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MEDAR
31,6 Material sustainability information
and reporting standards. Exploring
the differences between GRI
1654 and SASB
Received 3 November 2021 Simone Pizzi
Revised 19 April 2022
21 July 2022
Dipartimento di Scienze dell’Economia, Universita del Salento, Lecce, Italy
Accepted 21 September 2022
Salvatore Principale
Dipartimento di Diritto ed Economia delle Attività Produttive,
Università degli Studi di Roma La Sapienza, Roma, Italy, and
Elbano de Nuccio
Dipartimento di Management, Finanza e Tecnologia,
Università LUM Giuseppe Degennaro, Casamassima, Italy

Abstract
Purpose – This paper aims to contribute to the emerging debate on materiality with novel and original
insights about the managerial and theoretical implications related to the adoption of the Global Reporting
Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) as reporting standards. Furthermore,
the paper will evaluate the main drivers that favor the combination of the two standards by companies to develop
new knowledge about the hierarchical relationship between financial and sustainability materiality.
Design/methodology/approach – Building on a sample of 2,046 US listed companies observed during
the period 2017–2020, the research is conducted using quantitative methods. Multinomial logistic regressions
are used to evaluate the differences between GRI and SASB’s adoption.
Findings – The analysis highlights that financial and sustainability materiality are driven by different
purposes. In detail, SASB’s adoption is driven by factors directly related to financial dynamics, while GRI’s
adoption is influenced by the existence of corporate governance mechanisms inspired by sustainable and
ethical principles. Furthermore, the last analysis reveals that the combination of the two standards is
characterized by the predominance of sustainability materiality.
Originality/value – To the best of the authors’ knowledge, this is the first empirical study on the
relationship between financial and sustainability materiality.
Keywords SASB, Global reporting initiative, Double materiality, Corporate governance
Paper type Research paper

1. Introduction
In recent years, policymakers and companies have given increasing attention to
sustainability reporting. Evidence of this shift was apparent in a Klynveld Peat Marwick
Goerdeler report, demonstrating that 80% of N100 companies reported on sustainability in
2020 (KPMG, 2020). The International Financial Reporting Standards (IFRS) further
Meditari Accountancy Research highlighted this paradigm shift, noting the overlapping effects of nonfinancial regulation,
Vol. 31 No. 6, 2023
pp. 1654-1674
stakeholder pressures, investor behaviors and sustainability risks in value-creation
© Emerald Publishing Limited
2049-372X
processes (IFRS, 2020). Thus, recent years can be considered a turning point for accounting
DOI 10.1108/MEDAR-11-2021-1486 scholars interested in evaluating sustainability reporting practices (Carroll, 2021).
 The concept of “materiality” represents a central topic within the emerging debate about Differences
sustainability reporting’s new frontiers. Recently, interest has grown in embedding between GRI
information that synthesizes the financial impacts of sustainability actions in sustainability
reporting. However, the preparers’ varying approaches influence the achievement of this
and SASB
ambitious goal during materiality assessments. In fact, the balance between financial and
nonfinancial information is affected by preparers’ personal beliefs and orientations toward
sustainability. Thus, recent years have seen increased interest in the rapid growth of new
reporting standards and frameworks (Senkl and Cooper, 2022). 1655
The involvement of new standard setters is a direct consequence of the different
positions taken by the main actors involved in the debate. In fact, the current debate is
characterized by a conflict between the methodological approaches proposed by the
International Sustainability Standard Board (ISSB) and the Global Sustainability Standard
Board (GSSB). The ISSB endorses a methodological approach based on financial materiality
with support from the IFRS, the Value Reporting Foundation and the Climate Disclosure
Standards Board. The GSSB encourages the adoption of a more holistic approach based on
double materiality and has the support of leading institutions, such as the Global Reporting
Initiative (GRI) and the European Financial Reporting Advisory Group (EFRAG).
The two factions have substantive and symbolic differences. In fact, moving from
financial materiality to double materiality requires the ex ante identification of companies’
positive and negative externalities in terms of sustainable development (Adams et al., 2021).
The sociological approach of the double materiality principle stems from the existence of
environmental crises in capitalist societies (Pichler et al., 2020). Extending this concept to
sustainability reporting, double materiality encourages companies to evolve from strategies
based on short-termism toward more comprehensive approaches. Such approaches
underscore companies’ crucial role in achieving the ambitious targets of the sustainable
development goals. These differing approaches to materiality assessments impact the
information included in the reports. From a theoretical point of view, sustainability reports
prepared following the materiality approach proposed by the ISSB focus more on financial
dynamics than those inspired by the GSSB. Recently, the GRI and Sustainability
Accounting Standards Board (SASB) have confirmed this assertion by attempting to
identify areas of overlap between them (GRI and SASB, 2021). In fact, the GRI and SASB
have agreed that there is an opportunity to consider the two approaches as complementary
instead of opposing. Furthermore, the International Organization of Securities Commissions
(2021) considers their integration as a reliable proxy of double materiality.
Despite this evidence, the scientific debate regarding the contrast between the two
approaches remains characterized by a high degree of fragmentation due to the novelty of
the debate about SASB reporting and double materiality (Grewal et al., 2021). In this regard,
accounting scholars have opened up many research agendas to fill this knowledge gap with
unique and original insights (Adams et al., 2021; La Torre et al., 2020). Previous studies have
underscored the need to consider the main factors that impact attitudes toward disclosing
information using sustainability materiality instead of financial materiality and vice versa
(Baumüller and Sopp, 2022; Fasan and Mio, 2017a). Furthermore, the hybridization of
sustainability reporting practices has highlighted an opportunity to consider integrating the
GRI and SASB as a proxy of double materiality (Jørgensen et al., 2022).
Building on a methodological approach based on quantitative methods, the paper aims to
explore the relationship between corporate governance and sustainability reporting
practices. Furthermore, using GRI and SASB as proxies for two alternative approaches to
materiality, this paper will provide new insights into the different factors that impact their
adoption. In this regard, the choice to analyze GRI and SASB results from their differing
MEDAR definitions of “materiality.” On the one hand, GRI defines materiality as “the organization
31,6 prioritiz[ing] reporting on those topics that reflect its most significant impacts on the
economy, environment, and people, including impacts on human rights” (GRI, 2020). On the
other hand, the SASB proposes the following definition:
[. . .] information is financially material if omitting, misstating, or obscuring it could reasonably
be expected to influence investment or lending decisions that users make based on their
1656 assessments of short-, medium-, and long-term financial performance and enterprise value.
(SASB, 2020)
Following the suggestions of academics (Grewal et al., 2021; Jørgensen et al., 2022) and
practitioners (IOSCO, 2021; SASB, 2021), this analysis will consider the integration of the
two standards as a proxy of double materiality.
This analysis is built using panel data analysis on a sample of US companies extracted
from SASB’s official database. The sample consists of 2,046 listed companies in the USA
observed between 2017 and 2020. The choice to consider the USA as a research setting was
driven by the opportunity to analyze an institutional context characterized by SASB’s wide
and early adoption (Schooley and English, 2015).
The paper is structured as follows. Section 2 consists of a literature review of
sustainability reporting and materiality. In Section 3, we describe our empirical approach
before illustrating our results in Section 4. Section 5 consists of an in-depth discussion of the
main insights collected, while Section 6 offers our theoretical and practical reflections on the
research.

