Blog Post | April 25th 2023 | Lorenzo Roveda


How to perform a Double Materiality Assessment with CSRD

Performing a Double Materiality Assessment can seem like a complex and overwhelming endeavor, but with the right approach and guidance, it becomes a manageable and rewarding process. If you're new to the topic, we recommend starting with our previous article that provides an introduction to Double Materiality and its relation to the CSRD.

In this comprehensive guide, we'll walk you through each step of the Double Materiality Assessment, from preparation to execution, and share recommendations to help you navigate this crucial aspect of sustainability reporting.

Preparation for the Double Materiality Assessment

  1. Go through the CSRD topics list: CSRD defined a list of Sustainability Matters that companies should use for their materiality assessment: use it to make sure you are not missing anything in your assessment. Download the CSRD Topics list.
  2. Identify the material topics for your industry: Depending on your industry, there are some topics that are typically material for your company (e.g. child labor for the mining industry, energy for the manufacturing industry). Tip: Check the topics identified in your competitors’ sustainability strategies.

    N.B. Material = relevant/of importance

  3. Identify key business stakeholders: Identify the stakeholders affected by your organization's activities. Tip: Divide them into internal (own workforce, investors) and external stakeholders (complete value chain: suppliers, customers, local communities) as this will be helpful for reporting.

Conduct a Double Materiality Assessment

  1. Determine impacts Identify the sustainability matters that are connected to actual and potential impacts that your company has or could have on the environment and people as a result of your activities or business relationships. Tips: Impacts can be negative but also positive! You can have multiple impacts per material topic. You should identify both direct and indirect impacts (occurred throughout your value chain).
  2. Assess the severity and likelihood of the impacts: Since impacts can be actual or potential, measure the severity of both and the likelihood of potential impacts. Define a minimum severity and likelihood threshold to consider an impact material.



    The scale, scope, and irremediability of each impact on the environment or people. 

    The probability that the potential impact happens.

  3. Determine financial risks and opportunities: Determine the sustainability matters that are connected to financial risks and opportunities which trigger or may trigger significant financial effects on your company. To do so:
    1. Identify the existence of dependencies from natural and social resources
    2. Classify them as sources of risks or opportunities
    3. Example: If a company’s business model depends on a natural resource – for example, water – it is likely to be affected by changes in the quality, availability, and pricing of that resource. For this company “resource inflows” is material from a financial perspective as it is connected to a risk.
  4. Assess the likelihood and size of risks and opportunities: Sustainability-related financial risks or opportunities are measured as a combination of the likelihood of occurrence and the size of potential financial effects. For each risk or opportunity identified, assess the likelihood and size, and define a minimum threshold for considering a risk or opportunity material.
  5. Engage with your stakeholders: Make sure you always interact with your stakeholders when determining the impacts, risks, and opportunities (steps 1 to 4). Tip: You can evaluate inputs on impact and financial materiality by conducting stakeholder questionnaires. Sign up for our stakeholder questionnaire guide release.
  6. List your material sustainability matters: The outcome of these 5 steps is a list of your impacts, risks, and opportunities. Make sure that they are all connected to one or more sustainability matters from the CSRD list, and prioritize them (based on steps 2 and 4). The list of your material sustainability matters is your “double materiality” assessment and your starting point for setting your sustainability strategy.
Double Materiality Guide Scheme

From Double Materiality to Sustainability Strategy

Use the result of the Assessment to structure your sustainability strategy. Make sure to systematically cross-check how all identified material topics for your company are being addressed in your strategy. The ultimate goal of the double-materiality approach is to avoid that a company can be considered "greatly sustainable" because it performs well on a topic while it is not addressing another material topic. e.g. a coffee producer with excellent employee benefits but poor anti-child labour practices. Check our article - How to set up a sustainable strategy from scratch?

Materiality assessment is one of the key instruments to avoid greenwashing in sustainability disclosure so make sure to document your process and be ready to argue and explain every single assumption you have based your results on.

ROSE's Solution for Double Materiality

ROSE supports companies all the way from Double Materiality to Sustainability Strategy. The ROSE platform supports companies in identifying their material topics, in performing a Double Materiality Assessment, and in creating a sustainability strategy with targets, actions, goals, and policies. All in one place! We have been working with more than 40 companies and we’d be happy to discuss how we can help you tackle the increasing complexity of sustainability requirements and have some fun in the process! 


Align your sustainability strategy with the CSRD.

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