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This paper aims to investigate materiality judgement providing insights, critiques and future research paths in light of the open debate on the role of materiality in corporate financial disclosure, highlighting potential connections and implications with sustainability and intellectual capital (IC) reporting.

The research presents an overview of the analysis of financial materiality, including new stimuli from recent studies and regulatory requirements for financial and non-financial reporting. Accordingly, this study used a systematic literature review (SLR) based on a combination of content, text and bibliometric analysis of materiality in accounting research studies, collecting data from the Scopus database as one of the most relevant repositories.

The SLR identified four relevant research trends, concerning: (1) the relevance of materiality principles in corporate disclosure; (2) financial reporting practices and materiality; (3) theories and approaches in defining financial materiality and (4) the existence of quantitative and qualitative thresholds in the materiality judgement.

The results provide theoretical and practical implications when comprehending the development of the concept of financial materiality in financial statements and whether they can be appropriate in reporting IC as well. We identified future research paths.

From a practical perspective, this study is useful for companies implementing financial materiality based on stakeholder engagement and improving their transparency in financial and non-financial reporting practices.

The research investigates if the process for assessing materiality is in line with the expectations of all stakeholders involved in financial and non-financial reporting.

This research is the first to investigate the scientific basis and applicability of the concept of financial materiality to sustainability and IC reporting.

This paper aims to contribute to the development of the European Union (EU) regulatory environment for sustainability reporting by analyzing how materiality is defined in the Non-Financial Reporting Directive (NFRD) and Corporate Sustainability Reporting Directive (CSRD) and by examining the added value and challenges of legalizing reporting and materiality requirements from both regulatory and practical company perspectives. It provides insights on whether this is reflected by EU pharmaceutical companies and to what extent companies report information on their materiality analysis process.

Doctrinal analysis was used to examine regulatory instruments. Qualitative document analysis was used to analyze companies’ reports. The added value and challenges were examined using a governance approach. It focused on legalizing reporting and materiality requirements, with a brief extension to corporate management and organization studies.

Materiality has evolved from a vague concept in the NFRD toward double materiality in the CSRD. This was reflected by the industry, but reports revealed inconsistencies in materiality definitions and reported information. Challenges include lack of self-reflection and company-centric perceptions of materiality. Companies should explain how they identify relevant stakeholders and how input is considered in decision-making.

Managers must consider how they conduct materiality assessments to meet society’s expectations. The underlying processes should be explained to increase the credibility of reports. Sustainability reporting should be seen as a corporate governance tool.

This work contributes to the literature on materiality in sustainability reporting and to the debate on the need for a holistic, society-centric approach to enhance the sustainability of companies.

This paper aims to investigate the current state of knowledge in key reporting aspects in relation to sustainability reporting in general and to reflect on their relevance to Global Reporting Initiative (GRI) in particular. In doing so, the major gaps in that knowledge are identified, and the paper proceeds to suggest further research avenues.

The authors conduct a review of papers published in leading journals concerning sustainability reporting to analyse the progress in the literature regarding three important reporting topics: materiality, comparability and assurance.

The review conducted in this study shows that there is still work to be done to ensure high-quality and consistent sustainability reporting. Key takeaways from the review of the extant literature are as follows: there is ongoing debate about the nature of sustainability reporting materiality, and single versus double materiality. Clearer guidance and better contextualisation are seen as essential for comparability, and, as GRI suggests, there is an important link to materiality that needs to be considered. Finally, assurance has not been mandatory under the GRI, but the current development at EU level might lead to the GRI principles being incorporated in the primary assurance standards.

In this paper, the authors review and synthesise the previous literature on GRI reporting dealing with three key reporting aspects.

The authors extract some takeaways from the literature on materiality, comparability and assurance that will all be key challenges for GRI in the future.

This paper provides an updated review of the literature on GRI reporting dealing with three key reporting aspects.

The paper aims to show that materiality in the EU's non-financial reporting directive (NFRD) is an ambiguous concept, that its meaning is contested and that this contest for materiality is a contest for the meaning of Corporate Social Responsibility (CSR). Thus, the paper shall highlight a new aspect of materiality as a core principle in non-financial reporting.

