The double materiality assessment is a key element of reporting in accordance with the European Sustainability Reporting Standards (ESRS). It forms the basis for selecting sustainability issues that should be included in a sustainability report. Its purpose is to identify issues that are relevant both from the perspective of the organization's impact on the environment and the impact of external factors on the organization.
The essence of double materiality
Double materiality is based on two complementary perspectives:
It refers to the actual or potential, positive or negative effects of an organization’s activities on the environment, society and human rights. The analysis covers the entire value chain – from suppliers to end users of products and services.
Addresses the impact of environmental, social and corporate governance issues on an organization’s financial position. This includes, among other things, the impact on revenues, costs, access to capital, enterprise value, and risks and opportunities related to climate and social transformation.
Purpose of conducting double materiality assessment
The purpose of the double materiality assessment is to ensure that the sustainability report focuses on the most relevant topics from the perspective of the organization and its stakeholders. This process enables:
- identification of key impacts, risks and opportunities (IROs – Impacts, Risks, Opportunities),
- a better understanding of the interactions between the company’s operations and the environment,
- more effective risk management and strategic decision-making,
- building trust among investors, customers and other stakeholders.
Conclusions of the double relevance assessment
A double materiality assessment is the starting point for conscious management of sustainability topics within an organization. It is not only a regulatory requirement, but also a practical tool that enables a company to set priorities in the area of social and environmental responsibility and prepare for future challenges. It makes it possible to accurately identify which issues require monitoring and reporting, as well as where to focus activities and resources. As a result, sustainability can be effectively integrated into the business model, enhancing a company’s resilience, innovation and long-term value.