Strategic Focus: Emerging Approaches To Conducting Double Materiality Assessments

Conducting a double materiality assessment is fundamental for compliance with the EU’s Corporate Sustainability Reporting Directive (CSRD). The European Financial Reporting Advisory Group (EFRAG), which develops the reporting standards for the CSRD, defines double materiality as “the union of impact and financial materiality – how sustainability matters affect the company’s position and how the entity itself impacts the environment and society at large”. Materiality assessments are gaining traction amongst firms, with preliminary data from the Verdantix 2024 global corporate survey finding that 69% of organizations use double materiality assessments as a tool to improve ESG and sustainability performance. This report informs organizations about key considerations when undertaking a double materiality assessment and provides insights into how to operationalize an assessment from a people, process and technology perspective.