The assessment involves two key perspectives:

1. Impact materiality - Evaluating the actual and potential positive or negative impacts of the company's activities across its entire value chain on people and the environment in the short, medium and long term.

2. Financial materiality - Assessing how sustainability matters can trigger material financial effects on the company's development, cash flows, financial position and performance in the short, medium and long term

Common Areas of Double Materiality

Some major areas often considered in double materiality assessments include:

1. Climate change risks and opportunities

2. Human rights and labor practices

3. Biodiversity and ecosystem impacts

4. Resource use and circular economy

5. Product safety and quality

Common frameworks and standards for double materiality include

• Global Reporting Initiative (GRI) Standards
• EU's Corporate Sustainability Reporting Directive (CSRD)
• Task Force on Climate-Related Financial Disclosures (TCFD)

Importance of Double Materiality Assessments

Conducting double materiality assessments enables companies to:

1. Identify and prioritize the most crucial sustainability issues

2. Inform strategic decision-making and resource allocation

3. Enhance risk management and opportunity identification

4. Improve transparency and stakeholder communication

5. Align with evolving regulatory requirements and investor expectations

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