Materiality in sustainability reporting
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Journal Title
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Volume Title
School of Business |
Master's thesis
Authors
Date
2024
Department
Major/Subject
Mcode
Degree programme
Accounting
Language
en
Pages
60 + 2
Series
Abstract
Sustainability reporting has become an essential practice for corporations aiming to demonstrate commitment to environmental, social, and governance (ESG) issues. The concept of materiality has a central role in sustainability reporting – it aids in the identification and prioritization of the most relevant ESG issues, shaping the content of sustainability reports. However, defining materiality has proven to being challenging. That is due to the broad scope of sustainability reporting, the diverse nature of sustainability information, organization-specific factors, the various stakeholders who utilize the information, and the fragmented state of the current sustainability reporting regulatory environment. The objective of this thesis is to clarify understanding of the ambiguous concept of materiality in sustainability reporting by performing a concept analysis. To collect data, six unstructured theme interviews were held with sustainability reporting professionals. A grounded theory approach was used to analyse the data and to, finally, define materiality in sustain- ability reporting. Based on the findings of the study, materiality is seen to consist of four themes: significant, multidimensional, two interrelated perspectives, and affected by regulation. While echoing the existing understanding of materiality, the findings also emphasize the contradiction between the need to define materiality top-down, and the inherent challenges making it difficult. Although the relatively small sample size and the subjective nature of the used methodology limit the generalizability of the findings, the study offers valuable insights, deepening the under- standing of the concept of materiality in sustainability reporting. The study also reveals the need to further explore materiality in sustainability reporting, recognizing the evolving state of sustainability reporting regulation in the European Union.Description
Thesis advisor
Niemi, LasseKeywords
materiality, sustainability reporting, materiality in sustainability reporting, sustainability