Double Materiality Assessment

The European Union's Corporate Sustainability Reporting Directive, or CSRD, requires the adoption of double materiality. Through a double materiality assessment, a company is able to identify which sustainability matters are "material" (i.e. significant) for its organization. This analysis allows to understand both the impact of the company on the environment and society (impact materiality), and how environmental and social factors influence the financial performance of the company itself (financial materiality).

A double materiality assessment conducted according to The ESRS (European Sustainability Reporting Standards) provides, in particular, for the identification and assessment of IROs (Impacts, Risks and Opportunities):

• Impacts: effects of business activities on the environment, society and economy, both positive and negative.
• Risks: ESG-related threats that may jeopardize the company's financial performance (e.g. climate change or new regulations).
• Opportunities: opportunities for growth and development that more sustainable policies, choices and activities can offer the company.

The double materiality assessment is essential because it offers a complete vision for both the management of corporate risk and for the improvement of stakeholder relations. In fact, identifying the key areas where to invest in sustainable practices brings benefits both in terms of impact and financial value and helps to strengthen stakeholder trust.

Our consultants help companies conduct doble materiality assessments with the aim of identifying and managing company-relevant IROs, improving stakeholder relationships and demonstrating commitment to sustainability.