2. Literature review
2.1 Sustainability reporting’s evolutionary pathway
Social and environmental accounting (SEA) represents a standalone research area in
accounting studies. In recent decades, many academics have tried to extend financial
accounting theories to SEA to collect evidence about emerging tasks, such as nonfinancial
reporting practices. However, since the first wave of studies on SEA, academics have agreed
on the existence of conceptual barriers that negatively affect the generalization of financial
reporting’s insights to nonfinancial reporting dynamics. In particular, Gray et al. (1995)
argue that the absence of systematic reporting by organizations has made traditional
“positive” research more difficult for accounting scholars. Despite the existence of
similarities between reports, nonfinancial reports prepared voluntarily have been
characterized by low degrees of standardization caused by the absence of mandatory
reporting standards and frameworks (Adams and Narayanan, 2010). In addition, only
during the past few years have policymakers started to regulate the disclosure of
nonfinancial information on a mandatory basis (Jackson et al., 2020; La Torre et al., 2018).
More than 20 years from the theoretical insights highlighted by Gray et al. (1995), SEA
studies have been characterized by relevant paradigm shifts caused by the increasing
attention paid by companies, policymakers and stakeholders to nonfinancial reporting
practices. In particular, financial markets have been characterized by the rapid growth of
nonfinancial reports disclosed on a mandatory or voluntary basis. Nowadays, even in the
absence of specific legal requirements about nonfinancial reporting practices, disclosing
nonfinancial information represents a strategic driver to engage with stakeholders (Deegan,
2019). In this sense, criticisms related to the absence of systematic reporting practices by
companies represent a topic that is no longer relevant to accounting scholars (KPMG, 2020;
The Alliance for Corporate Transparency, 2020). The past few years have been
characterized by a wide diffusion of studies, based on qualitative, quantitative or mixed
methods, about nonfinancial reporting practices (Cho, 2020; Schaltegger et al., 2013). Thus, Differences
the quantitative global increase in the nonfinancial reports disclosed annually has been between GRI
followed by a consequent proliferation of studies on nonfinancial reporting practices.
Contrary to the first wave of studies that were characterized by the wide adoption of
and SASB
quantitative approaches to evaluate the main determinants of corporate reporting practices,
during the past few years, academics have started to consider managerial implications
related to the implementation of nonfinancial reporting systems (Bebbington and Unerman,
2020; Unerman, 2008). In particular, many academics agree about the existence of different
1657
externalities related to the disclosure of nonfinancial information by companies. Specifically,
many studies have been conducted to assess the interlinkages between sustainability
reporting and different functional areas, such as finance (Mio et al., 2015), marketing (Pérez,
2015), logistics (Govindan et al., 2021) and human resource (Buhmann, 2016). Furthermore,
academics have paid specific attention to the main constraints and opportunities related to
the disclosure of nonfinancial information in an institutional context characterized by
multiple pressures from regulators and policymakers (Jackson et al., 2020; Mittelbach-
Hörmanseder et al., 2021).

