Corporate Sustainability Reporting and 'Material Information:' An Empirical Study of Materiality under the GRI and Frameworks

Corporate reporting is premised on the concept of the disclosure of material information, developed for financial reporting. The increase in sustainability reporting has seen the materiality concept migrate into non-financial reporting and resurfaced two issues with the concept. Sustainability reporting expands the traditional audience for information beyond shareholders, often resulting in lengthy reports that produce little return to the reporting companies. In addition, the two dominant sustainability reporting frameworks - the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC) - continue the tradition of broad definitions of materiality. The promise of the materiality concept as a mechanism to improve disclosure to stakeholders remains unfulfilled. What is less clear is whether the disappointing track record is due to defects inherent in the concept itself or to shortcomings in its application.