Materiality

In the context of sustainability reporting, materiality refers to the significance of an ESG issue to a company's financial performance and its stakeholders. Material ESG issues are those that could substantively influence the decisions of investors and other stakeholders. The concept of double materiality expands this to consider both financial materiality (the impact of ESG issues on the company) and environmental and social materiality (the company's impact on the environment and society). Double materiality provides a comprehensive view of sustainability performance and is central to frameworks like CSRD, GRI, and SASB.