Double Materiality

Double materiality is the assessment framework used under the CSRD to determine which sustainability topics a company must report on. It considers two dimensions simultaneously:

Impact materiality evaluates how a company’s activities affect people and the environment , including both actual and potential impacts across the value chain.

Financial materiality evaluates how sustainability issues create risks or opportunities that could affect the company’s financial position, performance, or cash flows.

A topic is considered material , and must be reported on , if it meets the threshold on either dimension. This bidirectional approach ensures that CSRD reports capture both outward impact and inward risk, giving stakeholders a complete picture of a company’s sustainability profile.

The double materiality assessment typically involves stakeholder engagement, industry benchmarking, and structured scoring across all ESRS topics (E1–E5, S1–S4, G1).