Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p138
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 434167–437465

users may relate to:

         1.                 Either:

                 1.                  The material impacts of environmental, social and governance matters on the entity's strategy, business model and performance, which may be referred to as "financial materiality;" or

                 2.                The material impacts of the entity's activities, products and services on the environment, society, or economy, which may be referred to as "impact materiality;" or

         2.                 Both financial materiality and impact materiality, which may be described by the applicable criteria as "double materiality."

Completeness of Criteria (Ref Para. 78(c)(ii), 107)

 1.       In evaluating the completeness of the criteria, including entity-developed criteria to supplement any framework criteria used, the practitioner may consider whether they address:

           * Topics or aspects of topics that could reasonably be expected to affect decisions of intended users, or cannot be as readily measured or evaluated as other topics or aspects of topics.

           * The basis for significant judgements in preparing the sustainability information.

           * The source of significant inherent uncertainties in applying the criteria.

           * The reporting boundary.

Reliability of the Criteria (Ref: Para. 78(c)(iii), 107)

 1.       In evaluating whether the criteria are reliable, the practitioner may consider:

           * Whether the measurement or evaluation of the sustainability matters can be undertaken with the necessary degree of precision to be relevant in the engagement circumstances.

           * Whether the criteria are based on definitions with little or no ambiguity.

           * Whether applying the criteria allows for reasonably consistent measurement or evaluation of the sustainability matters when used in similar circumstances by different parties.

           * The sources of the criteria and the process used to develop them.

Neutrality of the Criteria (Ref: Para. 78(c)(iv), 107)

 1.       In evaluating whether the criteria are neutral, the practitioner may consider whether the criteria:

           * Require a balanced disclosure of both favourable and unfavourable information and are not subject to management bias by excluding any topics or aspects of topics only on the basis that they may reflect poorly on the entity.

           * Do not result in information that is misleading to the intended users in the interpretation of the sustainability information.

           * Are consistent between reporting periods, unless there is a reasonable basis for the change.

           * Address how the information is presented and disclosed, to reduce the opportunity for management bias.

           * Are entity-developed (e.g., may be subject to management bias).

 1.       When the criteria are not consistent with previous reporting periods, the practitioner may consider whether:

           * The entity has a reasonable basis for the change, for example, the entity may be developing and improving its process to prepare the sustainability information and the entity-developed criteria may have been changed to reflect more appropriate or modern approaches, data or methods.

           * The basis for the change