The New Sustainability Language: Materiality and Risk

"Materiality” is becoming part of the fabric of sustainable business.

For the uninitiated, materiality is an accounting or auditing term that refers to the estimated effect that a given piece of information may have on a company’s value—its current or future stock price, for example. If a CEO has been diagnosed with a terminal disease; if a company is being investigated for bribery by a government agency; if its profit or loss needs to be restated by a significant amount—all are examples of something that is “material,” from an investor or stakeholder point of view.

So, when does sustainability become a materiality issue?

Continue Reading