Harmonization and fragmentation in competing ESG materiality regimes and their implications for sustainability reporting

Abstract

The rapid development of ESG reporting practices raises cross-border pressures regarding convergence toward sustainability reporting, in which materiality plays an important role amid competing frameworks of regulation. The difference in perceptions about the financial materiality and double materiality is indicative of the fundamental differences in assumptions underlying the purposes of disclosure and corporate responsibility. This research considers how recent changes in the practice of ESG reporting can reveal whether there has been a process of actual harmonization or fragmentation regarding materiality practices on a global scale. This paper involves a systematic literature review of ESG materiality research conducted between 2020 and 2025 based on the PRISMA approach. After conducting identification, screening, data retrieval, and eligibility assessment, 48 scientific sources indexed on Scopus and Google Scholar were reviewed in the course of this analysis. The selected works were assessed based on descriptive profiling, thematic synthesis, and regulatory cross-comparison. Contemporary ESG reporting reflects partial interoperability shaped by competing materiality regimes, with implications for regulatory coordination, disclosure comparability, compliance complexity, and information asymmetry across multi-jurisdictional reporting environments. This review provides a conceptual-institutional synthesis of competing ESG materiality logics and reconceptualizes materiality as a multi-level disclosure-governance mechanism. It highlights materiality fragmentation as an institutional coordination challenge and identifies emerging economies as an important context for future empirical investigation.