Table 4 Thematic classifications,... | Emerald Publishing

Table 4

Thematic classifications, summary of methods, and main findings

Themes	Methods	Main findings
Ex post measure of materiality	Archival	Ex post materiality assessments employ content analysis predominantly, with variations in methodologies based on stakeholder engagement and ESG ratings. Approaches without stakeholder engagement, such as Fasan and Mio (2017) and Torelli et al. (2020), often utilize manual content analysis, assessing word count, relevance, or specific disclosure dimensions. Some, like Gerwanski et al. (2019), integrate materiality sections and comprehensive identification processes. Others, such as Aras et al. (2017) and Morgan et al. (2017), combine content analysis with entropy, TOPSIS, or frameworks such as FSSD and ISM. Indices by Beske et al. (2020) and Karagiannis et al. (2019) and the IIRC framework in Hassan et al. (2019) also showcase variations of content analysis-based materiality assessment. Approaches with stakeholder engagement include Calabrese et al. (2015) and Sepúlveda-Alzate et al. (2021), who incorporate customer and stakeholder feedback respectively. Pizzi et al. (2023) introduce dynamic materiality via social media interactions. ESG ratings-based studies, exemplified by Khan et al. (2016) and Busch et al. (2022), leverage ratings for materiality determination. Together, these studies offer comprehensive insights into ex post materiality, combining internal and external perspectives for a nuanced understanding of material issues
Ex ante measure of materiality	Deterministic Experiments Interviews Surveys (combinations of one or more) Materiality at aggregate level	The four categories of ex ante materiality assessment methods offer diverse insights and approaches for understanding and implementing materiality in sustainability reporting before the disclosure. Deterministic and archival based studies, exemplified by Hsu et al. (2013) and Calabrese et al. (2016), emphasize risk-based frameworks and fuzzy analytical hierarchy processes, showcasing the significance of objective, quantitative methods in anticipating material issues. Experiment-Based studies, as demonstrated by Moroney and Trotman (2016), Green and Cheng (2019), and Reimsbach et al. (2020), delve into the complexities of auditor judgments and stakeholder perceptions, underlining the need for strategic focus, strategy maps, and understanding diverse perspectives in a proactive manner. Survey based studies, like Karim et al. (2013), explore the role of firm size and stakeholder perspectives, spotlighting the influence of organizational characteristics and minority stakeholders in materiality determinations before disclosures. Materiality at aggregate level studies, such as Clarvis et al. (2014) and Berquier and Gibassier (2019), broaden the scope to country and city levels, introducing frameworks like E-RISC and highlighting the crucial interplay between environmental risks, governance mechanisms, and the overall context in advance of the reporting period. In synthesis, these ex ante categories collectively underscore the need for nuanced, context-specific materiality assessments before the reporting cycle, emphasizing the incorporation of quantitative, stakeholder-oriented, strategic, and micro- and macro-level considerations in comprehensive sustainability reporting frameworks
Consequences of materiality	Archival	Ex post materiality assessments, predominantly employing archival methods, yield crucial insights into the financial implications and investor responses to material CSR-related disclosures. Xie et al. (2023) reveal pricing anomalies linked to shareholder-related environmental risks, emphasizing shareholders' demand for higher returns in such scenarios. Pratoomsuwan and Chiaravutthi (2023) underscore the pivotal role of CSR materiality in investment decisions, with a clear preference for firms with material CSR over immaterial CSR. Their study also highlights that explicit materiality assessment influences investor judgments but lessens the impact when CSR issues are immaterial. Bush et al. (2022) contribute by demonstrating a positive correlation between continuous improvement in environmental ESG scores and future corporate financial measures. These collective findings emphasize the financial consequences of material disclosures and underscore the critical influence of materiality assessments on shaping investor perceptions and decisions
Determinants of materiality [further elaborated in Table 5]	Archival Experiments Surveys	Studies based on ex post materiality assessments, discourse of materiality determination process or the quality of materiality disclosure offer nuanced insights into the determinants of materiality disclosure. They are grouped in studies examining financial and accounting metrics, corporate governance, reporting characteristics, market factors, institutional and regulatory contexts, and business strategy reveal mixed results. Financial metrics, such as size and profitability, inconsistently explain material disclosure, suggesting potential endogeneity concerns. Corporate governance, reporting assurance, and ESG ratings exhibit varying relationships. Market factors, such as shareholding dilution, show negative associations, while industry competition and strategic orientations yield diverse outcomes. Additionally, the materiality determination process demonstrates inconsistencies across rating agencies, Integrated and Sustainability Reporting, and stakeholder perceptions. These findings underscore the intricacies of post-hoc materiality evaluations and call for a comprehensive understanding of determinants in sustainability reporting

