The conversation around corporate sustainability is evolving. While ethical considerations remain important, a new era is emerging — one that prioritizes materiality over morality. Companies are increasingly focusing on sustainability issues that directly impact their bottom line and long-term success rather than solely pursuing initiatives based on ethical principles.

This shift is driven by several factors. Regulatory landscapes are changing, with frameworks like the Corporate Sustainability Reporting Directive (CSRD) pushing companies toward “double materiality,” commonly referred to as DMA.  Meanwhile, the new federal administration has ushered in a cultural sustainability vibe shift, as the MAGA movement remains hostile to ESG and DEI programs, despite the popularity of those initiatives among employees. At the same time, consumer demand for more sustainable and inclusive products and business practices hasn’t wavered, and the general public is increasingly sustainability-savvy — we can all spot greenwashing when we see it.

So, what do these sometimes competing trends mean for your company? Let’s dive in.

Read more: What we learned from the first wave of CSRD reports

Goodbye to bold (but often meaningless) sustainability targets

There was a time when every major company seemed to announce ambitious net-zero goals — impressive as a press release headline but either too far in the future or too reliant on cheap, suspect carbon offsets to create real impact. That era is over. Today, stakeholders, including investors and customers, demand concrete results. They want measurable outcomes, not just media buzz. This increased scrutiny pushes companies to move beyond vague commitments and demonstrate how sustainability efforts create tangible value.

What is materiality?

Double materiality (DMA), a foundation of CSRD reporting requirements, requires businesses to assess both how sustainability issues impact them financially (financial materiality) and how they impact the planet and society (impact materiality). This regulatory pressure compels companies to focus on the most relevant sustainability topics. But materiality isn't just about compliance — it’s about taking a strategic approach. Companies must prioritize the issues that matter most to their business and stakeholders. This involves conducting thorough assessments, engaging with stakeholders, and identifying the most significant impacts, risks, and opportunities (IROs).

Why does materiality matter?

Focusing on material topics allows companies to align sustainability efforts with business value. A materiality-driven approach enables companies to:

• Drive efficiency: By addressing material issues, companies can optimize resource use, reduce waste, and improve operational efficiency.
• Reduce costs and risks: Proactively managing material risks, such as climate change or supply chain disruptions, helps avoid costly consequences.
• Comply with regulations: Prioritizing material issues ensures compliance with evolving regulatory requirements, such as those related to emissions or human rights.
• Enhance reputation and brand value: Addressing material issues demonstrates a company’s commitment to sustainability, strengthening its reputation among stakeholders.
• Attract and retain talent: Employees, particularly younger generations, are increasingly drawn to companies with strong sustainability performance on material issues.

What about the moral case?

Morality isn’t irrelevant, as many material issues are inherently tied to ethical considerations. Fair labor practices and human rights, for example, are both morally sound and potentially financially material, as they impact reputation, supply chain stability, and operational efficiency. But research shows that communications that target material arguments are more effective than moral ones. So while the work involves a moral imperative, companies should focus on the value of the work, and not the ethical implications of it. 

What does this mean for my strategy? Where do I start? 

Begin with a materiality assessment (we can help with that). From there, develop a strategy and roadmap to address the most material issues relevant to your company. 

What does this mean for my communications?

As you refine your sustainability strategy, conduct an audit of your communications. Ask yourself:

• Are your sustainability messages focused on your most material issues?
• Do you have clear roadmaps so that stakeholders can understand your goals and how you’ll achieve them?
• Are you transparent about your progress?
• Are your communications backed by consistent, high-quality data?

The shift toward materiality over morality in corporate sustainability represents a more pragmatic and strategic approach. By focusing on what truly matters, companies can drive business value, manage risks, and contribute to a more sustainable future.

Need help navigating your approach to materiality? Our team of experts are here to help. Reach out any time.

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