2.2 Toward a new concept of materiality

The need to rethink nonfinancial reporting has been driven by several factors. However,
despite the coexistence of these factors, academics have agreed on the enabling role covered
by increasing awareness of the need to actively contribute to sustainable development
(Bebbington and Unerman, 2020). In this regard, an increasing number of companies have
started to integrate sustainable and ethical practices into their strategic plans. Furthermore,
pressures from internal and external stakeholders have favored this paradigm shift (Arjaliès
and Mundy, 2013; Ingham and Havard, 2017). Thus, the current scenario is characterized by
many organizations disclosing their nonfinancial information to legitimatize their strategies
within accountability tools, such as reports, social media and corporate websites (Carroll,
2021; Lodhia et al., 2020). However, the quantitative increase in the overall amount of
nonfinancial information disclosed yearly by companies worldwide does not signal a high
degree of attention to sustainable development. In fact, following the theoretical framework
of legitimacy theory proposed by DiMaggio and Powell (1983), many academics have agreed
on the existence of an overall attitude by practitioners to disclose nonfinancial information
to comply with legal pressures or to respond in a proactive way to market pressures.
According to this evidence, the current scenario is characterized by an intense debate on
sustainability reporting practices. In particular, many studies have been developed to
evaluate the new frontier of “materiality,” which represents a key principle in sustainability
accounting practices (Baumüller and Sopp, 2022). In fact, materiality analysis is a critical
task for preparers because it summarizes their orientation toward sustainable development
(Cerbone and Maroun, 2020). Thus, the prioritization of certain themes should consider
users’ expectations to develop an effective engagement strategy (Fasan and Mio, 2017b).
However, disclosing sustainability information according to materiality principles also
requires that material matters be determined and communicated concisely and
transparently (Gerwanski et al., 2019a). In this regard, similar to financial reporting
practices, many standard setters have identified alternative definitions of materiality to
favor the achievement of goals, such as transparency, comparability and reliability
(Abhayawansa and Adams, 2021; Calabrese et al., 2019). However, the proliferation of
alternative approaches to materiality negatively impacts report standardization, which
represents a critical goal for international policymakers and standard setters.
MEDAR At present, the debate about materiality is characterized by relevant contributions made
31,6 by international standard setters and policymakers to conceptualize new approaches to
materiality based on the integration of financial and sustainability materiality (Adams et al.,
2021; EFRAG, 2021). In particular, the past few years have been characterized by many
attempts made by policymakers and standard setters to “monetize” socially responsible
activities to move from a “value-based” toward an “impact-based” accountability (Adams
1658 et al., 2020; Busco et al., 2020). In this regard, the coming years will be characterized by a
progressive integration of financial and nonfinancial information.
However, the scientific debate is characterized by different perspectives on the
effectiveness of these interventions (Bebbington and Unerman, 2020; O’Dwyer and
Unerman, 2020). On the one hand, accounting scholars agree on the opportunity to identify
the financial value of sustainability practices (Haji et al., 2022). This evidence has also been
supported by the entrance of the International Financial Reporting Standards Foundation
(IFRS) into the debate, which traditionally represents the leading standard setter in financial
reporting practices (IFRS, 2020). On the other hand, a relevant number of accounting
scholars interested in SEA have underlined the need to separate financial evaluation from
nonfinancial dynamics (Adams, 2022). In particular, many accounting professors have
highlighted the incoherence between the insights collected over the years by academics and
the proposal of the IFRS Foundation in their open letter to the chair of the IFRS Foundation
Trustees (Adams, 2020).

2.3 Global reporting initiative vs sustainability accounting standards board: an overview

In the past few years, the international arena has been characterized by the quick development
of new reporting standards based on different approaches to materiality (Adams and
Abhayawansa, 2021). Recent debate has been characterized by the direct contraposition
between the GSSB and the ISSB, which represent the main international reporting standard
coalitions. One of the main differences between the coalitions is represented by the materiality
approach, which represents a key item to evaluate their different approaches to sustainable
development and accountability practices (Reimsbach et al., 2020).
In expectation of the final publication of the new reporting standards proposed by the
EFRAG and the IFRS, the two main standard setters involved in the debate are the GRI and
the SASB. However, despite the existence of similarities between the standards, their
approaches to materiality are characterized by different theoretical foundations. Jørgensen
et al. (2022) highlight the existence of conflicting logic between the GRI and SASB that
impact users’ expectations and information needs. In particular, the adoption of the SASB
instead of the GRI will favor engagement with stakeholders who are more interested in
financial dynamics than sustainability performance. In fact, previous studies have agreed
that SASB indicators and financial metrics are positively correlated (Busco et al., 2020).
Increasing awareness of the need to disclose environmental, social and governance (ESG)
information has favored the hybridization of sustainability reports. In this regard, the latest
report released by The Alliance for Corporate Transparency (2020) highlights that many
companies have started to integrate GRI Standards with SASB. Voluntary integration has
also been supported by a recent agreement between GRI and SASB. Presently, the two
standards are collaborating to enhance the development of more comprehensive reports
based on the conjoint adoption of two different but complementary reporting standards (GRI
and SASB, 2021). Furthermore, the IFRS Foundation and the GRI activated a collaboration
in March 2022 (IFRS Foundation and Global Reporting Initiative, 2022). In this sense, the
combination of the two standards can be considered a proxy of a reporting approach
inspired by the principle of double materiality (Jørgensen et al., 2022).
 However, despite the relevance of the theme, scientific debate is characterized by a lack of Differences
evidence on the main practical differences between the two reporting standards (Busco et al., between GRI
2020; Jørgensen et al., 2022). Previous studies have underlined the need to evaluate the
relationship between corporate characteristics and the orientation toward materiality
and SASB
(Grewal et al., 2021). In this regard, research integrates scientific knowledge about
materiality and sustainability reporting through an empirical evaluation of the role of
corporate governance, which is a critical determinant considered by scholars in
sustainability accounting research (Hahn and Kühnen, 2013).
1659

3. Materials and methods

3.1 Sampling
The paper is built using quantitative methods on a sample of US corporations. We
considered the USA as research setting because it represents an institutional context
characterized by the overall lack of mandatory requirements about sustainability reporting
(Van der Lugt et al., 2020) and by the early adoption of the SASB (Schooley and English,
2015). In fact, despite the increasing attention paid by companies, policymakers and
practitioners to the official guideline released by the SASB, the first conceptual framework
was published only in 2017 (SASB, 2020). To fill the research gap identified in our study, the
research is conducted by combining two different data sets.
The first step consists of the identification of the starting sample. Using EIKON
Refinitiv, we extracted all the 2,046 US listed companies with ESG data available for the
entire period between 2017 and 2020. The period between 2017 and 2020 represents a
relevant time spam for SEA researchers. In fact, SASB published the first version of the first
conceptual framework in February 2017 (SASB, 2017), while the first sets of GRI Standards
were published in 2016 (Global Reporting Initiative, 2016). Thus, 2017 represents the first
year of voluntary early adoption of the GRI Standards by companies.
The second step of our analysis consists of the combination between the data extracted
from Refinitiv and the open data released by the SASB. Using the SASB Navigator, we
identified the 792 US companies that have reported their sustainability information in
accordance with the SASB guidelines. In this regard, the ESG data extracted from Refinitiv
were integrated with the original data released by the SASB, which are not available within
the platform.

