The reality of materiality – insights into current ESG materiality practice

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28 June, 2021




Geneva, 28 June 2021: Today, the World Business Council for Sustainable Development (WBCSD) in collaboration with the Erasmus School of Economics release a report diving into current ESG materiality assessment practice including some of the main challenges and opportunities for companies.

Although stakeholders are asking for robust ESG information, practice in assessing and reporting on material ESG topics remains varied in the absence of consensus. This report aims to provide insights and clarity around the main ESG materiality decisions and challenges based on an analysis of over 550 company reports, 20 company interviews and existing guidance and literature.

Set around six challenges and seven major steps involved in conducting a materiality assessment, the key takeaways include building understanding around the different materiality perspectives, transparency in decision-making and using the assessment to its full potential.

Prof Karen Maas, Impact Centre Erasmus, comments “Materiality assessment is an important strategic tool for companies to get better insights in the most relevant topics to reduce their negative impacts and to enlarge their positive impacts. The insights provided by this report how to execute a good materiality analysis are an essential help for companies.”

“ESG impacts and dependencies can have a material impact on the value creation abilities of companies, but challenges remain in the management and reporting of pertinent ESG risks and opportunities. The disclosure of material, decision-useful ESG information by corporates, and the effective use of this information by the financial markets, will be key enabler of the transitions towards a world where over nine billion people are living well within planetary boundaries.” shared Rodney Irwin, Chief Operating Officer at WBCSD.

In addition to this report written in collaboration, the Erasmus School of Economics will publish an academic paper on the research and findings.