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.”