What are the two primary factors that influence the materiality of reporting topics?

The correct answer identifies the two primary factors that influence the materiality of reporting topics as the significance of impacts and stakeholder assessments.

Materiality in the context of the Global Reporting Initiative (GRI) focuses on what is most relevant to an organization's stakeholders and its potential environmental, economic, and social impacts. Significance of impacts considers how the organization's activities affect the economy, the environment, and society, emphasizing the importance of understanding which aspects are most critical to report on. This includes direct impacts, such as emissions and resource usage, as well as indirect impacts, such as social welfare and community engagement.

Stakeholder assessments refer to the process of identifying and prioritizing the interests and needs of stakeholders, such as, but not limited to, employees, investors, customers, and communities. It is essential that organizations engage with stakeholders to understand their expectations and concerns. This engagement shapes which topics are deemed material and thus should be reported on, ensuring that the organization addresses the issues that matter most to those with a vested interest in its operations.

The combination of assessing the significance of impacts and performing stakeholder assessments provides a comprehensive framework for determining material topics that will resonate with stakeholders and reflect the organization’s sustainability commitments and performance.