CONTENTS
Materiality refers to the threshold for determining which information is significant enough to be disclosed in a report. In climate reporting, a risk or impact is considered material if it could influence the decisions of investors or other stakeholders.
Example in context
You’re helping a client prepare their CSRD report. One of the first steps is a materiality assessment identifying which climate risks (like extreme heat or flooding) could significantly affect their financial position, business model, or reputation. Only those risks need to be disclosed under the financial materiality lens.
Why it matters
Materiality is the backbone of ESG reporting. It ensures companies focus only on what’s relevant, rather than disclosing everything. Under standards like CSRD and TCFD, materiality helps prioritise climate risks that could impact asset value, operations, or investor decisions saving time and increasing the clarity of disclosures.
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