Double materiality assessment — or simply “DMA,” as it’s often called — is a hot topic in sustainability communications right now. But double materiality isn’t just another regulatory requirement; it’s also a valuable tool for building a sustainable business.
Double materiality assessment encourages organisations to look at two key perspectives: the company’s impacts on society and the impact of sustainability issues on the company itself.
Double Materiality Assessment – Where to Start?
Understanding and implementing a double materiality assessment is a prerequisite for companies reporting under the CSRD directive. The assessment helps identify the most relevant themes for sustainability reporting and ensures compliance with the guidelines set by EFRAG (European Financial Reporting Advisory Group).
While every company’s journey in sustainability is unique, some double materiality assessment best practices make the process smoother and more effective.
1. Start Early
Double materiality assessment takes time. It’s a thorough process involving stakeholder engagement, data collection, and impact evaluations. Leaving it to the last-minute means rushing to meet deadlines. Begin at least six months before your report is due.
2. Involve Internal Teams
To reflect the full scope of your business impacts, involve different departments from the outset. Beyond the sustainability team, finance, business units, HR, compliance, management, and the board all bring valuable perspectives.
3. Stakeholder Views Are Key
Materiality can’t be assessed in isolation. Stakeholder insights help identify the issues your company should focus on in its sustainability work. Make sure to regularly engage employees, customers, suppliers, and local communities. Their input often reveals blind spots you might have missed. Include at least five stakeholder groups through interviews, surveys, or research.
4. Understand Industry-Specific Requirements
Not all companies face the same sustainability challenges. A tech company’s environmental footprint differs from that of a logistics firm. It’s essential to consider your industry’s typical risks and opportunities, alongside the sustainability issues most relevant to your company.
5. Be Consistent with Scoring Methods
There are various ways to score materiality — numerical scales, weighted ranking systems, and more. Whichever method you choose, apply it consistently. Scoring should be transparent and easy to follow for internal teams and external auditors alike.
6. Document Everything from the Start
Proper documentation is crucial. Don’t leave this until the end. Take detailed notes at every stage — how decisions were made, which criteria were used, and who was consulted.
How you communicate the DMA process is just as important as the process itself. ESRS standards require a detailed description of the double materiality assessment. Ensure your explanation is well-written, clear, and highlights key decisions and findings without jargon.
7. Focus on Broad Risks and Opportunities
The ultimate goal of double materiality assessment is to help companies understand their place in the wider sustainability landscape. It’s not just about immediate risks but also long-term opportunities. A proactive approach allows companies to lead rather than simply react.
A concrete outcome of the assessment is creating an IRO table (Impact, Risks, Opportunities). This document outlines your company’s main sustainability impacts, risks, and opportunities. While it may not be publicly shared, it’s an invaluable tool for internal sustainability work. It can also be shown to report verifiers or partners to ensure aligned action.
Double Materiality Assessments Should be Reviewed Regularly
Conducting a double materiality assessment offers a deep understanding of how sustainability challenges affect your business – and how your business affects the world.
Material issues evolve over time. An assessment done a year ago may already be outdated today. Review your analysis regularly and update it based on new risks, opportunities, and stakeholder feedback.
From our experience, double materiality assessment best practices mean starting early, engaging the right teams, and thorough documentation. Along the way, you’ll gain a valuable roadmap for your future sustainability work.
Is double materiality assessment relevant for your organisation? Contact us to discuss your situation in more detail!
