CONTENTS
Double materiality is a concept in sustainability reporting that requires companies to assess not only how ESG issues affect their business (financial materiality) but also how their business affects society and the environment (impact materiality).
Example in context
You’re working with a European infrastructure operator preparing a CSRD-compliant report. They must assess physical risks like heat stress or coastal flooding not just based on their financial exposure, but also how their operations could worsen those risks in the surrounding community. That’s double materiality in practice.
Why it matters
Double materiality is a key pillar of CSRD. It shifts reporting from being investor-focused to covering broader impacts aligning with EU climate goals. For consultants and ESG teams, it means collecting and analysing data from both perspectives. Platforms like EarthScan can help quantify physical risk on both sides of the equation.
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