Materiality

Most people just don’t read CR reports. Words like materiality might have something to do with it. Borrowed from financial reporting, this technical term could be just the ticket when you’re mingling with sustainability insiders. But in general, materiality is a turnoff—unless you’re satisfied talking amongst yourselves.


How
materiality
falls flat

It's miscue
central

It's miscue
central

Not many people know what materiality means, plus it sounds like too many other things. Throw the word at average readers, and they are likely to think you mean either materialistic, tangible or made of a material.

Even CR Pros find it confusing

Even CR Pros find it confusing

Blame the three most influential groups in CR reporting—the International Integrated Reporting Council (IIRC), the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI)—for sending mixed messages. They haven’t been able to agree on a definition of materiality.

It makes
lawyers
squirm

It makes
lawyers
squirm

In the legal world, if a court finds something material to a case, a company can be held liable. Even though materiality means something different to CR communicators, the word will still give a legal reviewer heartburn.


Why
we use it
anyway

It conveys
credibility

It conveys
credibility

Materiality sounds serious, because it is. Companies use materiality assessments to better understand the social, environmental and economic effects of their businesses. These assessments also indicate that companies care what their stakeholders have to say.

It's rooted in
accounting

It's rooted in
accounting

Materiality traditionally describes the threshold at which a company’s financial information becomes relevant to investors (e.g., a $100 million purchase vs. a $10,000 purchase). In CR terms, materiality signals that a company also evaluates the financial implications of its social and environmental impact.


What to do
instead

Resist the
temptation

Resist the
temptation

There’s empirical evidence that using a “million-dollar word” like materiality makes content seem less believable. Write simply, and readers are more likely to reward you with their trust.

Use it, then
lose it

Use it, then
lose it

Even when it makes sense to use materiality (like in your GRI-based CR report), apply it selectively, and stick with natural, conversational language the rest of the time.


The backstory

You’ve gotta wonder how a mouthful like materiality became a buzzword to begin with. Before the idea of materiality existed in the CR space, CR reports were trying to be everything to everyone. Materiality has become a big deal since the GRI released its G4 guidelines, where the principle has helped companies assess and report on only the issues that matter most to their business.

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Got a word that doesn’t work, but can’t think of another way to say what you mean? Leave us a comment and we just might add it to a future release. Problem solved!