The Interconnection of Double Materiality Assessment, Circularity Practices Disclosure and Business Development in the Fast Fashion Industry

Victoria Bogdan, Luminița Rus () and Diana Elisabeta Matica
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Victoria Bogdan: Department of Finance & Accounting, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania
Luminița Rus: Department of Finance & Accounting, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania
Diana Elisabeta Matica: Department of Finance & Accounting, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania

Sustainability, 2025, vol. 17, issue 4, 1-23

Abstract: This qualitative study aimed to explore double materiality reporting practices and their impact and financial materiality relevance as well as the disclosure of circularity practices in connection with financial and ESG reporting in the fast fashion industry. Thematic deductive content analysis (TDCA) was performed in five steps on sustainability reports of iconic fast fashion companies, with the aim of identifying recurring disclosure themes and patterns with the help of the NVivo 14 software. The results reveal that strongly addressed topics in the reporting of double materiality are the sustainable and environmentally friendly use of resources and involvement in the community, while the least addressed is employee wellbeing. A strong positive association between double materiality assessment and resource efficiency was found, proving that the efficient use of resources significantly improves environmental performance. Also, circularity innovation shows high correlations with the assessment of environmental impact materiality and governance, highlighting the role of innovation in enhancing overall sustainability. Integrating circular practices into corporate strategies shows that companies performing very well in circularity are most likely to have higher ESG performance in the future. The integrated approach of double materiality and corporate circularity disclosure analysis is highlighted by the connectivity analysis on material financial and ESG reporting and circularity disclosure. Assessing double materiality information requires professional judgment, and mapping the sustainability aspects related to disclosure requirements requires a unitary methodology and a customized list of impact, risks, and opportunities. The study’s implications aim to improve sustainability information reporting and materiality matrix analysis but can also be extended to circular economy regulations.

Keywords: double materiality; circular economy; financial reporting; ESG; disclosure; fast fashion (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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