3.2 Empirical model and data collection

The analysis is built using a quantitative approach based on multinomial logistic
regressions (MLR) (Croissant, 2003; Freese and Long, 2006). The use of MLR instead of other
types of regressions allows researchers to test different alternatives characterized by
independence. In fact, using an ordinal model would be inappropriate since the three
reporting methods are independent. In this sense, similar to previous studies on corporate
sustainability (Hörisch et al., 2017; Pinnuck et al., 2021), a multinomial logit model allows us
to test a single choice among alternative and independent approaches.
The dependent variable consists of a discrete variable, which may take values between 1
and 3. In detail, the dependent variable is coded 1 for GRI adopters, 2 for SASB reporters and
3 for hybrid approaches based on the combination between GRI and SASB. GRI adopters
(DV = 1) have been identified using Eikon Datastream, while SASB reporters (DV = 2) have
been selected using the official database provided by the SASB. Therefore, a mixed
approach (DV = 3) identification was conducted by combining the data collected on GRI and
SASB.
MEDAR Regarding independent variables, as evidenced in prior studies on corporate reporting
31,6 (Hahn and Kühnen, 2013), the analysis is built using corporate governance’s data extracted
from Eikon Datastream. Evaluating the dynamics of corporate governance is a widely
adopted methodological approach in accounting studies because of the existence of different
interlinkages between decision-making processes and accountability mechanisms (Howitt
et al., 2020; Velte and Stawinoga, 2020). Furthermore, Mcnally et al. (2017) highlight that
1660 managers played a central role in the selection of materiality analysis. In fact, their activities
in sustainability reporting processes are characterized by the use of a combination of formal
and informal methods for identifying material stakeholders, evaluating their reporting
expectations and engaging in specific ESG issues. In addition, they are actively involved in
the decision-making process related to the disclosure of nonfinancial information (Schooley
and English, 2015). Thus, the selection of a reporting standard based on financial materiality
instead of sustainability materiality, and vice versa, represents a task influenced by
personal orientations and beliefs.
For our purposes, we consider items related to board composition and functions. Board
size (B_SIZE), women directors (B_DIV), independent directors (B_IND) and chief
executive officer (CEO) duality (CEO_DUAL) have been considered proxies for board
composition. Furthermore, the existence of a corporate social responsibility (CSR)
committee (CSR_COM), financial expertise (FINANC), the provision of external assurance
(CSR_ASS) and financial incentives related to CSR performance (MBO) have been
considered proxies of the board’s functions. Finally, we also consider control variables to
avoid the risk of statistical bias. In detail, we consider ESG indicators and financial data.
The variables are summarized in Table 1.

4. Results
4.1 Descriptive analysis
Table 2 shows that 14.52% of the companies adopted GRI Standards, while only 1.60%
reported their sustainability information, according to the SASB. Furthermore, 2.68% of the
sample used a mixed approach based on a combination of the two standards. In this sense,
the overall picture that emerges reveals that 4.28% of the reports included in the sample
were prepared according to the SASB. However, the data reveal that 81.18% of the units did
not disclose information about their ESG performance. Thus, this evidence underlines the
need to enhance the transparency of sustainability information in the US context (Securities
and Exchange Commission, 2022).
Regarding the independent and control variables, the data reported in Table 3 highlight
the main characteristics of the companies included in the sample. The data on board
composition highlight that US boards are characterized by a high percentage of women and
independent directors, which are typically considered proxies directly related to
sustainability reporting practices. However, the data reveals that only a few companies
embedded a CSR committee in their governance systems. At the same time, 58% of boards
of directors are made up of directors with specific competences in the field of finance. Thus,
the combination of the two items confirms the marginal role of CSR practices.
Finally, following the methodological approach widely used in accounting and
management research (El-Helaly et al., 2020; Hsiao et al., 2021), a Pearson’s correlation
analysis (Table 4) is performed to exclude the presence of multicollinearity between
variables. The absence of values below the cutoff values, typically 0.7 or 0.8, confirms the
reliability of the empirical analysis (Kalnins, 2018).
Variable Measures References
Differences
between GRI
Dependent variable and SASB
DISC The variable taking the value of 0 if Our elaboration
the company does not publish a
sustainability report, 1 if the
company publishes a GRI-based
report, 2 if the company publishes a 1661
SASB based report, 3 if the company
adopts a mixed approach based on
the combination of GRI and SASB
Independent variables
B_SIZE Number of directors involved in the Katmon and Farooque (2017),
board Venturelli et al. (2020)
B_DIV Percentage of women directors Ben-Amar et al. (2017), Tingbani
involved in the board et al. (2020)
B_IND Percentage of independent directors García-Sanchez et al. (2019b);
involved in the board Javaid Lone et al. (2016)
CSR_COM Presence of a CSR committee Helfaya and Moussa (2017),
Tingbani et al. (2020); Venturelli
et al. (2020)
CSR_ASS Presence of external assurance Chi et al. (2020), Venturelli et al.
(2020)
CEO_DUAL Dummy variable if the CEO is Katmon and Farooque (2017), de
simultaneously chair the board Villiers et al. (2011)
FINANCE Percentage of board members who Arayssi et al. (2020); Gallego-
have either an industry specific Álvarez and Pucheta-Martínez
background or a strong financial (2020)
background
MBO Existence of incentives related to the Derchi et al. (2020), Hartikainen
ESG performance et al. (2021)
Control variables
SOC_SCORE Social Score Asset 4 (60 indicators) Cheng et al. (2014), Duque-Grisales
and Aguilera-Caracuel (2019)
GOV_SCORE Governance Score Asset 4 (48 Cheng et al. (2014), Duque-Grisales
indicators) and Aguilera-Caracuel (2019)
ENV_SCORE Environmental Score Asset 4 (57 Cheng et al. (2014), Duque-Grisales
indicators) and Aguilera-Caracuel (2019)
DEBT_EQ Debt equity ratio Karaman et al. (2018); Khalil and
O’sullivan (2017) Table 1.
ROA Return on assets Bodhanwala and Bodhanwala Variables’
(2018), Isidro and Sobral (2014) description

