Materiality: A Sustainability Perspective

Materiality refers to the identification and prioritisation of matters that are significant enough to demand attention and action. The concept of materiality is interpreted differently across domains depending on the context in which it is applied. The idea of materiality has evolved in tandem with the transformation in the business environment. From a sustainability perspective, materiality serves as the guiding framework in an organisation for sustainability performance and sustainability reporting. The determination of materiality in sustainability frameworks is anchored in the structured due diligence process which aids organisations in identifying, assessing, prioritising and addressing their impacts on the environment, people and economy. A double materiality assessment builds upon the due diligence process to include aspects of financial risks and opportunities arising from sustainability matters in the analysis. The materiality assessment process is an important step toward an organisation's ultimate goal of becoming a sustainable business enterprise.

INTRODUCTION TO MATERIALITY

The term materiality is familiar to every Chartered Accountant. The concept is introduced early in our accounting education as a fundamental principle that governs the recognition, presentation, and disclosure of financial information in the financial statements. The princ