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Article
Publication date: 2 May 2019

Jenni Puroila and Hannele Mäkelä

The purpose of this paper is to contribute to the socio-political role of materiality assessment in sustainability reporting literature and discuss the potential of

Abstract

Purpose

The purpose of this paper is to contribute to the socio-political role of materiality assessment in sustainability reporting literature and discuss the potential of materiality assessment to advance more inclusive accounting and reporting practices, in particular critical dialogic accounting.

Design/methodology/approach

Drawing on literature on the concept of materiality together with insights from stakeholder engagement, commensuration and critical dialogic accounting the paper analyses disclosure on materiality in sustainability reports. Empirically, qualitative content analysis is used to analyse 44 sustainability reports from the leading companies.

Findings

The authors argue that, first, the technic-rational approach to materiality portrays the assessment as a neutral and value-free measurement, and second, the materiality matrix presents the multiple stakeholders as having a unified understanding of what is considered important in corporate sustainability. Thus, the technic-rational approach to the materiality assessment, reinforced with the use of the matrix is a value-laden judgement of what matters in corporate sustainability and narrows down rather than opens up the complexity of the assessment of material sustainability issues, stakeholder engagement and the societal pursuit of sustainable development.

Originality/value

The understandings and implications of the concept of materiality are ambiguous and wide-reaching, as, through constituting the legitimised set of claims and information on corporate sustainable performance, it impacts our understanding of sustainable development at large, and affects the corporate and policy-level transition towards sustainability. Exploring insights from critical dialogic accounting help us to elaborate on the conceptions and practical implications of materiality assessment that enhance stakeholder engagement in a democratic, rather than managerial, spirit.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 4
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 26 April 2018

Vincenzo Formisano, Maria Fedele and Mario Calabrese

Nowadays, in this highly dynamic and complex context, companies have to act in a socially responsible and sustainable way to survive, creating shared value. The purpose of

Abstract

Purpose

Nowadays, in this highly dynamic and complex context, companies have to act in a socially responsible and sustainable way to survive, creating shared value. The purpose of this paper is to analyse, through descriptive statistics, the elements that Italian banks identify as strategic to increasing their relational and reputational capital and to being in consonance with stakeholder’s expectations.

Design/methodology/approach

This paper investigates the width (number of intermediaries that included the materiality matrix in their non-financial reports) and the depth (number of indicators in the matrix) of the phenomenon to detect the bank’s attention on critical topics for their stakeholders.

Findings

The focus is on materiality matrices in order to detect a correspondence among the significant indicators selected by the banks and those value generators for stakeholders. In the perspective used in this work, property is also a stakeholder; indeed, wanting to use the terminology of the viable systems approach, property represents a relevant supra-system as it is critical and influential for the decision makers.

Research limitations/implications

The main limits are the low number of non-financial reports published by Italian banks, and the little information on the type of stakeholder involved in the building of the materiality matrix.

Originality/value

The originality of this work is multifaceted. Primarily, there are no similar studies in the banking sector. The present work intends to go beyond the studies already in the literature on mapping and stakeholder prioritisation as well as on the identification and selection of material themes. Moreover, having found, during the analysis of the banks’ reports, the heterogeneity of indicators identified as material, for both banks and stakeholders, the same have been traced back to the related stages identified by Carroll in the pyramid of social responsibility.

Details

The TQM Journal, vol. 30 no. 5
Type: Research Article
ISSN: 1754-2731

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Article
Publication date: 10 July 2021

Yully Marcela Sepúlveda-Alzate, María Antonia García-Benau and Mauricio Gómez-Villegas

This paper aims to propose a measurement of the materiality of environmental, social and governance information (ESG) reported by listed companies belonging to sensitive…

Abstract

Purpose

This paper aims to propose a measurement of the materiality of environmental, social and governance information (ESG) reported by listed companies belonging to sensitive industries in Colombia, Mexico, Brazil, Chile and Argentina. This analysis is carried out from the insights of stakeholder theory, legitimacy theory and institutional theory. The research questions addressed are: What type of information is considered as material by Latin American companies? Does this information respond to the environmental and social issues within the context of Latin American companies and the needs of their stakeholders?

