Stakeholder Diversity vs. Stakeholder General View: a theoretical gap in sustainability materiality conception

Over the last decade, since GRI (G3) launched its definition on materiality, the materiality concept has been widely applied in corporate sustainability reports and management. The definition of \'materiality\' in sustainability context is based on extending the content of definition of \'financial materiality\': financial materiality is about the significance of financial information towards investors; whilst materiality in sustainability context targets on issues significant to a wider extent of stakeholders including not only investors, but also communities, employees, customers, governments, non-government organizations, and so on. Current definitions on sustainability materiality are to take all stakeholders as a whole, towards whom an issue is material (see GRI G3, AA 1000, Zadek & Merme 2003). That is, the materiality of sustainability issues is based on the general views of stakeholders: the issue is material because stakeholders generally accept it as material. However, such materiality conception ignores or oversights the diversity in stakeholders, a basic assumption in stakeholder theory. The diversity reflects as their different relationships to an organization (Burton & Dunn 1996), and lies in the different or conflicting values, expectations and interests among stakeholders (e.g. Ogden & Watson 1999; Mitchell 2001). From this perspective, a theoretical gap exists in prior materiality models and research, which do not address \'stakeholder diversity\'. This study argues that a new way on defining materiality is to fix this gap. It further proposes a \'hierarchy of materiality\' model, which may put insights for future research.