Double Materiality in Sustainability Reporting: Revealing ESG-SDGs Connections for Businesses’ Awareness
The aim of this research is to investigate the concept of double materiality embedded in sustainability reporting requirements that address both business and society perspectives. In light of stakeholder, legitimacy, and institutional theories, this document explores how environmental, social, an...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Editura ASE
2025-08-01
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| Series: | Amfiteatru Economic |
| Subjects: | |
| Online Access: | https://www.amfiteatrueconomic.ro/temp/Article_3452.pdf |
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| Summary: | The aim of this research is to investigate the concept of double materiality embedded in
sustainability reporting requirements that address both business and society perspectives.
In light of stakeholder, legitimacy, and institutional theories, this document explores how
environmental, social, and governance (ESG) policies and practices (financial materiality)
included in a business strategy may be related to incentives for companies to prioritise
Sustainable Development Goals (SDGs) (impact materiality). The data are collected from the
Refinitiv Eikon database for nonfinancial international companies, over the 2015-2024
period. Parametric and nonparametric tests for differences in means, correlation analysis, and
fixed effects robust regressions are employed to validate three research hypotheses.
The results illustrate significant differences on financial and impact perspectives of
materiality in European Union (EU) companies, as compared to non-EU companies. Strong
associations between ESG scores and SDGs are identified and discussed using the double
materiality approach. SDGs prioritisation in general, but also mapped for environmental,
social, and governance, is found to have mixed impacts on ESG policies and practices.
The findings support the hypothesis that prioritisation of the SDGs may ensure a balance
among divergent interests of managers, investors, and other stakeholders. The study has
academic and practical contributions to management decisions that integrate sustainable
development goals to expand businesses' awareness of sustainability reporting requirements. |
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| ISSN: | 1582-9146 2247-9104 |