ABSTRACT
This chapter describes materiality a cornerstone concept in accounting, determines the importance of an item for information users. Materiality is among a number of accounting concepts that have been adopted in sustainability report (SR), such as understandability, relevance and faithful representation. The chapter argues that the simultaneous pursuit of economic, environmental and social sustainability is rapidly becoming a strategic priority for enterprises across sectors and geographical regions. The process of determining materiality according to the Integrated Reporting framework consists of three elements: relevance, importance and prioritization. A SR conveys disclosures on an organization's impacts – be they positive or negative – on the environment, society and the economy. It contains a complete and transparent statement about the extent to which the organization contributed to – or, more likely, diminished – the sustainability of the planet. The SR examines the areas in which accounting affects its functional environment and seeks to develop accounting tools to assess these effects.
