A key feature of the materiality determination process required by GRI is its inclusive nature…

In providing guidance on how to implement its “Principles for Defining Report Content”, the GRI’s G4 prescribes a materiality determination process of four steps: identification, prioritization, validation and review. This is done to determine material “Aspects” (categories of “Topics” or “Subjects”). The G4 guidance follows on its earlier protocols on report boundaries and materiality.

Global Reporting Initiative (GRI) - Amsterdam


The four step process required by the G4 Guidelines of the GRI involves:

  1. Identification of the Aspects and
 any other relevant topics, and their Boundaries (within the organization, its value chain or beyond), which might be considered to be reported on. This identification is based
 on the Principles of Sustainability Context and Stakeholder Inclusiveness.
  2. Prioritization 
of the Aspects and any other relevant topics from Step 1, to identify those that are material and therefore to be reported on. Prioritization should be based on the Principles of Materiality and Stakeholder Inclusiveness.
  3. Validation where the Principles of Completeness and Stakeholder Inclusiveness are applied to finalize the identification of the report content.
  4. Review takes place as the organization is preparing for the next reporting cycle. A review may focus not only on the Aspects that were material in the previous reporting period but also consider again the Principles of Stakeholder Inclusiveness and Sustainability Context.

In the Prioritization Step decisions have to be made on (i) thresholds and (ii) level of coverage. The threshold application is said to involve “qualitative analysis and quantitative assessment”. It considers the viewpoints reflecting influence on (all / prioritized) stakeholders and significance of impacts (likelihood and severity of related risks and opportunities). The quantified levels determined can be illustrated visually through the materiality matrix.

Key for those wanting to do away with “clutter”, level of coverage refers to the prominence, amount of data and narrative explanation disclosed by the reporting organization about a material Aspect. This involves Disclosure on Management Approach (DMA) and/or indicators (notably KPIs).

The Validation Step involves assessing the material Aspects against:

  • Scope – the range of Aspects covered in a report;
  • Aspect Boundaries – the description of where (for example a subsidiary or supplier) impacts occur for each material Aspect; and
  • Time – the completeness of selected information with respect to the reporting period.