The paper combines a historical analysis of the EU's CSR policies, an in-depth textual analysis of the EU's 2014 NFRD and associated documents, of non-financial reporting frameworks and exemplary adoptions of the NFRD in national laws.

The paper identifies two conflicting views of materiality in the NFRD. It shows that these “additive” and “cumulative” views correspond to the approaches taken by the Global Reporting Initiative (GRI) and International Integrated Reporting Council (IIRC) frameworks and by different national adoptions of the NFRD. The paper concludes that this contest for materiality is a contest for CSR – focusing either on business risks or impacts, shareholders or stakeholders, the business case or the social case for such a responsibility.

The paper is mainly based on an in-depth analysis of the European debate on materiality in non-financial reporting. Some of the paper's descriptive results are thus limited to this particular case. However, the main conceptual findings are backed up by an analysis of internationally established reporting frameworks and scholarly debates on the issue.

The paper reveals the practical implications of the contesting “additive” and “cumulative“ understandings of materiality present in the NFRD. The paper thus further underpins the preference for a “double materiality” perspective in the revision of the NFRD and the EC's 2021 CSRD proposal.

The paper makes an original contribution in its explication of different understandings of materiality in non-financial reporting and how these eventually represent different, competing perspectives on the nature of the NFRD and of CSR.

The concept of materiality is becoming increasingly important for sustainability performance measurement and reporting. It is widely agreed upon that materiality matters, in the sense that companies should identify, prioritize and disclose information on sustainability issues that are considered material. There is, however, a tension at the heart of this consensus, owing to parallel approaches to materiality being used in practice. This paper aims to shed light on how and why the parallel uses of the materiality concept may cause confusion and how this tension could be resolved.

This paper takes as point of departure the tension between two approaches to materiality: based on the Global Reporting Initiative definition, which emphasizes sustainability issues that are important to stakeholders and that have significant impacts and based on the Sustainability Accounting Standards Board definition, which emphasizes sustainability issues that are financially material, i.e. likely to influence the financial performance of the company. This paper discusses the nature and consequences of the tensions between how the two definitions of materiality in sustainability reporting are used in practice, with a particular emphasis on users of information in financial markets. This paper provides empirical insight on these users’ perspectives through a survey (n = 30) and qualitative interviews (n = 6) of financial market professionals.

This study reveals tensions between different approaches to materiality in practice and how this may lead users of sustainability reports to draw unjustified conclusions on the basis of materiality assessments. Specifically, this paper demonstrates the perceived shortcomings in information availability and information quality from the perspectives of different stakeholders in financial markets with different information needs.

The users of sustainability reporting information require clarity in the communication of materiality in non-financial reports. This paper addresses how such clarity can be pursued.

Clarity about materiality in non-financial reporting is important both for investors that pursue financial return on green investments and for society at large, which relies on information about real sustainability impacts.

This paper furthers the understanding of how different materiality concepts may be problematic and how recent and ongoing developments may mitigate the risks of conflating uses of the concept.

This paper outlines the development of the principle of materiality in the European accounting framework, from the Modernization Directive (2003/51/EC) to the NFI Directive (2014/95/EU) and on to the proposals for a Corporate Sustainability Reporting (CSR) Directive (2021/0104 (COD)). The authors highlight how the requirements for corporate reporting in terms of sustainability matters have changed, underlining the main issues that require further attention by practitioners, researchers and legislators.

This paper is based upon a historic analysis of European Union (EU) regulations in the field of non-financial and sustainability reporting and how these have changed over time. A conceptual comparison of different reporting concepts is presented, and changes in their relevance to the EU accounting framework are discussed as part of the historic analysis. Implications from corporate practice are derived from previous empirical findings from the EU Commission's consultations.

The proposed change from non-financial to sustainability reporting within the EU affects more than simply the terminology used. It implies that a different understanding is needed of both the purposes of company reporting on sustainability matters and the aims of carrying out such reporting. This change was driven by the need and desire to appropriately interpret the principle of materiality set forth in the NFI Directive. However, the recent redefinition in the shift within the EU Commission's proposals presents considerable challenges–and costs–in practice.

