Members of the Accountability Sustainability and Governance (ASG) Research Group were successful in responding to a call for research promoted by the Institute of Chartered Accountants of Scotland (ICAS) on “Materiality – Financial Statements and Beyond”. Xi Chen, Stuart Cooper, Ziyi Guo, Tim Kasim and Giovanna Michelon were able to secure funding to work on a project on “Impact and financial materiality assessments in corporate sustainability and financial reporting: interconnections, practices, processes, and challenges”.
The ASG research group has been actively involved in the recent developments around standard setting in sustainability reporting. In January 2022, they organised an academic roundtable focused on the debate around different conceptualisations of materiality in the context of sustainability reporting and wrote an open letter to the newly formed International Sustainability Standards Board and EFRAG that was endorsed by more than 100 scholars and practitioners.
Building on this expertise, the newly funded research project aims to understand conceptually how the two traditionally distinct reporting arenas of sustainability and financial reporting are increasingly becoming connected and overlapping and to explore empirically the connections between the two by analysing the extent to which non-financial material items identified in sustainability reports are also considered material for financial reporting purposes. In doing so, the project seeks to contribute to the conceptual, policy and practical developments of the double materiality concept which envisages the alignment and interconnection of the financial and impact materiality assessments in corporate reporting.
The research team is very excited to have the opportunity to work on this project together and looks forward to sharing the findings with colleagues.
The project is expected to run until February 2023.