The paper "Corporate Sustainability: First Evidence on Materiality" by Mozaffar Khan, George Serafeim, and Aaron Yoon explores the value implications of sustainability investments, distinguishing between material and immaterial sustainability issues. The authors develop a novel dataset by mapping industry-specific guidance on materiality from the Sustainability Accounting Standards Board (SASB) to firm-specific performance data. They find that firms with strong performance on material sustainability issues significantly outperform those with poor performance, suggesting that such investments enhance shareholder value. In contrast, firms with good performance on immaterial issues do not underperform those with poor performance, indicating that these investments are at least not value-destroying. Additionally, firms with high materiality scores and low immateriality scores perform the best, suggesting that a combination of both types of investments is optimal. The results have implications for firms making sustainability investment decisions and asset managers integrating sustainability factors into their capital allocation processes.The paper "Corporate Sustainability: First Evidence on Materiality" by Mozaffar Khan, George Serafeim, and Aaron Yoon explores the value implications of sustainability investments, distinguishing between material and immaterial sustainability issues. The authors develop a novel dataset by mapping industry-specific guidance on materiality from the Sustainability Accounting Standards Board (SASB) to firm-specific performance data. They find that firms with strong performance on material sustainability issues significantly outperform those with poor performance, suggesting that such investments enhance shareholder value. In contrast, firms with good performance on immaterial issues do not underperform those with poor performance, indicating that these investments are at least not value-destroying. Additionally, firms with high materiality scores and low immateriality scores perform the best, suggesting that a combination of both types of investments is optimal. The results have implications for firms making sustainability investment decisions and asset managers integrating sustainability factors into their capital allocation processes.