Market Trends: Linking Materiality Assessments To Risk Methodologies

Executive Summary

ESG and sustainability factors have become drivers of material risk, shaping operational resilience, corporate reputation and compliance posture. Rising stakeholder scrutiny over environmental degradation and labour practices is eroding customer trust and tightening access to capital. Meanwhile, climate-related disruptions and social risks – ranging from extreme weather events to supply chain exploitation – are climbing up enterprise risk registers as they increasingly threaten business continuity. The EU Omnibus Package mandates double materiality assessments (DMAs) to assess this two-way exposure: how sustainability factors affect business performance, and how corporate activities impact the environment and society. Though the European Financial Reporting Advisory Group (EFRAG) encourages firms to integrate DMAs into enterprise risk management (ERM) frameworks, practical guidance on integration remains limited. This report outlines the resilience imperative for integrating DMAs into ERM frameworks and highlights the tools available to support materiality assessments.