Impact materiality
ESG & GovernanceAn issue is impact-material if the company has a significant effect on people or the environment through it.
Impact materiality looks "inside-out": it asks how the company affects the world, whether or not that effect costs the company money today. It is the basis of the GRI Standards. A mining company's effect on local water sources is impact-material even if no fine has been imposed. Impact issues often become financially material later, through regulation, lawsuits or customer pressure, which is why investors should not ignore them.
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