Matter of opinion exploring the socio-political nature of materiality disclosures in sustainability reporting

Puroila and Mäkelä seek to unfold the seemingly institutionalised practice of materiality assessment in sustainability reporting in a deliberative democratic setting, in which companies tend to focus on technicalities in preparing a materiality matrix. The materiality assessment in that setting is viewed as a corporate discursive arena where the company and its stakeholders discuss material topics in an assumed ‘ideal speech situation’, leading to acceptance of consensus by all stakeholders. Diverse and even conflicting views on corporate sustainability among stakeholders seem to have been narrowed down in current practice through compromising and reaching consensus. Pluralism is unified to reach consensus in order to achieve sustainability reports that are focussed on what really matters by cutting down the amount of unnecessary sustainability information. When the socio-political aspects of stakeholder engagement are ignored in that way, it is likely that information which is actually material for stakeholders is not included in the sustainability report. In this regard, management discretion tends to dominate the process of capturing sustainability issues in the development of the materiality matrix. Consequently, the interest of stakeholders might not be reflected in the report because they lack the power to urge the company to report their perceived material issues. This paper contributes to the contextualisation of agonistic democratic principles (as opposed to deliberative ones) in materiality assessment, asserting that pluralism and contestation of ideas should not be replaced by apparent unity, despite the inevitable compromises necessary to reach consensus. Such compromises in the agonistic democratic setting should be viewed as political acts that appreciate and acknowledge differences of opinion in reaching consensus on sustainability topics and such differences must be disclosed in the sustainability report. Agonism is rooted in a political theory which recognises that dissent and conflict are inevitable, even permanent, but it seeks to accept such conditions in positive ways (see Mouffe 1999). Contextualising agonism in materiality assessment potentially offers greater inclusiveness, transparency and accountability. That is because a wide range of stakeholders take part in a critical dialogic engagement by which the sustainability report discloses dissent arising from the process of reaching consensus in defining the report’s content. Critical dialogic engagement, in the context of sustainability reporting, is an engagement with various stakeholders whereby individuals are able to express their sustainability views in undistorted conditions and agree ‘not to abuse their powers to achieve predetermined outcomes’ (see Bebbington et al. 2007, 373). The divergent sustainability views among stakeholders are still preserved with mutual respect, even when the consensus has been achieved. However, such a critical dialogic approach receives relatively less attention in practice than its technical-rational counterpart. Inspired by this research, future research could be undertaken by triangulation of (longitudinal) document analysis and interviews in exploring economic, political, sociocultural and legal barriers to adopting a critical dialogic approach in materiality assessment. On top of that, future research could also explore ‘managerial capture’ arising from the unification of pluralism which is likely to be present in the overly technical approach of materiality matrix development.