Materiality is central to sustainable finance. But what appears to be a straightforward concept is proving slippery in practice—and is triggering disagreements that could have significant implications for how companies disclose environmental and social indicators, and how regulators construct the market infrastructure on which sustainable finance depends.
Put simply, materiality is a measure of the importance of a piece of information when making a decision. But when this concept is used to assess the sustainability performance of a company, it becomes more complicated.
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