ESG Materiality FactorsSM in the Fourth Industrial Revolution
The Fourth Industrial Revolution (4IR) is transforming the global economy at an unprecedented speed. The transparency and abundance of real-time information on companies in the 4IR is accelerating the shift to stakeholder capitalism, making companies accountable for more than profit optimization alone.
Dynamic Materiality is an example of a new technology that is made possible only with the recent advances in artificial intelligence (AI) made during the 4IR. Dynamic Materiality reflects the ability of stakeholders to determine what is financially material for companies, therefore making it harder for corporations to greenwash and fully control their own narratives in this new era.
This paper picks up where Dynamic Materiality: Measuring what Matters left off, describing a comprehensive framework for measuring how ESG materiality varies between companies and industries. In what follows, we explore how the characteristics of ESG materiality also differ across countries and size segments. We call this "Multi-dimensional Dynamic Materiality".