Sustainability aspects from two perspectives
Double Materiality
A Double Materiality Analysis is a strategic tool that companies can use to narrow down which sustainability issues are relevant to them. It helps companies to identify the material impacts, risks and opportunities (IROs) that are relevant to their own business activities. It offers a comprehensive approach, as the double materiality analysis always considers two perspectives:
- Financial materiality considers the opportunities and risks of sustainability issues for the company’s financial position and the future viability of its business model.
- With the help of impact materiality, companies determine the actual and potential positive and negative effects of their business activities on various sustainability issues.
The Double Materiality Analysis helps to identify sustainability risks at an early stage and manage them proactively. It positions companies as pioneers in an increasingly sustainability-oriented economy and supports the development of a sustainable corporate strategy. The Double Materiality Analysis is therefore a central building block for sustainable and strategically sound corporate management. It enables companies to continuously improve their sustainability performance, minimize risks and exploit opportunities.
- Blogpost: Double materiality analysis – What are IROs and how do you define them?
- Blogpost: Double materiality analysis: your top 10 to-dos
- Blogpost: Risks and opportunities in the focus of ESRS – More than just double materiality
- CSRD Information & Solutions
- Opportunity and risk analysis
- Case Study: Herrenknecht AG
The double materiality analysis as a basic module of CSRD compliance
One of the significant innovations of the Corporate Sustainability Reporting Directive (CSRD) is the concept of Double Materiality, which obliges companies to disclose detailed non-financial information in the areas of environment, social affairs and governance in their management reports. The double materiality analysis is a central element of sustainability reporting as part of the CSRD and is mandatory for all companies subject to the CSRD. A core aspect of this analysis is the so-called IROs – Impacts, Risks and Opportunities. These three components form the basis for a comprehensive Double Materiality Analysis in accordance with the European Sustainability Reporting Standards (ESRS). These IROs must be evaluated using the ESRS parameters and the data points to be reported derived from them. Further information on the identification and assessment of IROs can be found here.
The Double Materiality Analysis is followed by the concrete elaboration of the content for the CSRD report.
The advantages of a Double Materiality Analysis apart from the CSRD reporting obligation
The Double Materiality Analysis not only forms the basis of the CSRD reporting obligation, but also serves companies as a tool for sustainable and strategic corporate management that creates competitive advantages.
This is because the analysis not only helps companies to identify the sustainability issues that are material to them, but also offers many more strategic advantages that your company can use to its advantage. The Double Materiality Analysis is not only a response to regulatory requirements such as the CSRD, but also serves as an important approach for successful positioning in the market environment, promoting innovation and effectively managing risks.
Effective risk management is essential for every company. The double materiality analysis helps to identify ESG risks at an early stage and manage them in a targeted manner – before they have a negative impact.
The analysis shows which sustainability issues are particularly relevant for companies and helps to integrate these issues into the corporate strategy in a targeted manner.
Through transparent communication on relevant sustainability issues and a better understanding of stakeholder expectations – made possible by the double materiality analysis – companies can strengthen trust, loyalty and credibility in a targeted manner and visibly improve their position in the market. The analysis can also serve as a prelude or part of a regular stakeholder dialog.
The analysis creates a valuable database for a transparent supply chain. It makes it easier to implement ESG requirements internally and externally in an efficient and comprehensible manner.
Sustainability is a driver of innovation. With a well-founded materiality analysis, company-specific potential for new technologies, products or business models can be identified at an early stage, which can secure the long-term competitiveness of a company.
A clear, credible sustainability profile creates competitive advantages – whether in customer acquisition, recruiting or towards investors.
Our Services
Laying the foundation together
Your Advantages
Why DFGE when it comes to double materiality analysis?
- Expertise from a large number of successfully completed ESRS-compliant double materiality analyses with clients from various industries.
- Structured and proven procedure to identify the focus topics for you step-by-step and as efficiently as possible.
- With our knowledge of the complexity of the interrelationships and building on the double materiality analysis, we accompany you on the path to CSRD compliance and laying the foundation for a resilient company.
