The Principle of Materiality in Integrated Reporting: A Content Analysis of Exemplary Integrated Reports

Abstract

The principle of materiality has long informed the content of traditional corporate reports prepared in accordance with widely recognised accounting standards. However, the increasing popularity of sustainability reporting and its related regulatory frameworks have committed standard-setters and researchers to a reconceptualisation of materiality. Sustainability reports indeed address a broader array of stakeholders, therefore enlarging the set of information needs to be met. Firstly, this study aims to provide an overview of the different approaches to materiality taken by well-established regulators and standard-setters. Secondly, the paper presents a review of the recent literature on materiality within the sustainability reporting context with a view to highlighting current challenges and areas in need of attention. Finally, a content analysis of exemplary reports prepared in conformity with the International <IR> Framework is conducted. The primary objective of this analysis is to investigate the extent and quality of materiality considerations within Integrated Reports. On a practical level, this study may assist standard-setters in identifying and/or delving deeper into current issues presented by sustainability reporting frameworks and lay the foundation for future provisions.