Material sustainability information and reporting standards. Exploring the differences between GRI and SASB

Abstract

Purpose This paper aims to contribute to the emerging debate on materiality with novel and original insights about the managerial and theoretical implications related to the adoption of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) as reporting standards. Furthermore, the paper will evaluate the main drivers that favor the combination of the two standards by companies to develop new knowledge about the hierarchical relationship between financial and sustainability materiality. Design/methodology/approach Building on a sample of 2,046 US listed companies observed during the period 2017–2020, the research is conducted using quantitative methods. Multinomial logistic regressions are used to evaluate the differences between GRI and SASB’s adoption. Findings The analysis highlights that financial and sustainability materiality are driven by different purposes. In detail, SASB’s adoption is driven by factors directly related to financial dynamics, while GRI’s adoption is influenced by the existence of corporate governance mechanisms inspired by sustainable and ethical principles. Furthermore, the last analysis reveals that the combination of the two standards is characterized by the predominance of sustainability materiality. Originality/value To the best of the authors’ knowledge, this is the first empirical study on the relationship between financial and sustainability materiality.

Nonfinancial sustainability reporting, management legitimate authority and enterprise value

“…In contrast, global reporting initiative’s (GRI) adoption is influenced by the existence of corporate governance mechanisms inspired by sustainable and ethical principles. Furthermore, combining the two standards is characterized by the predominance of sustainability materiality (Pizzi et al , 2022). However, it criticized the “harmonization” of sustainability reporting frameworks and standards that occurred alongside an increase in ESG investment during the COVID-19 pandemic.…”

New vision and purpose for Strategic Change: Branching out into the future, rooting from our legacy

“…Simone Pizzi is an Assistant Professor in Business Administration at the Department of Economic Sciences at the University of Salento (Italy). His research focuses on corporate accountability and business strategy with a specific focus on the managerial implications related to adopting sustainable and ethical practices (Pizzi et al, 2022). He is also an expert on quantitative research methods, social media analysis, and text analysis (Pizzi et al, 2023).…”

Must social performance ratings be idiosyncratic? An exploration of social performance ratings with predictive validity

“…MSCI and Sustainalytics, predominantly focus on the financial materiality approach to ESG assessment, thus emphasizing the effects of sustainability issues on the reporting company and its owners rather than the effects of sustainability issues on society (cf. Grewal et al , 2020; Pizzi et al , 2022). This should not be seen as an expression of homogeneity, although some findings suggest that raters are affected by a global homogeneity trend (Saadaoui and Soobaroyen, 2018) and ESG practices can be affected by political changes (Aboud and Diab, 2019), because there is evidence of substantial differences between raters because of theorizing idiosyncrasies (Chatterji et al , 2016).…”