(Double) Materiality Analysis

The Corporate Sustainability Reporting Directive (CSRD) – and the underlying European Sustainability Reporting Standards (ESRS) – mandates large organizations to report on their sustainability performance. Within this framework, organizations are expected to not only include an impact materiality perspectives (inside-out view), but also financial materiality perspectives (outside-in view) in their approach to sustainability matters. Materiality is also a key starting point for the Global Reporting Initiative (GRI) which published a new set of reporting standards in 2021: the Universal Standards. This framework primarily looks at impact materiality, and could be a good starting point for companies not (yet) falling in scope of the CSRD.

A double materiality analysis helps to identify an organization’s most important environmental, social and governance (ESG) topics. The key challenge in driving ESG strategy and implementation lies with the prioritization of ESG topics. Double materiality looks at the significant impacts an organization has on the environment, society and the economy (impact materiality), and the risks and opportunities that society and the environment pose to the organization (financial materiality).

In assisting clients with their preparation for CSRD readiness and the execution of a double materiality assessment, our approach is based on providing pragmatic guidance and hands-on advise. In doing so, we combine our in-depth knowledge of ESG regulations and standards with the knowledge of our impact areas in agriculture, food, health and climate and biodiversity. This combination of deep technical and industry knowledge, experience and a common sense approach has proven to be effective and meaningful for our clients.

In our practical approach, we assist companies performing double materiality analyses in-line with CSRD-requirements by using our in-house developed DMA Tool and Materiality Scan. These are advanced online platforms that collect and validate the insights of internal and external stakeholders, in line with regulatory requirements such as CSRD or international reporting standards such as GRI (taking into account all measures prescribed by the ESRS).