Alliance for Corporate Transparency+Image
Materiality approach (id 1.10)
Is the approach taken to determining the materiality clearly articulated?

About the data

This metric belongs to the research implemented by Frank Bold, which analysed the disclosures of European companies pursuant to the rules introduced by the EU Non-Financial Reporting Directive (NFRD). The research is part of the Alliance for Corporate Transparency project, an initiative gathering leading NGOs to assess and monitor companies' sustainability reporting in order to provide evidence-based recommendations to improve and develop the legal framework.

The EU Non-Financial Reporting Directive lays down the rules on the disclosure of non-financial information by large companies based in the European Union. The Directive came into force for company reporting in 2018 and applies to large public-interest companies with more than 500 employees,covering approximately 6,000 companies across the EU. Under the Directive, companies have to publish reports on the policies they implement on:

- environmental protection
- social responsibility and treatment of employees
- respect for human rights
- anti-corruption and bribery
- diversity on company boards (in terms of age, gender, educational and professional background)

A proposal to reform the legislation is expected to be presented in early 2021 in order to improve the quality, consistency and reliability of corporate disclosure. This reform is central to the European Green Deal and the Sustainable Finance agenda.

For more information:

Alliance for Corporate Transparency

European Commission
This metric is asking whether the company's approach taken to determining the materiality is clearly articulated.