporting tool for Corporate Sustainability Reporting Directive (CSRD). It is based on EU Commission Delegated Regulation (EU) 2023/2772 and includes over 1,200 disclosure data points of the CSRD organised by ESRS sections and disclosure requirements. References to the official regulation are included for verification.


We send periodic newsletters with updates on content and activities. You can sign up to stay connected with our platform. We look forward to hearing from you!