Design/methodology/approach

A materiality index is developed from principal component analysis and factor analysis, which are multivariate analysis statistical techniques used in various fields to develop indices. The designed index examines materiality in the sustainability reports of 65 companies for 2017 and 67 companies for 2018. These firms belong to the energy, mining, chemical, construction, construction materials and public services industries in Colombia, Mexico, Chile, Argentina and Brazil.

Findings

The results show medium-high materiality indices, mostly in Chilean, Mexican and Colombian companies. In addition, issues such as water management, climate change and occupational health and safety are particularly interesting for companies. For the two years studied and from the perspective of material aspects for the company and its stakeholders, energy, mining and utilities (drinking water and sewage) sectors obtained the highest scores. This shows that the disclosure of ESG information is higher in industries related to the exploitation of natural resources that cause adverse effects on the environment such as extractive industries. Both the analysis presented in this paper and the materiality measurement developed, allow social responsibility managers to have a standard on the level of importance allotted to the different topics disclosed in sustainability reports. Additionally, this study provides a perspective of the material issues recognized by sensitive industries with great environmental impact. Similarly, an analysis of the issues considered material by stakeholders is provided. This allows such issues to be compared, identifying similarities and differences among the issues regarded as material by a company and its stakeholders.

Practical implications

The paper opens the debate is open as to whether the information disclosed response to the needs of stakeholders or whether, on the contrary, the materiality analysis is a process that emerges simply from the interests of the company. These demands for qualitative and field research to complement quantitative studies such as this one to research the stakeholders’ engagement processes in context.

Social implications

The paper’s purpose a challenge for future research is to strengthen the use of various methodologies that allow knowing the participation processes in the definition of materiality in the ESG information and the companies’ engagement with stakeholders. This stimulates research in the region, which is still in its infancy.

Originality/value

The international literature contains few studies related to the assessment of materiality for sustainability reporting. So this paper contributes proposes measurement of materiality for ESG information.

Details

Sustainability Accounting, Management and Policy Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8021

Keywords

Content available
Article
Publication date: 7 November 2019

Johannes Slacik and Dorothea Greiling

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

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Details

International Journal of Energy Sector Management, vol. 14 no. 3
Type: Research Article
ISSN: 1750-6220

Keywords

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Article
Publication date: 19 October 2015

Peter Jones, Daphne Comfort and David Hillier

The purpose of this paper is to provide a preliminary examination of the extent to which the UK’s leading house builders are embracing the concept of materiality and…

Abstract

Purpose

The purpose of this paper is to provide a preliminary examination of the extent to which the UK’s leading house builders are embracing the concept of materiality and commissioning independent external assurance as part of their sustainability reporting processes and to offer some wider reflections on materiality and external assurance in sustainability reporting.

Design/methodology/approach

The paper begins with a review of the characteristics of materiality and external assurance and a brief outline of house building in the UK and of the sustainability challenges the industry faces. The information on which the paper is based is drawn for the top twenty UK house builders’ corporate Websites.

Findings

The paper reveals that only a minority of the UK’s top 20 house builders had embraced materiality or commissioned some form of independent external assurance or verification as an integral part of their sustainability reporting processes. In many ways this reduces the reliability and credibility of the house builders’ sustainability reports. Looking to the future growing stakeholder pressure may force the UK’s house builders to embrace materiality and commission external assurance as systematic and integral elements in the sustainability reporting process.

Originality/value

The paper provides an accessible review of the current status of materiality and external assurance in the UK house builders’ sustainability reporting process, and as such it will interest professionals, practitioners, academics and students interested in sustainability in the construction industry.

Details

Property Management, vol. 33 no. 5
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 1 August 2016

Peter Jones, David Hillier and Daphne Comfort

The purposes of this paper are to provide a preliminary examination of the extent to which Europe’s leading commercial property companies are embracing the concept of

Abstract

Purpose

The purposes of this paper are to provide a preliminary examination of the extent to which Europe’s leading commercial property companies are embracing the concept of materiality and commissioning independent external assurance as part of their sustainability reporting processes and to offer some wider reflections on materiality and external assurance in sustainability reporting.

Design/methodology/approach

The paper begins with an introduction to corporate sustainability, an outline of the European property market and of the drivers for, and challenges to, sustainability for property companies and a review of the characteristics of materiality and external assurance. The information on which the paper is based is drawn from the leading European commercial property companies’ corporate websites.

