Written by Aaron Saw, head of corporate reporting insights - financial

The latest instalment of ACCA’s sustainability reporting series takes a practical approach to helping businesses determine material information for sustainability reporting. 

The article sets out three steps to determine material information to be disclosed:

1. Identify the organisation’s sustainability-related risks and opportunities (SRROs)
2. Assess whether SRROs could affect the organisation's prospects
3. Determine material information for disclosure

Each step is supplemented with illustrative, anonymised real-life examples to inspire our community of accountants, finance and business professionals to learn, adapt and improve their approaches to identifying and communicating risks and opportunities. 

Given the severe operational disruptions that weather-related events are causing many businesses, the examples featured are biased towards climate-related risk. Small and medium sized entities (SMEs) also feature in the examples to demonstrate how smaller organisations approach reporting. 

The article emphasises the importance for organisations to take a holistic approach in creating and communicating material information about their SRROs and recommends all organisations to:

• allocate resources to start identifying SRROs arising from the resources and relationships in the value chains on which they depend and those that their activities would affect
• provide the most relevant sustainability-related information they can and continue to improve the reporting process over future reporting cycles
• use knowledge and expertise gained in determining material information in one reporting cycle to improve the communication of material information in the following cycle.