Why materiality matters

Materiality assessments are a powerful tool for organisations to focus their sustainability work. They help identify environmental, social, governance, and economic topics that matter most to a business and its stakeholders. A good assessment provides leaders with a clearer view of the topics needing attention, future risks and opportunities, and areas where investment can create the greatest value. The research emphasizes a shift from materiality as a reporting input to a strategic tool that builds resilience and guides decision-making.

Why do businesses undertake a materiality assessment?

Assessments are often triggered by a mix of external requirements and internal business needs. Reporting frameworks such as the Global Reporting Initiative (GRI), Corporate Sustainability Reporting Directive (CSRD), and Integrated Reporting require organisations to identify material matters. Strategy is where the most value is created, as organisations use materiality to enter new markets, respond to changing regulations, and prioritise investment. Counties Energy noted that the process helped narrow their focus and consolidate thinking on broad sustainability topics.

Introducing double materiality

Double materiality connects sustainability with business strategy by looking in two directions: impact materiality and financial materiality. Impact materiality examines how an organisation’s actions affect the environment, society, and economy, while financial materiality looks at how sustainability issues affect financial performance, risk profile, and long-term value creation. The research recommends refreshing assessments every two years, or sooner if there are significant changes to business strategy, market conditions, or regulations.

Our materiality research

The research analysed the public reporting of 266 organisations across Australia and Aotearoa New Zealand to understand how materiality is applied in practice. The analysis used AI-supported tools to extract information at scale, followed by expert review to identify trends. The study reviewed sustainability and annual reports published from 2024 to the end of 2025, focusing on listed companies, major private companies, and members of sustainability-focused business groups.

Our sample detail

The sample comprised 266 companies, with 52% from Australian lists, 40% from New Zealand lists, and 8% appearing in both. The sample is weighted towards larger organisations, with 51% classified as Very Large (1,000+ employees). The top industry categories include Finance (34 organisations), Metals & mining (29), Building & construction (24), and Retail (24). Reporting maturity varies, with 173 organisations disclosing Scope 3 emissions and 119 referencing or applying GRI standards.

Materiality assessment is common – but not yet universal

Of the 266 organisations analysed, 159 disclosed that they had completed a materiality assessment within the past five years. This practice is standard among larger and more mature reporters but is not yet a baseline practice across the whole market. A substantial minority of organisations appear to be operating without a recent formal assessment, indicating uneven maturity across the market.

Stakeholder engagement is the credibility gap

While 159 organisations presented material topics, only 72 disclosed a clear engagement method, and only 65 named specific stakeholder groups engaged for the assessment. Common methods include workshops, focus groups, interviews, and surveys. The lack of detailed information on how topics were identified and prioritised represents a credibility gap for many organisations in their public reporting.

Double materiality is more common in practice than in name

Among the 159 organisations with recent assessments, 151 showed evidence of considering both outward impacts and inward business risks. However, only 40 organisations explicitly used the term ‘double materiality’. This indicates that dual-lens thinking is emerging in practice, particularly through climate and supply chain topics, even where formal terminology is absent. Additionally, lists have overtaken the matrix as the dominant reporting output, with 111 organisations presenting topics as a list.

Material topics show broad range of ESG topics

Health, safety and wellbeing is the most common material topic, identified by 75% of organisations. This is followed by climate-related business risk (68%), workforce capability and development (63%), and community engagement (59%). Climate remains highly visible, with 90% of organisations identifying at least one climate, carbon, or energy-related topic. Australian organisations focus more on workforce capability and ethics, while New Zealand organisations prioritise climate-related risk and carbon emissions.

Frameworks and reporting infrastructure appear to drive maturity

Reporting frameworks are a clear signal of maturity. Among organisations referencing or applying GRI, 93% had completed a materiality assessment, compared with 33% where GRI was not stated. Larger organisations are also more likely to show mature practice, with 71% of Large and Very Large organisations disclosing an assessment. Framework use, external assurance, and listed-company environments also appear to be strong indicators of maturity.

Conclusion

Materiality assessments are common among large organisations, but real value is found in using findings to make better decisions. A strong assessment connects stakeholder insight, business risk, and impact to strategy, targets, and investment. Materiality creates the most value when it moves from simply determining what to report to answering what decisions should be made in everyday business practice.