Findings

The paper reveals that all of Europe’s leading property companies had either reported or provided information on sustainability but that only approximately half of these companies had embraced materiality or commissioned some form of independent external assurance as an integral part of their sustainability reporting processes. In many ways, this reduces the reliability and credibility of the leading property companies’ sustainability reports. Looking to the future, growing stakeholder pressure may force more of the leading European property companies to embrace materiality and commission external assurance as systematic and integral elements in the sustainability reporting process.

Originality/value

The paper provides an accessible review of the current status of materiality and external assurance among Europe’s leading commercial property companies’ sustainability reporting and as such it will interest professionals, practitioners, academics and students interested in the sustainability in the property industry.

Details

Journal of European Real Estate Research, vol. 9 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

Abstract

Details

Sustainability Disclosure: State of the Art and New Directions
Type: Book
ISBN: 978-1-78560-341-9

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Article
Publication date: 5 March 2021

Muhammad Bilal Farooq, Rashid Zaman, Dania Sarraj and Fahad Khalid

This paper aims to evaluate the extent of materiality assessment disclosures in sustainability reports and their determinants. The study examines the disclosure practices…

Abstract

Purpose

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).

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 5
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 9 November 2015

Peter Jones, Daphne Comfort and David Hillier

The purpose of this paper is to provide a brief for property occupiers who look to monitor trends in sustainability reporting. The paper offers a preliminary examination of

Abstract

Purpose

The purpose of this paper is to provide a brief for property occupiers who look to monitor trends in sustainability reporting. The paper offers a preliminary examination of the extent to which the UK’s leading commercial property companies are embracing the concept of materiality and commissioning independent external assurance as a part of their sustainability reporting processes and some wider reflections on materiality and external assurance in sustainability reporting.

Design/methodology/approach

The paper begins with a review of the characteristics of materiality and external assurance and an outline of the drivers for, and challenges to, sustainability for property companies. The information on which the paper is based is drawn from the leading UK property companies’ corporate websites.

Findings

The paper reveals that approximately half of the UK’s leading property companies had embraced materiality or commissioned some form of independent external assurance as an integral part of their sustainability reporting processes. In many ways, this reduces the reliability and credibility of the leading property companies’ sustainability reports. Looking to the future, growing stakeholder pressure may persuade more of the UK’s leading property companies to embrace materiality and commission external assurance as systematic and integral elements in the sustainability reporting process.

Originality/value

The paper provides an accessible review of the current status of materiality and external assurance among the UK’s leading commercial property companies’ sustainability reporting. As such, it will not only interest occupiers but also professionals, practitioners, academics and students interested in sustainability in the property industry.

Details

Journal of Corporate Real Estate, vol. 17 no. 4
Type: Research Article
ISSN: 1463-001X

Keywords

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Article
Publication date: 2 September 2019

Melanie Lubinger, Judith Frei and Dorothea Greiling

Materiality, as a content-selection principle, is an emerging trend in sustainability reporting for making sustainability reports (SRs) more relevant for stakeholders. The…

Abstract

Purpose

Materiality, as a content-selection principle, is an emerging trend in sustainability reporting for making sustainability reports (SRs) more relevant for stakeholders. The purpose of this paper is to investigate whether materiality matters in the reporting practice of universities which have adopted the Global Reporting Initiative G4 Guidelines.

Design/methodology/approach

Strategic stakeholder theory and sociological institutionalism serve for deriving conflicting expectations about the compliance of universities with the materiality principle. In the empirical section of this paper, content analyses are conducted on the documented material aspects, followed by a correlation analysis for examining to which extent the identified material aspects are reported in the SRs.

Findings

Although universities document G4-19 stakeholder-material aspects according to different relevance levels and for internal and external stakeholder groups, the identified material aspects are not appropriately reported in the SRs. The adoption of the materiality principle is a superficial one and therefore more in line with the expectations of sociological institutionalism.

Research limitations/implications

The main limitation for this study is the small number of university SRs available. The chance to make SRs more relevant by focusing on stakeholder-material aspects is not used.

Originality/value

This paper reports the first study looking at the compliance between the documented material aspects and the content of SRs in a particular challenging organisational field, the university sector. This paper also adds to the emerging theoretical discussion about the extent universities implement materiality in SRs.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 31 no. 3
Type: Research Article
ISSN: 1096-3367

Keywords

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