Themes	Methods	Main findings
Ex post measure of materiality	Archival	Ex post materiality assessments employ content analysis predominantly, with variations in methodologies based on stakeholder engagement and ESG ratings. Approaches without stakeholder engagement, such as Fasan and Mio (2017) and Torelli et al. (2020), often utilize manual content analysis, assessing word count, relevance, or specific disclosure dimensions. Some, like Gerwanski et al. (2019), integrate materiality sections and comprehensive identification processes. Others, such as Aras et al. (2017) and Morgan et al. (2017), combine content analysis with entropy, TOPSIS, or frameworks such as FSSD and ISM. Indices by Beske et al. (2020) and Karagiannis et al. (2019) and the IIRC framework in Hassan et al. (2019) also showcase variations of content analysis-based materiality assessment. Approaches with stakeholder engagement include Calabrese et al. (2015) and Sepúlveda-Alzate et al. (2021), who incorporate customer and stakeholder feedback respectively. Pizzi et al. (2023) introduce dynamic materiality via social media interactions. ESG ratings-based studies, exemplified by Khan et al. (2016) and Busch et al. (2022), leverage ratings for materiality determination. Together, these studies offer comprehensive insights into ex post materiality, combining internal and external perspectives for a nuanced understanding of material issues
Ex ante measure of materiality	DeterministicExperimentsInterviewsSurveys (combinations of one or more)Materiality at aggregate level	The four categories of ex ante materiality assessment methods offer diverse insights and approaches for understanding and implementing materiality in sustainability reporting before the disclosure. Deterministic and archival based studies, exemplified by Hsu et al. (2013) and Calabrese et al. (2016), emphasize risk-based frameworks and fuzzy analytical hierarchy processes, showcasing the significance of objective, quantitative methods in anticipating material issues. Experiment-Based studies, as demonstrated by Moroney and Trotman (2016), Green and Cheng (2019), and Reimsbach et al. (2020), delve into the complexities of auditor judgments and stakeholder perceptions, underlining the need for strategic focus, strategy maps, and understanding diverse perspectives in a proactive manner. Survey based studies, like Karim et al. (2013), explore the role of firm size and stakeholder perspectives, spotlighting the influence of organizational characteristics and minority stakeholders in materiality determinations before disclosures. Materiality at aggregate level studies, such as Clarvis et al. (2014) and Berquier and Gibassier (2019), broaden the scope to country and city levels, introducing frameworks like E-RISC and highlighting the crucial interplay between environmental risks, governance mechanisms, and the overall context in advance of the reporting period. In synthesis, these ex ante categories collectively underscore the need for nuanced, context-specific materiality assessments before the reporting cycle, emphasizing the incorporation of quantitative, stakeholder-oriented, strategic, and micro- and macro-level considerations in comprehensive sustainability reporting frameworks
Consequences of materiality	Archival	Ex post materiality assessments, predominantly employing archival methods, yield crucial insights into the financial implications and investor responses to material CSR-related disclosures. Xie et al. (2023) reveal pricing anomalies linked to shareholder-related environmental risks, emphasizing shareholders' demand for higher returns in such scenarios. Pratoomsuwan and Chiaravutthi (2023) underscore the pivotal role of CSR materiality in investment decisions, with a clear preference for firms with material CSR over immaterial CSR. Their study also highlights that explicit materiality assessment influences investor judgments but lessens the impact when CSR issues are immaterial. Bush et al. (2022) contribute by demonstrating a positive correlation between continuous improvement in environmental ESG scores and future corporate financial measures. These collective findings emphasize the financial consequences of material disclosures and underscore the critical influence of materiality assessments on shaping investor perceptions and decisions
Determinants of materiality [further elaborated in Table 5]	ArchivalExperimentsSurveys	Studies based on ex post materiality assessments, discourse of materiality determination process or the quality of materiality disclosure offer nuanced insights into the determinants of materiality disclosure. They are grouped in studies examining financial and accounting metrics, corporate governance, reporting characteristics, market factors, institutional and regulatory contexts, and business strategy reveal mixed results. Financial metrics, such as size and profitability, inconsistently explain material disclosure, suggesting potential endogeneity concerns. Corporate governance, reporting assurance, and ESG ratings exhibit varying relationships. Market factors, such as shareholding dilution, show negative associations, while industry competition and strategic orientations yield diverse outcomes. Additionally, the materiality determination process demonstrates inconsistencies across rating agencies, Integrated and Sustainability Reporting, and stakeholder perceptions. These findings underscore the intricacies of post-hoc materiality evaluations and call for a comprehensive understanding of determinants in sustainability reporting

Source(s): Authors’ own work