Double materiality The concept of double materiality has significantly influenced business ESG reporting in recent years.
Companies are already required to provide information about ESG topics that affect their activities on purely financial grounds. This is materiality.
Double materiality requires companies to report on how their activities, including supply chains and value streams, affect the environment and society.
The term grew in prominence largely as a result of the European Union’ s Corporate Sustainability Reporting Directive( CSRD), which, from 2024, mandated a double materiality assessment.
“ If you actually look at the double materiality base, it’ s one of the most powerful things that’ s come out of the entire ESG movement,” says Farzad.
“ The whole idea that you can look at what your business does and how it impacts the environment, at the same time and how the outside world impacts our business, is a very powerful narrative.”
Robust data governance is an essential element of credible impact reporting, not just compliance. Without validation, organisations risk basing strategies on unreliable data. Prioritising data integrity and data analysis ensures that ESG outputs accurately reflect the true impact and avoid the‘ garbage in, garbage out’ pitfall.
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