Stakeholder engagement in the determination of materiality for sustainability reporting

Abstract

Sustainable business practices are fundamental for the future of business, society and the environment within which business operates. In this journey, stakeholders provide a sustainability compass that must be consulted by companies in determining and realigning the business context to their legitimate needs. Businesses have constantly been accused of an imperious attitude towards stakeholders that manifests in one directional conversations designed to manage rather than engage and report objectively on the state of their relationship with stakeholders. Whilst much exploration has been conducted on stakeholder engagement, the cardinal objective of this research was to explore the role of this engagement in determining the gradation of issues in the businesses’ sustainability reporting process. A review of other significant scholarly material highlighted gaps in the realm of this broad subject that were used in the construct of the research questions. Data in this qualitative study was obtained from sustainability practitioners employed by companies listed on the Johannesburg Stock Exchange. This was achieved through content analysis of their reports and structured in-depth interviews that sought to understand the materiality concept through their stakeholder engagement process. The findings suggest that stakeholder engagement and materiality determination in particular is a complex area fraught with a lot of challenges as well as diversity in approach and purpose. The findings also suggested that the determination of the sustainability content is a unilateral process instituted and guided by the reporting entity with no involvement of other stakeholders beyond the data-gathering phase.