ESG Elephant Explained: Double Materiality Assessment

In 2023, we shared our revised ESG Elephant – our tool to make ESG more managable for you.

Since then, we have set out to explain various of the elephant “bites” a bit more in detail.

Now, we’ll dive into Double Materiality Assessments.

What are double materiality assessments?

Double materiality is a cornerstone in today’s (and especially tomorrow’s) sustainability reporting.

The “double” in double materiality means that there are two sides to consider when assessing which matters are material (i.e. relevant, important) to your organization.

One side is the impact your organization has on the environment and society (impact materiality).

The other side is the impact that environmental and social conditions have on your organization’s financial development, performance, and position (financial materiality).

So it’s a two-way street, really.

A sustainability topic meets the criteria for double materiality if it is material from the impact, financial, or both perspectives.

Why do you need to know this?

Well, double materiality assessments will play a huge role in the upcoming Corporate Sustainability Reporting Directive (CSRD).

They will be mandatory (!) and form the foundation for whether a topic should be included in your report or not.

And for good reason.

Double Materiality Assessments can help you focus on the topics that are most relevant for you and your stakeholders, making sure that your efforts are focused where it matters the most.

Who doesn’t want that?

How do you perform a double materiality assessment?

The internet is full of step-by-step guides.

Two central steps are determining relevant sustainability topics for you and your stakeholders as well as being on top of your data.

Based on this, you must identify the risks, opportunities, and impacts.

And remember both the financial and impact materiality perspectives when you do that.

It also helps if all departments work together as you will need a lot of input.

...Easier said than done, we know.

Luckily there’s help to get if you need it.

Click the button below to reach out and hear how we can help you!