'A business entity incorporated with an objective to earn profits has certain responsibilities towards its stakeholders. In order to enable these stateholders to make informed decisions certain Disclosures are required.'

A business entity incorporated with an objective to earn profits has certain responsibilities towards its stakeholders. These stakeholders may include investors, employees, suppliers, customers etc. The stakeholders track the developments in the company by means of the disclosures which such incorporated entities are mandated to make under laws applicable to them in order to make informed decisions. The disclosures are of two kinds: financial, or non-financial. The financial disclosures include various documents like the balance sheet, profit and loss account, cash flow statements etc. Whereas the non-financial disclosures include the Boards' Report, Corporate Social Responsibility reporting and various Corporate Sustainability Reporting. CSR or Sustainability Reporting is a means for corporate disclosures, companies need to disclose to its stakeholders, the adverse impact they are making and potential risks to society, economy, and environment by their operations. Not only the adverse impacts, but companies need to disclose the remedial and preventive measures being taken by them in order to address issues arising out of their operations. These disclosures not only help companies to gain competitive advantage but also assist in attracting investments, value creation for share-holders and business stakeholders, attracting and retaining consumers/customers, positive branding, and competitive market advantages. Measuring the adverse impact a business is making on social, economic and environmental spheres through its existence and processes, and also measuring the initiatives being taken by the business in terms of protecting and taking remedial measures is utmost important. Whether information should be prepared and presented, that is, whether it is material in its inclusion is determined by: Identifying relevant matters based on their ability to affect value creation—that is how it increases, decreases, or transforms the capitals caused by the organization's activities. This may be value created for the organization itself or for stakeholders, including society itself. Evaluating the importance of relevant matters in terms of their known or potential effect on value creation. This includes evaluating the magnitude of an occurrence's effect and its likelihood of occurrence. Prioritizing those matters based on their relative importance so as to focus on the most important matters when determining how they should be reported.