Run a double materiality assessment (DMA)

What is this action about?

Double Materiality forms an integral concept within the realm of sustainability reporting, significantly relevant to the Corporate Sustainability Reporting Directive (CSRD). Understanding it is instrumental to account for your businesses' responsibilities and impacts on society and the environment.

Corporate Sustainability Reporting Directive (CSRD)

The CSRD is a regulatory framework that aims to significantly enhance the quality of sustainability disclosures emanating from corporate entities. The principal objective is to provide clarity, address ambiguity, and ensure businesses accurately reflect their sustainability practices in their reporting.

The Concept of Double Materiality Assessment

Integral to the CSRD is the notion of a Double Materiality Assessment. This dual-layer evaluation takes into account two unique prongs of materiality: impact materiality and financial materiality. These differing perspectives provide a holistic view that incorporates both the financial and non-financial effects of business activities.

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Impact Materiality

Impact materiality refers to the extent of a business's effects on environmental, societal, and economic conditions. It measures how the actions and operations of a business influence these aspects, and how the business is potentially contributing to or mitigating various social and environmental challenges.

Financial Materiality

Financial materiality, on the other hand, pertains to the potential influence of environmental, societal, and economic conditions on the financial health or performance of a business. It's about understanding how changes in these conditions can affect the financial standing of a business, both in the immediate and longer-term financial future.

The Intersection of Impact and Financial Materiality

The interplay between impact and financial materiality forms the bedrock of the double materiality criterion. A sustainability matter is said to meet this criterion if it is material from an impact perspective, a financial perspective, or ideally, both. This approach allows for a more comprehensive outlook, bridging the gap between sustainability obligations and financial imperatives, thus encouraging a more sustainable and financially mindful corporate ecosystem.

Find out which topics are material for your business