Patrizia Riva,Lorenzo Gelmini, Francesco Bavagnoli, Maurizio Comoli
Studies in Managerial and Financial Accounting “Sustainability disclosure: state of the art and new directions” ISBN: 978-1-78560-341-9
Emerald Group - 2015-01

The concept of materiality lies at the very heart of reporting environmental,social, and governance performance, as it has generally been acknowledged also in the financial accounting field, from both the practitioners and the
academia.
Its supremacy and pivotal role is strictly related, in that sense, to the
metaphorical discourses materiality is embedded into (Edgley, 2013).
In effect, with limited resources, managers have to choose a small set of
material performance indicators and, hence, they face a strategic dilemma
(especially when looking from a non-financial perspective), if to try to
satisfy every one of the company’s stakeholders or to cope with the most
strategic amongst them (Deloitte, 2012).Despite of its importance, a shared vision of materiality for non-financial
information is still a long way ahead, either if we review the literature, which
has constantly grown in recent years but it is yet in its early stages, or if we take the practitioners’ perspective, which calls for a process of improving materiality and the relevance of information disclosed (Black Sun and The International Integrated Reporting Council, 2014).
At the same time, the relationship between materiality and other core
principles of Integrated Reporting (in particular consistency, comparability,
and conciseness) needs to be still nurtured, from different intellectual
angles, if the momentum of Integrated Reporting itself aspires to a longlasting and fertile success.
Bearing these considerations in mind, this chapter first addresses the
issue of materiality for financial and for sustainability reporting
(Section 5.2) and then (Section 5.3) from the perspective of Integrated
Reporting (“IR”); second, it presents the main theoretical and operational
challenges of the current approach toward non-financial materiality
(Section 5.4) making also use of some empirical findings (Section 5.5); the
last paragraph draws some preliminary conclusions (Section 5.6).
In more detail, Section 5.2 portraits the principal roots of accounting materiality, making also use of the fruitful approach of “genealogy of
materiality” recently adopted in literature (Edgley, 2013), whilst Section 5.3
unites together practitioners’ views, international guidelines, and theoretical positions toward the issue of materiality for non-financial reporting.
Section 5.4 presents a number of hot topics in the present state-of-art of
materiality for non-financial reporting (the choice of a single/multiple
framework; the process of materiality; the role of stakeholders and their
dialogue with the company; the materiality scale and the materialitymatrix) and Section 5.5 presents some preliminary findings from an
analysis of recent Integrated Reports, which shed light into the diverse (at
least, currently) attitudes of companies when disclosing their approach
toward materiality.