Double Materiality Assessment: A Step-by-Step Walkthrough

A double materiality assessment scores every potential sustainability topic on two dimensions, impact materiality (how much the company affects people or environment) and financial materiality (how much the topic affects company value), with internal experts, external experts, and stakeholders all contributing to the scoring, rather than a single team scoring in isolation. Only topics material on at least one dimension become part of the reporting scope.

Why two dimensions instead of one

A topic can be highly material to a company's financial performance while having limited direct impact on people or environment, or the reverse, significant impact with limited direct financial consequence. Scoring only one dimension would miss genuinely material topics that only show up on the other.

Who actually needs to be involved in the scoring

Internal experts bring operational knowledge of where the business actually has impact; external experts bring an independent, less self-interested view; stakeholders, customers, communities, employees, bring perspective the company's own staff structurally cannot provide about how the company affects them.

What happens after topics are scored

Topics scoring material on either dimension move into the reporting scope, which then determines which ESRS disclosure requirements actually apply, the materiality assessment is what turns a generic standard into a specific, company-tailored reporting obligation.

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