Variable Description Count (%)

DISC = 0 Nonreporters 6,644 81.18

DISC = 1 GRI Reporters 1,189 14.52 Table 2.
DISC = 2 SASB Reporters 131 1.60 Descriptive statistics.
DISC = 3 Mixed Approach 220 2.68 Analysis of the
Total 8,184 100 dependent variable
MEDAR Variables Obs Mean SD Min Max
31,6
Independent variables
B_SIZE 8,181 9.418 2.472 1 33
B_DIV 8,180 19.184 11.265 0 100
B_IND 8,182 79.784 12.329 0 100
CSR_COM 8,184 0.271 0.445 0 1
1662 CSR_ASS 8,184 0.083 0.275 0 1
CEO_DUAL 8,109 0.979 0.144 0 1
FINANCE 7,969 58.969 18.874 0 100
MBO 8,184 0.129 0.335 0 1
Control variables
Table 3.
SOC_SCORE 8,184 42.355 20.031 0.46 97.875
Descriptive statistics. GOV_SCORE 8,184 48.738 22.026 0.159 98.777
Analysis of ENV_SCORE 8,184 22.655 26.896 0 97.749
independent and DEBT_EQ 8,179 2.357 163.563 2202.357 14,543.43
control variables ROA 8,146 0.004 0.235 14.058 0.952

4.2 Multilevel regression analysis

Table 5 shows the results related to the empirical model used to assess the relationship
between company profiles and reporting standards. The existence of a positive and
significant relationship between the three reporting approaches and CSR_COMM and
CSR_ASS presents an interesting result. In the following subsections, we provide an in-
depth explanation of the empirical results. The variables are in line with previous studies on
the topic, while the results related to Models (2) and (3) confirm the orientations that scholars
have recently taken.
4.2.1 Global reporting initiative reporters. Model (1) highlights that GRI adoption is
influenced by CSR_COMM (b = 1.125, p < 0.01) and CSR_ASS (b = 1.290, p < 0.01). The
positive relationship between the observed variables and the adoption of the GRI Standards
underlines the opportunity to consider the CSR committee as a “stakeholder-oriented
committee” (Eberhardt-Toth, 2017). In fact, the stakeholder orientation of this internal body
could lead a company to consider issues that are relevant to stakeholders as material (Arena
et al., 2015; Helfaya and Moussa, 2017). Thus, the stakeholder-centric approach proposed by
the GRI Standards is particularly suitable for companies interested in developing effective
dialogue with stakeholders. At the same time, the positive influence of external assurance
can also be related to the attempts made by companies to legitimize their contributions to
sustainable development (García-Sanchez et al., 2019a; Venturelli and Pizzi, 2020). In fact,
the choice to involve a third independent party in corporate reporting represents a strategic
choice to corroborate the reliability of the information through external verification
(Gerwanski et al., 2019b; Michelon et al., 2019). Thus, the choice to enhance the reliability of
the reports prepared according to the GRI Standards using external assurance represents a
proactive strategy to avoid the loss of legitimization caused by sustainability reporting’s
marketization and by the wide adoption of the GRI Standards.
Furthermore, we find a negative relationship between GRI adoption and B_DIV
(b = 0.011, p < 0.05). This negative relationship confirms, as was evidenced in previous
studies on gender diversity, that feminine boards are less oriented than masculine boards to
disclose sustainability information (Velte, 2019). In fact, the political nature of board
diversity can reduce the adoption of other policies related to CSR, such as sustainability
reporting. In this regard, Manita et al. (2018) shed light on the need to consider the
Variables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

DISC 1.000
B_SIZE 0.217*** 1.000
B_DIV 0.201*** 0.184*** 1.000
B_IND 0.168*** 0.143*** 0.254*** 1.000
CSR_COM 0.500*** 0.265*** 0.258*** 0.191*** 1.000
CSR_ASS 0.476*** 0.231*** 0.188*** 0.141*** 0.429*** 1.000
CEO_DUAL 0.032*** 0.065*** 0.028** 0.072*** 0.043*** 0.025** 1.000
FINANCE 0.027** 0.224*** 0.052*** 0.086*** 0.040*** 0.067*** 0.051*** 1.000
MBO 0.208*** 0.152*** 0.112*** 0.114*** 0.265*** 0.206*** 0.021* 0.024** 1.000
SOC_SCORE 0.476*** 0.281*** 0.304*** 0.226*** 0.556*** 0.459*** 0.051*** 0.017 0.220*** 1.000
GOV_SCORE 0.308*** 0.212*** 0.341*** 0.459*** 0.370*** 0.248*** 0.057*** 0.048*** 0.336*** 0.341*** 1.000
ENV_SCORE 0.589*** 0.306*** 0.306*** 0.215*** 0.679*** 0.526*** 0.049*** 0.068*** 0.276*** 0.713*** 0.425*** 1.000
DEBT_EQ 0.013 0.024** 0.016 0.007 0.009 0.004 0.001 0.015 0.009 0.023** 0.025** 0.013 1.000
ROA 0.067*** 0.094*** 0.080*** 0.033*** 0.084*** 0.059*** 0.008 0.082*** 0.039*** 0.056*** 0.134*** 0.129*** 0.050*** 1.000

