Double Materiality Assessment

Through a Double Materiality Assessment (DMA) you will define the topics where your organisation creates impact, on people and the environment, and where sustainability creates risks and opportunities for your business. DMA is a powerful tool that will give you a comprehensive view of your ESG weaknesses so you can fortify your company’s position. Every sustainability strategy or action plan will start from your company’s material impact areas, risks and opportunities.

Carrying out this assessment in a thorough and comprehensive way from the start of your sustainability journey will assure that you can focus on what matters.

The derived information can be used:

• to comply with the Corporate Sustainability Reporting Directive’s (CSRD) requirements and

• to develop or mature your sustainability strategy.

• to consolidate your company’s future in an increasing physical risks context.

From the start, you can choose between a CSRD compliant or a strategic DMA approach.

The strategic DMA adds extra steps to the compliant approach, to ensure your strategy’s further development or strengthening runs efficiently.

Double materiality

Double materiality is the foundation of modern sustainability reporting and strategy. It provides a structured way to identify which sustainability matters are most relevant for a company, based on two complementary perspectives.

On the one hand, organisations assess their impact on the environment and society. On the other, they evaluate how sustainability issues influence their financial performance.

This dual perspective ensures a holistic view on sustainability. It allows companies to go beyond compliance and understand how sustainability is embedded in their business operations and long-term value creation.

In practice, this means combining impact materiality, how your company affects the environment and society, with financial materiality, which looks at how sustainability issues translate into financial risks and opportunities. Together, these perspectives determine which sustainability matters are considered material for your business.

Single vs. double materiality

Traditionally, companies focused primarily on financial materiality. The emphasis was on identifying risks and opportunities that could influence financial performance.

However, this perspective no longer reflects the expectations of stakeholders or regulators.

Double materiality broadens the scope by explicitly including impact materiality. Organisations assess not only financial effects, but also their actual and potential impacts on people, the environment and the broader external environment.

This shift reflects a growing recognition that both perspectives are closely interconnected. Negative impacts, for example related to climate change or human rights, can evolve into financial risks. At the same time, addressing sustainability challenges can unlock new business opportunities and strengthen long-term resilience.

Double materiality within CSRD reporting

Under the CSRD, companies reporting on sustainability are expected to identify their material sustainability topics, assess impacts, risks and opportunities, and disclose relevant data points aligned with the European Sustainability Reporting Standards (ESRS).

More than 5,000 companies are expected to comply with the corporate sustainability reporting directive, making the double materiality assessment a central element of sustainability reporting.

The sustainability reporting directive CSRD also requires companies to take a broader perspective. This includes evaluating their entire value chain, considering both financial effects and societal impacts, and revisiting their materiality assessment regularly to reflect changes in the business and external environment.

This means that sustainability reporting is no longer a static exercise, but an ongoing process shaped by stakeholder expectations and evolving sustainability challenges.

Conduct a double materiality assessment

A robust double materiality assessment follows a structured and transparent process. While approaches may vary, most companies follow a similar set of steps.

1. Define scope and value chain

We start by mapping the organisation’s business operations and its entire value chain. This includes upstream and downstream activities, from suppliers to end users.

This step ensures that both direct and indirect sustainability impacts are captured.

2. Identify sustainability matters

Next, we identify a long list of sustainability matters, based on:

• Industry standards and ESRS requirements

• Peer analysis and best practices

• Internal expertise

These sustainability topics typically include areas such as climate change, biodiversity, your own workforce, human rights in the value chain and governance.

3. Stakeholder engagement

Stakeholders play a central role in any double materiality assessment.

We engage both internal and external stakeholders to gather qualitative and quantitative stakeholder input. This helps to identify:

• Significant impacts on people and the environment

• Key sustainability risks and opportunities

• Emerging sustainability issues

• Collaboration opportunities

Stakeholder engagement is essential to build credibility and ensure that relevant sustainability matters are not overlooked. Today, 90% of investors consider ESG performance, while 79% of consumers adjust their buying behaviour accordingly.

4. Assess impacts, risks and opportunities

We then assess the identified impacts risks and opportunities using defined criteria.

This includes evaluating:

• Severity, scope and irremediability of impacts

• Likelihood and magnitude of financial risks

• Potential business opportunities

Both impact materiality and financial materiality are analysed in parallel, recognising their interconnection.

5. Scoring and validation

Based on this analysis, we prioritise the most material topics.

We ensure that thresholds and assumptions are clearly documented, creating a transparent and defensible methodology aligned with CSRD compliance.

6. Integration into sustainability reporting

Finally, the results of the double materiality assessment determine:

• Which disclosures are included in sustainability reporting

• Which data points need to be collected

• How sustainability is embedded into risk management and strategy

This ensures alignment between reporting and decision-making.

Using double materiality for strategic advantage

Although the double materiality assessment is a requirement under the Corporate Sustainability Reporting Directive, it can deliver significant strategic value.

A well-executed assessment provides organisations with a deeper understanding of their sustainability risks and opportunities, across areas such as climate change, governance and the broader environment. This insight allows companies to strengthen their risk management approach and anticipate future challenges.

At the same time, it supports stronger stakeholder engagement. By demonstrating a clear and structured understanding of sustainability impacts, organisations can build trust and credibility with investors, customers and other stakeholders.

Beyond risk mitigation, double materiality also helps identify new business opportunities. Sustainability challenges often drive innovation, whether through more sustainable products, improved processes or new business models.

In this way, the double materiality assessment becomes a foundation for a more effective strategy. It helps organisations focus their efforts where they matter most, aligning sustainability with long-term value creation.

CSRD compliant vs. strategic DMA

From the start, organisations can choose how they approach their double materiality assessment.

A CSRD compliant approach focuses on meeting regulatory requirements and ensuring that sustainability reporting aligns with the ESRS. This provides a solid foundation for compliance.

A strategic approach builds on this foundation by further analysing risks and opportunities and linking the outcomes directly to business strategy and decision-making. This allows organisations to move beyond reporting and actively use sustainability insights to strengthen their positioning.

By taking this broader perspective, companies can ensure that their sustainability efforts contribute not only to compliance, but also to long-term impact and business success.

Conclusion

A double materiality assessment is more than a regulatory requirement. It is a structured way to understand how sustainability affects your organisation, and how your organisation affects the world around it.

By combining impact materiality and financial materiality, companies gain a holistic view of their sustainability challenges and opportunities.

This enables better decisions, stronger strategies and more meaningful sustainability reporting.