ABOUT THIS EPISODE
What does double materiality actually mean, and how do companies decide what they should report on?
In Episode 13 of We Explain by YouSustain, we take a closer look at the Double Materiality Analysis (DMA), one of the central concepts behind sustainability reporting under the CSRD and ESRS.
Double materiality means looking at sustainability from two directions. The first is impact materiality: how a company affects people, society and the environment. The second is financial materiality: how sustainability issues can create risks and opportunities for the company itself.
In the episode, we explain how these two perspectives come together and how companies use a DMA to decide which sustainability topics are actually material enough to report on.
We discuss how companies assess topics such as climate change, biodiversity, water, pollution and greenhouse gas emissions, as well as how impacts, risks and opportunities are evaluated and how materiality thresholds can be used.
We also look at the practical side of the process: what happens when a topic is not material, what companies need to be able to justify to auditors, how a DMA can work for smaller companies and voluntary reporting, and why the complexity of a company’s value chain can significantly affect the assessment.
Along the way, we connect double materiality with other areas of sustainability work, including Scope 3 emissions, climate risk, nature risk and ESG reporting.
The aim of a Double Materiality Analysis is not to make companies report on everything. It is to help them understand what is genuinely relevant, both in terms of their impact on the world and the sustainability issues that could affect the business.