Notes: ***p < 0.01; **p < 0.05; *p < 0.1

and SASB

Pearson correlation
Table 4.
1663
between GRI

analysis
Differences
MEDAR Independent variables Model 1: GRI standards Model 2: SASB Model 3: Integrate approach
31,6
B_SIZE 0.038 (0.023) 0.048 (0.044) 0.019 (0.042)
B_DIV 0.011** (0.005) 0.028*** (0.009) 0.009 (0.009)
B_IND 0.007 (0.005) 0.025** (0.011) 0.017 (0.011)
CSR_COM 1.125*** (0.110) 0.533** (0.227) 1.374*** (0.250)
CSR_ASS 1.290*** (0.150) 0.763** (0.326) 1.685*** (0.205)
1664 CEO_DUAL 0.384 (0.478) 0.522 (0.605) 0.177 (0.831)
FINANCE 0.001 (0.003) 0.015*** (0.005) 0.005 (0.005)
MBO 0.045 (0.121) 0.194 (0.253) 0.054 (0.196)
SOC_SCORE 0.026*** (0.003) 0.012* (0.007) 0.017*** (0.006)
GOV_SCORE 0.023*** (0.003) 0.007 (0.006) 0.030*** (0.005)
ENV_SCORE 0.045*** (0.003) 0.037*** (0.005) 0.060*** (0.005)
DEBT_EQ 0.004 (0.003) 0.003 (0.007) 0.007 (0.004)
ROA 0.328** (0.164) 0.442 (0.795) 1.046 (0.986)
_cons 7.973*** (0.697) 7.689*** (1.153) 11.469*** (1.326)
Obs. 7861
Pseudo R2 0.442
VIF 1.53
Table 5. Log likelihood 2,691.436
Empirical model Chi-squared 4,269.352
based on multilevel
logistic regressions Notes: Standard errors are in parenthesis ***p < 0.01; **p < 0.05; *p < 0.1

magnitude of female directors on boards in sustainability reporting studies. In this sense,

the scarce presence of female directors within the companies considered in this study can
explain this negative relationship. In addition, nonpositive relationships were found in
previous studies in the US context (Mallin et al., 2013).
Finally, the analysis reveals that all the ESG dimensions impact GRI reporting. In
particular, we find that SOC_SCORE (b = 0.026, p < 0.01), GOV_SCORE (b = 0.023, p <
0.01) and ENV_SCORE (b = 0.045, p < 0.01) positively influence the disclosure of
sustainability information according to the GRI Standards. This evidence confirms the
evidence of accounting scholars regarding the holistic approach of the guidelines released
by the GRI Standards (Abhayawansa and Adams, 2021). Furthermore, we find that ROA
(b = 0.328, p < 0.05) negatively impacts GRI reporting. This evidence confirms, as was
reported by Hahn and Kühnen (2013), the absence of a clear relationship between
sustainability reporting and profitability indicators.
4.2.2 Sustainability accounting standards board reporters. Model (2) reports the
exploratory results regarding the SASB variable. Similar to the results collected for GRI
adopters, the analysis revealed that CSR_COM (b = 0.533, p < 0.05) and CSR_ASS (b =
0.763, p < 0.05) positively impact SASB reporting. These results are interesting because
they highlight that the two items are also relevant for SASB reporting, which represents a
novel and unexplored research area for accounting scholars. However, despite the coherence
between the two empirical models, the analysis of the coefficients suggests that the two
factors are more relevant for GRI adopters. This evidence may be related to the peculiarities
of the SASB, which is characterized by a more rigid and standardized approach (Toth et al.,
2022). Thus, disclosing information using the more flexible approach proposed by the GRI
Standards requires the involvement of actors with a high degree of expertise in
sustainability reporting.
The analysis also revealed relevant results regarding the role of other corporate
governance characteristics. First, we found a positive relationship between B_DIV (b = 0.028,
p < 0.01) and SASB reporting. The contradiction between Models (1) and (2) highlights the Differences
peculiarities of the two reporting standards. This result underlines the relevance of the SASB between GRI
in the US context (Lynch et al., 2014). In fact, if we consider the percentage of women directors
as a proxy of orientation toward sustainability practices, the divergences between the two
and SASB
results reveal that US boards are probably more interested in disclosing information,
according to the SASB.
This reflection is also supported by the data collected about B_IND (b = 0.025, p < 0.05)
and FINANC (b = 0.015, p < 0.01). The impact of the independent director confirms the close
1665
attention paid by US companies to the financial dimension of sustainability (World
Economic Forum, 2020). Thus, the presence of a positive impact on SASB reporting and the
absence of an impact on GRI reporting are related to their attitudes toward considering the
financial dimension of sustainability, which is emphasized in the definition of materiality
proposed by the SASB (Consolandi et al., 2020). At the same time, the positive relationship
related to the presence of directors with financial backgrounds represents another relevant
data point. In fact, their interest in the SASB may be related to the progressive attention paid
by investors and financial institutions to ESG metrics (Schooley and English, 2015).
Finally, the analysis of the control variables revealed that SASB reporting is positively
influenced by ENV_SCORE (b = 0.037, p < 0.01) and negatively influenced by SOC_SCORE
(b = 0.012, p < 0.1). This evidence revealed the climate-centric character of the SASB,
which is considered by accounting scholars as a reporting tool particularly suitable for
companies interested in providing information about their contribution to climate change
and mitigation (Abhayawansa and Adams, 2021; O’Dwyer and Unerman, 2020).