Future research on the conceptualization and operationalization of ecological and social materiality, as well as on the use of this information by different stakeholder groups, is necessary in order to (a) help companies that are applying the reporting requirements in practice, (b) support the increased harmonization of the reports published by these companies and (c) fully assess the costs and benefits associated with the increase in reporting requirements for these companies.

Companies have to establish relevant reporting processes, systems and formats to fulfil the increasing number of reporting requirements.

This paper outlines the historic development of the principle of materiality regarding mandatory non-financial or sustainability reporting within the EU. It outlines a shift in rationales and political priorities as well as in implications for European companies that need to fulfil the reporting requirements. In consequence, it describes appropriate interpretations of this principle of materiality under current and upcoming legislation, enabling users to apply this principle more effectively.

Materiality as an emerging trend aims to make sustainability reports (SR) more relevant for stakeholders. This paper aims to investigate whether the reporting practice of electric utility companies (EUC) is in compliance with the materiality principle of the Global Reporting Initiative (GRI) when disclosing SR.

A twofold content analysis focusing on material aspects (MAs) is conducted, followed by correlation analysis. Logic and conversation theory (LCT) serves to evaluate the communication quality of documented materiality in SR by EUC.

The coverage and quality of documented MAs in SR by EUC do not meet the requirements for relevant and transparent communication. Materiality does not guide the reporting practice and is not taken seriously.

Mediocre quality of coverage and communication in SR shows that stakeholders’ information needs are not considered adequately. The content analysis is limited in focusing on merely documented aspects rather than on actual performance.

This study considers the quality of communication of documented materiality through the lens of LCT. It contributes to the academic debate by introducing LCT as a viable theoretical perspective for analyzing SR. The paper evaluates GRI-G4 reporting practices in the electricity sector, which, while under-researched is crucial for sustainability. It also contributes to the emerging body of empirical research on the relevance of materiality as a guiding principle for sustainability reporting.

In this article, we reflect on how smart technology is transforming service research discourses about service innovation and value co-creation. We adopt the concept of technology smartness’ to refer to the ability of technology to sense, adapt and learn from interactions. Accordingly, we seek to address how smart technologies (i.e. cognitive and distributed technology) can be powerful resources, capable of innovating in relation to actors’ agency, the structure of the service ecosystem and value co-creation practices.

This conceptual article integrates evidence from the existing theories with illustrative examples to advance research on service innovation and value co-creation.

Through the performative utterances of new tech words, such as onlife and materiality, this article identifies the emergence of innovative forms of agency and structure. Onlife agency entails automated, relational and performative forms, which provide for new decision-making capabilities and expanded opportunities to co-create value. Phygital materiality pertains to new structural features, comprised of new resources and contexts that have distinctive intelligence, autonomy and performativity. The dialectic between onlife agency and phygital materiality (structure) lies in the agencement of smart tech–enabled value co-creation practices based on the notion of becoming that involves not only resources but also actors and contexts.

This paper proposes a novel conceptual framework that advances a tech-based ecology for service ecosystems, in which value co-creation is enacted by the smartness of technology, which emerges through systemic and performative intra-actions between actors (onlife agency), resources and contexts (phygital materiality and structure).

As the comparability concept has recently garnered increased attention of policymakers and standard setters in the sustainability reporting (SR) arena, this paper aims to provide a reflexive viewpoint of this concept in this context.

To inform the authors’ viewpoint and disentangle the concept of comparability into different facets, the authors review policymakers’ and standard setters’ (including the Global reporting initiative) comparability principles, as well as relevant studies in the field. To provide insights into the different ways in which the comparability facets can be approached, the authors use multi-perspective reflexive practices and focus on the multiple purposes that reporting can serve. To empirically animate the authors’ reflection on the facets, the authors analyse the sustainability disclosures of two Italian banks over three years.

This study reveals that three facets form valuable starting points for extending the understanding of the meanings the comparability concept can carry in the SR arena. These facets are materiality and comparability, benchmarking/monitoring and comparability and operationalisation and comparability.

This study is intended to elicit policymakers’ and standard setters’ thoughts on the role of comparability and its complexities in SR.

By taking a critical and reflexive approach, the authors encourage policymakers and standard setters to reconsider the comparability principle, so it effectively embeds the accountability purpose of SR.

In this paper, the authors propose three facets for disentangling the concept of comparability.