Materiality is a process used to identify and prioritise the sustainability issues that matter most to a company and its stakeholders. Thanks to a big push by the common guidelines and standard setters, such as the Global Reporting Initiative (GRI) and the Integrated Reporting Council (IIRC), it's no longer an elusive strategic tool used only by the sustainability leaders. It has become far more mainstream – 94% of companies in our Reporting Matters assessment of World Business Council for Sustainable Development (WBCSD) members in 2016 disclosed some form of materiality assessment.
How useful is materiality and are companies using it to its full potential?
At times, companies' use of materiality feels like a tick box exercise to satisfy the requirements of the myriad of sustainability standards and guidelines that companies face these days, rather than a meaningful exercise.
In fact, none of the companies included in the Reporting Matters assessment scored above 75% for materiality and 82% of the companies assessed scored less than 50%.