From checklist to principle-based reporting: Examining the materiality of sustainability in the banking sector

This thesis examines how sustainability materiality can be implemented in the banking sector under the European CSRD/ESRS regime and how the ongoing Omnibus-era shift reinforces a move from checklist-driven compliance to principle-based reporting. Banks face a structurally distinctive materiality problem. Their most significant sustainability impacts and financial effects often arise indirectly through lending and investment portfolios rather than through their own operations. Methodologically, the study applies an exploratory qualitative single-case design. It is combining document analysis of the CSRD/ESRS framework and Omnibus-era drafts with semi-structured expert interviews at Landesbank Baden-Württemberg. Findings show that early ESRS implementation incentives frequently led to data point catalogues and extensive completeness controls, driven by time pressure and assurance expectations. However, a bank-relevant materiality process requires translating generic sustainability matters into portfolio IROs via sector mappings, exposure heatmaps, and risk pathway logic aligned with prudential risk management. Building on these insights, the thesis proposes a principle-based operating model centred on decision logs, scoping sheets, evidence checklists, and traceability mechanisms to balance efficiency, auditability, and transparency while avoiding information overload and boilerplate reporting.