The challenge in defining materiality lies in three key areas: scope, stakeholder groups, and time frame. These variables define the boundaries of materiality decisions made by organizations. Depending on which definition is used, the issues and risks included in corporate reporting and decision making may extend to include a range of economic, social, environmental, or governance issues not previously considered. One of the issues that businesses are starting to recognize as a risk to be managed is natural capital, which is the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services. Natural resources, ecosystem services, environmental assets, biodiversity, and ecosystems are all related to natural capital. Accounting for natural capital is crucial for organizations to manage their environmental impacts and sustainable use of natural resources.
