Double Materiality Assessment under CSRD – 1 Best Guidance on Implementation

Double Materiality Assessment under CSRD – 1 Best Guidance on Implementation

Overview Double Materility Assessment

  • The double materiality assessment involves three steps: (1) understanding context, (2) identifying material topics and their impacts, and (3) assessing materiality, leading to the preparation of a final list for sustainability reporting
  • Reporting needs to cover the assessment process and the outcomes in accordance with ESRS 2 IRO-1, ESRS 2 SBM-3, and ESRS 2 IRO-2
  • CSRD’s materiality assessment aligns GRI’s impact focus, integrates IFRS from ISSB for financial materiality, and considers international due diligence outcomes
  • EFRAG has drafted a set of guidelines for carrying out a double materiality assessment in accordance with the CSRD regulations


GOV = Governance: the governance processes, controls and procedures used to monitor and manage impacts, risks and opportunities;

SBM = Strategy: how the undertaking’s strategy and business model(s) interact with its material impacts, risks and opportunities, including the strategy for addressing them;

IRO = Impact, risk and opportunity management: the process(es) by which impacts, risks and opportunities are identified, assessed and managed through policies and actions; and

MT = Metrics and targets: how the undertaking measures its performance, including progress towards the targets it has set.

Double Materiality: determining both the importance of sustainability issues on the company’s performance (i.e. financial materiality) and the external impacts of the company’s activities on the economy, the environment, and people (i.e. impact materiality).

EFRAG (European Financial Reporting Advisory Group) has provided an Implementation guidance for the materiality assessment.

  • Impact materiality
    Includes impacts connected with the undertaking’s own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships.
  • Financial Impact Materiality
    Requires disclosing all sustainability/ESG issues that are likely to significantly affect your company’s financial health and operational performance. For this, you can rely on non-monetary and monetary quantitative as well as qualitative datasets.

Double Materility Assessment – How to do it?

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