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Examining the extent of and drivers for materiality assessment disclosures in sustainability reports

Muhammad Bilal Farooq (Department of Accounting, Auckland University of Technology, Auckland, New Zealand)
Rashid Zaman (School of Business and Law, Edith Cowan University, Joondalup, Australia)
Dania Sarraj (Department of Accounting, Auckland University of Technology, Auckland, New Zealand)
Fahad Khalid (School of Business, Guilin University of Electronic Technology, Guilin, China)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 5 March 2021

Issue publication date: 26 August 2021




This paper aims to evaluate the extent of materiality assessment disclosures in sustainability reports and their determinants. The study examines the disclosure practices of listed companies based in the member states of the Cooperation Council for the Arab States of the Gulf, colloquially referred to as the Gulf Cooperation Council (GCC).


First, the materiality assessment disclosures were scored through a content analysis of sustainability reports published by listed GCC companies during a five-year period from 2013 to 2017. Second, a fixed effect ordered logic regression was used to examine the determinants of materiality assessment disclosures.


While sustainability reporting rates improved across the sample period, a significant majority of listed GCC companies do not engage in sustainability reporting. The use of internationally recognised standards has also declined. While reporters provide more information on their materiality assessment, the number of sustainability reports that offer information on how the reporter identifies material issues has declined. These trends potentially indicate the existence of managerial capture. Materiality assessment disclosure scores are positively influenced by higher financial performance (Return on Assets), lower leverage and better corporate governance. However, company size and market-to-book ratio do not influence materiality assessment disclosures.

Practical implications

The findings may prove useful to managers responsible for preparing sustainability reports who can benefit from the examples of materiality assessment disclosures. An evaluation of the materiality assessment should be included in the scope of assurance engagements and practitioners can use the examples of best practice when evaluating sustainability reports. Stock exchanges may consider developing improved corporate governance guidelines as these will lead to materiality assessment disclosures.

Social implications

The findings may assist in improving sustainability reporting quality, through better materiality assessment disclosures. This will allow corporate stakeholders to evaluate the reporting entities underlying processes, which leads to transparency and corporate accountability. Improved corporate sustainability reporting supports the GCC commitment to implement the United Nations Sustainable Development Goals and transition to sustainable development.


This study addresses the call for greater research examining materiality within a sustainability reporting context. This is the first paper to examine sustainability reporting quality in the GCC region, focussing particularly on materiality assessment disclosures.



Author(s) are thankful to Professor Charl de Villiers (University of Auckland-New Zealand) for his helpful comments on the earlier version of this paper and Dr Stephen Bahadar (Lincoln University-New Zealand) for his assistance in data visualisation.


Farooq, M.B., Zaman, R., Sarraj, D. and Khalid, F. (2021), "Examining the extent of and drivers for materiality assessment disclosures in sustainability reports", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 5, pp. 965-1002.



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