The Determinants of Materiality Assessment Disclosures in the Sustainability Statements of Iberian‐Listed Companies

ABSTRACT Effective January 1, 2024, the Corporate Sustainability Reporting Directive (CSRD) mandates that large corporations disclose sustainability data using the European Sustainability Reporting Standards (ESRS). This study investigates the materiality assessment disclosure (MAD) in Portuguese and Spanish corporations, focusing on its role as a foundation for meaningful sustainability reporting. This study analyzed annual reports from 45 major businesses (2018–2022) and employed content analysis and panel data methodologies to score an index that quantifies MAD levels. The results revealed an average MAD score, highlighting significant gaps in the materiality assessment processes and outcomes. Industry and board size were identified as influential variables in determining MAD levels. These findings underscore the lack of comprehensive consideration of the societal and environmental impacts. Enhanced transparency, accountability, and adherence to ESRS are urgently required to improve the quality and relevance of sustainability reporting.