Impact materiality: a pre-condition for financial resilience
Published date: 05 November 2024
Article by Peter Paul van de Wijs, Chief Policy Officer
Corporate accountability is high on the global agenda, with the role of companies in addressing sustainability challenges a key thread throughout the recently concluded Biodiversity COP16 in Colombia, September's Climate Week NYC – and the upcoming Climate Change COP29 in Azerbaijan.
In his latest opinion piece, published on Medium, our Chief Policy Officer Peter Paul van de Wijs reflects on the growing acceptance that an understanding of impacts is a crucial step in assessing financial risk:
Embracing impact materiality is a necessity for measuring financial resilience
According to Peter Paul, disclosing corporate sustainability impacts is becoming essential to financial decision-making. Traditional reporting no longer fully captures the risks businesses face – and the reality is that most of a company’s impacts will, in time, become financially material.
Investors clinging to a traditional viewpoint may resist change but will ultimately be confronted by the consequences of global warming and end up with a portfolio of stranded assets, reputational damage and diminishing returns. Market participants are increasingly recognizing that measuring and disclosing financial risks in isolation is insufficient for navigating the complexities of today’s economic landscape.
Peter Paul van de Wijs