4.3 Mixed approach

Model (3) considers companies that adopt a mixed approach based on the full integration of
the two standards. Model (3) mitigates the empirical differences between Models (1) and (2).
We find that the main variables able to impact the adoption of a mixed approach are
represented by CSR_COM (b = 1.374, p < 0.01) and CSR_ASS (b = 1.685, p < 0.01). The
central role covered by the two variables confirms the theoretical approach used by GRI and
SASB to legitimate their agreement. Although their approaches to the materiality principle
differ, GRI and SASB underline the opportunity for socially oriented companies to adopt a
mixed approach based on the integration of two independent but complementary standards.
In this sense, the enabling role covered by two variables traditionally considered by
accounting scholars as effective proxies of an orientation toward sustainable development
and business ethics suggests that the mixed approach can be considered the new frontier of
corporate reporting. In this sense, a mixed approach requires the involvement of internal
and external factors with a high degree of knowledge about sustainability reporting.
Among the control variables, it appears that the ENV_SCORE dimension is the only
variable that positively affects the dependent variables. Instead, the SOC_SCORE, with a
positive and significant coefficient in Models (1) and (3), turns out to be weakly negative
(b = 0.012, p < 0.1) in Model (2). Among the economic-financial indicators, only in Model
(1) does ROA (b = 0.328, p < 0.05) have a negative and significant coefficient.
Finally, the last insight is regarding the influence of the control variables on Model (3).
The analysis reveals that the three ESG dimensions influence the adoption of an integrated
approach based on GRI and SASB standards. In particular, the contributions provided by
SOC_SCORE (b = 0.017, p < 0.01), GOV_SCORE (b = 0.030, p < 0.01) and ENV_SCORE
(b = 0.060, p < 0.01) are positive. The similarities between Models (1) and (3) reveal that the
mixed approach can be considered an extension of GRI reporting. In fact, despite the
MEDAR combination of the two standards, the holistic approach proposed by the GRI Standards
31,6 prevails over the financial approach proposed by the SASB.

4.4 Robustness check

Finally, additional tests using logistic panel regressions are conducted to evaluate the
robustness of the results (Hox and Roberts, 2011; Maas and Hox, 2004). For our purposes, we
1666 replicate our analysis by considering a dummy variable for each of the following potential
configurations: GRI adoption, SASB adoption and the combined approach. The three
analyses confirm the main results collected using multilevel logistic regressions. In
summary, the coherence between the results collected using multilevel regression and those
from panel logistic regressions confirm the validity of the analysis (Table 6).

5. Discussion
In the past few years, the international context has been characterized by an increasing
awareness about the need to disclose sustainability information. This paradigm shift has
been relevant because it has generated many impacts on sustainability reporting practices,
which represent the main tool used by companies to engage with stakeholders. In this
regard, evaluating the interlinkages between corporate governance and sustainability
reporting practices is a critical task for academics because of the need to rethink the
traditional paradigms used in accounting research.
Materiality is one of the main concepts of interest in these new trends in accounting
research. The intense activities undertaken by worldwide standard setters favor the
development of many reporting standards characterized by different theoretical
underpinnings and practical implications (Abela, 2022). In particular, it is possible to
observe the polarization between financial and sustainability materiality, which are the two
main materiality approaches considered by international standard setters in their
accounting policies (Abhayawansa and Adams, 2021). Thus, the choice to adopt one or more
standards is not only a symbolic task but also a substantial activity with direct and indirect

Model 1: GRI standards Model 2: SASB Model 3: Integrate approach

B_SIZE 0.156** (0.071) 0.010 (0.033) 0.000 (0.047)

B_DIV 0.000 (0.014) 0.015** (0.007) 0.003 (0.010)
B_IND 0.001 (0.016) 0.020** (0.008) 0.014 (0.012)
CSR_COM 2.864*** (0.381) 0.658*** (0.182) 1.165*** (0.286)
CSR_ASS 2.702*** (0.423) 0.484*** (0.167) 0.691*** (0.204)
CEO_DUAL 0.313 (1.053) 0.393 (0.511) 0.061 (0.844)
FINANCE 0.005 (0.008) 0.009** (0.004) 0.004 (0.005)
MBO 0.051 (0.311) 0.017 (0.161) 0.200 (0.208)
SOC_SCORE 0.077*** (0.011) 0.008* (0.005) 0.001 (0.007)
GOV_SCORE 0.056*** (0.010) 0.002 (0.004) 0.017*** (0.006)
ENV_SCORE 0.136*** (0.012) 0.034*** (0.004) 0.044*** (0.006)
DEBT_EQ 0.018** (0.009) 0.004 (0.004) 0.006 (0.005)
ROA 0.053 (1.061) 0.807 (0.656) 1.234 (1.078)
_cons 20.267*** (2.045) 7.026*** (0.905) 9.340*** (1.412)
lnsig2u:_cons 3.240*** (0.142) 0.580 (0.381) 0.068 (0.304)
Obs. 7,861 7,861 7,861
ll 1,133.195 1,116.090 677.088
Table 6.
Robustness check Notes: Standard errors are in parenthesis; ***p < 0.01; **p < 0.05; *p < 0.1
impacts on business strategy. In this regard, many initiatives have been conducted by Differences
international organizations to encourage directors, auditors and chief officers to enhance between GRI
their skills in sustainability reporting and corporate communication (Global Reporting
Initiative, 2022).
and SASB
The research contributed to the debate through an in-depth evaluation of the main
differences between SASB adopters and GRI adopters, which represent two of the main
sustainability accounting standards used by companies worldwide. Furthermore, the
findings contribute to the debate by identifying the main relationship between corporate
1667
governance characteristics and the adoption of a materiality approach based on financial,
sustainability or double perspectives.
The main results collected within the study reveal the existence of relevant divergences
between GRI and SASB. In detail, the analysis highlights that the involvement of directors
with strong financial backgrounds is associated with the disclosure of nonfinancial
information, according to the SASB, while CSR committees are associated with the
disclosure of nonfinancial information, according to the GRI. Furthermore, external
assurance favors the adoption of GRI, while CEO duality and board diversity are positively
associated with SASB. Thus, disclosing nonfinancial information according to the SASB
can be considered an attempt to monetize nonfinancial performance with synthetic
indicators (Barby et al., 2021), while the adoption of the GRI guidelines can be considered a
signal of a long-term vision (Adams et al., 2021). This evidence is relevant because it
underlines the central role of corporate governance, which represents the main actor
involved in sustainability strategies (Hahn and Kühnen, 2013).
The analysis performed on the integration of SASB and GRI also reveals interesting
insights. The analysis reveals that materiality’s nonfinancial side prevails on financial
materiality. In fact, the comparison between empirical models reveals the existence of many
similarities with the empirical insights collected on GRI adoption. In this regard, the choice
to combine two alternative but complementary standards (Global Reporting Initiative and
SASB, 2021) can be considered an attempt made by virtuous companies to enhance their
accountability processes through the identification of alternative indicators. Thus, despite
SASB paying specific attention to the financial dimension of sustainability, companies that
adopt hybrid approaches are more interested to provide details about their contribution to
society.
Finally, the empirical models reveal that disclosing sustainability information according
to the SASB is positively influenced by environmental performance. This information is
particularly relevant for the advancement of scientific knowledge because it confirms the
central role of environmental dynamics in SASB reporting (Tregidga and Laine, 2021). In
fact, despite the central role that has been covered by the SASB within the international
debate, it remains characterized by a climate-centric approach (O’Dwyer and Unerman,
2020). Thus, embedding the GRI and SASB within a common framework could favor the
transition toward a more reliable approach based on the full integration of ESG indicators
(GRI and SASB, 2021).

