Research presents the benefits of robust sustainability reporting, alongside financial disclosures. Tweet This!
A white paper commissioned by GRI investigates the application of materiality in sustainability reporting, showing how disclosing impacts that go beyond those that are financially material benefits organisations and supports sustainable development.
The paper – The double-materiality concept: application and issues –, produced by a team led by Professor Carol Adams of Durham University Business School (UK), assesses the challenges, opportunities and relevance of applying double-materiality in sustainability reporting.
The paper’s key findings include:
- The identification of financial materiality issues is incomplete unless companies first assess their impacts on sustainable development
- Reporting material sustainable development issues can improve financial performance and stakeholder engagement, enabling more robust disclosure
- Focusing on an organisation’s impacts on people and the planet, rather than on financial materiality, increases engagement with the Sustainable Development Goals
Double-materiality is also central to the European Commission’s proposed Corporate Sustainability Reporting Directive (CSRD), and it closely aligns with the materiality approach in the GRI Standards. This paper is intended to inform the debate on how this concept drives sustainability and supports better decision-making – by both investors and various other stakeholders.
Professor Carol Adams said:
“Accountability for the impacts of an organization on society and the environment is critical in achieving sustainable development. That is why rigour in the approach to identifying material impacts, and their governance oversight, is required for sustainability reporting that meets the needs of all audiences.
This research concludes that robust reporting of sustainability impacts is necessary for companies to determine risks and opportunities. Despite this reality, many organizations tend to prioritize financial materiality, which is not only detrimental for sustainable development but, ultimately, also to their bottom line.”
Peter Paul van de Wijs, GRI Chief External Affairs Officer, said:
“GRI is committed to informing and leading the debate on how transparency on organizational impacts, as enabled by reporting, can contribute to sustainable development. We are therefore grateful to Professor Adams and her team for this insightful contribution.
As the European Commission seeks a sustainability disclosure solution that has double-materiality as the cornerstone, in which GRI is actively engaged, the time is right to assess the benefits of the concept. This paper provides the academic grounding for why we need a corporate reporting system with sustainability reporting on an equal footing with strengthened financial reporting.”
80% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE
By registering for the next FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.
Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:
- Identify your most important impacts on the Environment, Economy and Society
- Begin taking solid, focused, all-round sustainability action ASAP
This article is based on published information by GRI. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link: