The European Union Corporate Sustainability Reporting Directive (“CSRD”) requires organisations in scope to conduct a double materiality assessment to identify material topics across Environmental (‘E’), Social (‘S’) and Governance (‘G’) areas.
This then determines applicable disclosures they are required to make within their sustainability statements prepared under the European Sustainability Reporting Standards or “ESRS”.
Traditional materiality for financial reporting purposes looks at financial impacts and measures. The CSRD introduces the concept of double materiality in the context of sustainability, which adds non-financial measures of impact to people and the environment to be included as part of a materiality assessment.
Conducting a double materiality assessment for the first time can be challenging in particular for organisations with a low level of maturity with respect to their sustainability journey or for those who have not previously compiled sustainability report(s) or information.
As a first step, an initial “stock-take” or readiness review should be completed to understand the context in which the organisation operates with a sustainability lens incorporating ESG topics and its wider governance, risk and strategy frameworks.
We helps organisations to navigate through the requirements of CSRD and disclosures under ESRS from initial stock-take to assurance readiness. Download now to find out more.
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