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What is a Materiality Matrix?

December 15, 2022

News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)

Regarding sustainability, which topics are relevant can differ massively from company to company. A manufacturing company, for example, places more emphasis on occupational safety and employee health. At the same time, for a swimming pool operator, the energy balance and the elimination of chemicals for water purification are very relevant.

Material sustainability issues for a company are those that are considered important by stakeholders and the company and have a high impact on the sustainability of the company.

What are the benefits of a materiality matrix?

A materiality assessment is a useful tool to assess economic, environmental and social impacts and to make improvements for the sustainability and future viability of the company. Positive aspects of the assessment include:

  • Uncovering opportunities and risks of the company
  • Better information for strategic and operational decisions
  • The basis for sustainability reporting
  • Increased credibility and transparency
  • Opportunity for process optimisation and product innovation
  • The process can be the start of a valuable stakeholder dialogue

How does a materiality matrix work?

Results from the materiality assessment create a graphical representation to form a materiality matrix consisting of a two-dimensional coordinate system:

The horizontal x-axis indicates the materiality of issues for a company.

The vertical y-axis maps the materiality of topics for the company’s stakeholders.

NOTE: The Global Reporting Initiative (GRI) titles the x-axis “materiality of economic, environmental and social impacts” and the y-axis “impact on stakeholder assessments and decisions.”

The stronger the sustainability impact of an aspect for the company, the further an aspect slides to the right. The more relevant it is to stakeholders, the further up it moves.

How do you create a materiality matrix?

STEP 1: Collect the sustainability aspects of the company. e.g. High energy consumption, employee health, production conditions in the supply chain, etc.

STEP 2: Rank the sustainability aspects on the x-axis according to the company’s importance.

STEP 3: Ask employees, suppliers, producers, customers, experts, etc., which aspects are most important to them – this can be done, for example, through online surveys, workshops, discussions and interviews.

STEP 4: Arrange the sustainability aspects on the y-axis according to their importance for the stakeholders.

What does a materiality matrix look like?

You can find an example of a materiality matrix on page 20 in Tchibo’s current Sustainability Report.

Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at or by mobile phone at +49 173 8710322.

Carsten Ernst
Managing Partner
Wirtschafts Treuhand Group
Stuttgart, Germany
– Expert in financial (IFRS) and sustainability (ESRS and GRI) reporting

– Audit of financial and sustainability reports in accordance with ISAs

– Member of the following AGN bodies:
– EMEA Board of Directors (Chairman)
– EMEA AAEC Accounting, Auditing and Education Committee (Member)