How is financial materiality measured and what framework is it based on?

Financial materiality is based on the concept that performance on non-financial issues has a material impact on a company’s financial performance. Extensive research has gone into evaluating exactly which issues are financially material for companies within a specified industry.

Clarity AI’s Industry Consensus materiality matrix is built on top of SASB’s materiality map and industry consensus (research from institutions like Goldman Sachs, consultants, etc), layering on academic research and industry best practices to assign GICS-4 sub-industry-specific weights to the individual metrics that constitute the ESG Risk module. This approach adds depth to SASB’s materiality map, accounting for differing levels of materiality for each metric.