Strategic Focus: Emerging Approaches To Conducting Double Materiality Assessments
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Executive Summary
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.Undertaking a double materiality assessment is the first step in the CSRD process
Initiating double materiality assessments through existing risk management processes
Market solutions have emerged to support the double materiality assessment process
Figure 2. Top-down vs bottom-up materiality assessment
Figure 3. Stakeholder engagement is a continuous process
About the Authors
Luke Gowland
Senior Analyst
Luke is a Senior Analyst at Verdantix, specializing in ESG and sustainability reporting software and financial ESG. He advises both technology buyers and software vendor and s...
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Guy Lewis
Industry Analyst
Guy is an Industry Analyst in the Verdantix ESG & Sustainability practice. He currently leads research on circular economy software and services and supports research acro...
Kim Knickle
Research Director
Kim Knickle is a Research Director at Verdantix, bringing more than two decades of analyst experience to the evolving world of sustainability. Her current research spans ESG a...
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