How Does Disclosure on Materiality Assessment and the Sustainable Development Goals Change in Light of COVID-19?

<p>This paper contributes to recent research calls on how challenges posed by the COVID-19 crisis affect corporate disclosure by investigating changes in the materiality and sustainable development goals (SDGs) reporting in the airline industry. As of August 2022, the COVID-19 pandemic has led to more than 585 million confirmed cases and more than 6.4 million reported deaths globally. The air travel has been one of the most impacted sectors globally and in the UK, with total air travel in February 2022 being still down 45.5% below February 2019 levels. This pandemic has brought more attention on the role of corporate social responsibility (Grech, 2020), “with 94% of customers thinking about sustainability more than or as much as before” (easyJet, 2020, 17-19). The COVID-19 crisis has presented companies with opportunities to re-examine their SDGs reporting and materiality assessment approaches. Since 2015, with the introduction of the 17 SDGs by the United Nations, there is an increasing pressure on companies to report on specific topics such as the application and reporting of the SDGs. Airlines are expected to achieve many of the SDGs directly and indirectly. Although the aviation industry makes a positive contribution to the world economy, it also contributes towards negative environmental impacts. Using a sample of eight passenger airlines registered with the Association of UK Airlines, we respond to calls for more research on contextual understanding of SDGs disclosures by investigating whether and how airlines implement SDGs in corporate reports; and assess potential changes in light of COVID-19. Limited research addresses where and how exactly materiality is assessed and disclosed. Using textual and content analysis, we provide in-depth qualitative research on how financial and non-financial materiality is assessed and reported in the airline industry before and during COVID-19.We find that materiality is still prevalently seen by reporters as part of financial statements and auditors’ reports. On a positive side, there is a shift towards higher disclosures of materiality as part of CSR/sustainability sections. The majority of companies have increased their non-financial materiality disclosures. We further reveal that although the level of disclosure on the SDGs is low among the sample companies, airlines that report on the SDGs tend to provide specific information, demonstrating their initiatives, actions, and outcomes. The pandemic has pushed airlines to adapt to disruptions, but their contribution towards the SDGs agenda is limited. The progress is too slow and data on reporting is not comparable.</p>