Corporate Sustainability Reporting Directive (CSRD) Double Materiality

Under the CSRD, your organization must disclose its impact on the environment and people, and how they could affect your organization going forward. You must also disclose how sustainability-related developments and events create risks and opportunities for your organization.

If you are a new reporter/discloser, we can take you through the entire double materiality process, aligned with the guidelines of the European Sustainability Reporting Standards (ESRS).

Why choose the SGS CSRD double materiality service?

We enable you to:

Understand double materiality in detail
Gain the tools/processes leading up to a double materiality assessment
Conduct a double materiality assessment to home in on the scope of the required reporting
Help determine the correct resources and improve your impact strategy
Determine which topics are material or not, and substantiate choices
Conclude which reporting standards, disclosures and data points should be included
Enhance your journey by building better reports and strategy

Why SGS?

As a sustainability leader for over 30 years, we can support you wherever you are on your CSRD journey. Our experts actively contribute to developing international standards, frameworks, schemes and regulations, including the UN Sustainable Development Goals (SDGs), UN Principles for Responsible Banking (PRB) Assurance and the CSRD.

Our global network of experts determine where you are in the double materiality process and what you need to navigate the requirements.

To discuss your double materiality requirements, contact us today.

You can also register to watch our on-demand webinar, Introduction to CSRD Fundamentals – our introduction to the CSRD features, ESRS, double materiality and how they apply to an organization.

CSRD double materiality FAQs

Double materiality focuses on two main areas and is fundamental to CSRD compliance:

Your organization’s impact on the environment and people (inside-out position)
Sustainability-related developments and events that create risks and opportunities for your organization (outside-in position)

Under the CSRD, your organization must disclose its impact on the above and how they could affect your organization going forward.

A double materiality assessment enables you to identify which sustainability aspects are most material to your business and its stakeholders. This assessment:

Determines the scope of sustainability reporting
Enables efficient allocation of the resources needed for CSRD compliance
Provides essential insights for shaping company strategy

Under double materiality, a sustainability topic can be material for an organization when it meets impact materiality and/or financial materiality criteria, hence the use of “double.”

Impact materiality looks at your organization’s actual or potential material, positive or negative impacts on people and the environment over the short, medium and long term. This includes your organization’s full value chain, not just contracted business relationships.

Financial materiality looks at the impacts on your organization. These impacts generate or may generate risks or opportunities that have or could have a material influence on your organization’s cash flow, development, performance, position, cost of capital or access to finance in the short, medium and long term.

Although the CSRD has guidelines, your organization must determine whether a subject is material or not, and choices must be substantiated either way. Assessing which topics are relevant/material to include in sustainability reports, is a crucial early step toward CSRD compliance.

A double materiality assessment’s outcome will determine which reporting standards, disclosures and data points should be included in your organization’s sustainability reports, and which can arguably be left out.

A double materiality-led report and strategy enhance transparency and decision-making, and ensure that time and resources are focused on the topics that matter most to the organization, stakeholders and society.