6. Concluding remarks
Sustainability reporting is a central topic within political agendas worldwide due to the need
to encourage companies to integrate business models with sustainable and ethical principles
(Adams et al., 2020). However, the quantitative increase in nonfinancial reports disclosed
yearly by worldwide companies (KPMG, 2020) highlights the need for new reflections on the
theoretical foundations of sustainability reporting.
MEDAR Within this scenario, policymakers and academics have agreed on the opportunity to
31,6 rethink sustainability materiality, which represents a critical issue in the definition of
sustainability report content. However, the current debate is characterized by a high degree of
divergence caused by the different approaches to materiality. Thus, the coming years will be
characterized by intense discussions about the future of sustainability reporting (Adams, 2020).
The existence of potential criticism related to the adoption of reporting standards
1668 characterized by different approaches to materiality has been confirmed by our findings.
The analysis reveals that the choice to report sustainability information using SASB instead
of GRI is influenced by corporate governance characteristics. In particular, the analysis
highlights that SASB is associated with corporate governance with a high degree of
orientation toward financial themes, while the choice to disclose sustainability information
is usually related to the existence of corporate governance with specific skills about
sustainable development. Furthermore, we find novel insights into the integration of the two
standards, which can be considered an approximation of the concept of double materiality.
Although the adoption of the two standards requires a combination of financial and
sustainability materiality, the analysis reveals a high degree of similarity with the data
collected about GRI. In this sense, the combination of the two standards is characterized by
the dominance of the GRI, which confirms its role as the main international standard setters.
Evaluating the differences between GRI and SASB favors the identification of
theoretical, practical and policy implications. Regarding theoretical implications, the
research underlines that the GRI’s adoption is driven by the presence of some of the main
determinants usually considered proxies of an orientation toward sustainable development,
while the adoption of the SASB is driven by factors typically related to financial
backgrounds. However, despite the differences between the two standards, the analysis of
the combination of the two standards highlights the central role of sustainable behaviors.
Thus, combining SASB and GRI can be considered a best practice for companies interested
in engaging with their stakeholders through sustainability reporting practices.
The managerial implications of the research consist of the opportunity for preparers to
enhance their sustainability reporting practices using alternative approaches. In fact, the
increasing pressures from stakeholders on companies require the identification of new
engagement strategies. Furthermore, disclosing nonfinancial information according to the
two standards could enhance engagement with emerging stakeholders interested in
sustainability indicators, such as investors and financial institutions.
The political implications of the research regard the opportunity for policymakers to
consider accounting research in standard setting and policymaking. National and
supernational institutions should consider the implications related to the adoption of different
materiality approaches. In this sense, the evidence-based approach used by accounting scholars
could support the development of more effective rules for mandatory nonfinancial reporting.
Although many scholars have paid attention to the main determinants of GRI adoption,
SASB reporting and double materiality are two relevant but underexplored research fields
for accounting scholars. In this regard, there are many opportunities to contribute to the
debate through new research. First, future research could be conducted to fill the knowledge
gap considered in our research through the development of alternative proxies. Following
the methodological approach used in previous accounting research, scholars can develop a
scoring system to evaluate the transparency of the sustainability information disclosed by
early adopters. The second research direction consists of the opportunity to consider
alternative institutional settings to evaluate the robustness of our analysis. In particular, the
evaluation of the main implications related to the adoption of the SASB by European
companies can be relevant because of the existence of specific regulations regarding
sustainability reporting. Furthermore, we did not consider the effects related to cross-listing. Differences
The evaluation of the role covered by financial markets can be relevant for the advancement between GRI
of scientific knowledge about double materiality due to the lack of empirical evidence.
Finally, the research is affected by many limitations related to the evaluation of a limited
and SASB
time span and a specific institutional setting. In this regard, accounting scholars can
consider the limitations of our research as a starting point for future research in a novel and
unexplored field.
1669
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Simone Pizzi can be contacted at: [email protected]

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