4 minute read 18 Apr 2024
CSRD and double materiality: where to begin

CSRD: How to manage your double materiality assessment

By Emer Keaveny

EY Ireland Sustainability Reporting & Assurance Services Partner

Irish Climate Change and Sustainability Partner. Experienced in working with global and local companies advising on both ESG and financial reporting.

4 minute read 18 Apr 2024

With the EU Corporate Sustainability Reporting Directive (CSRD) now a reality for many organisations, conducting a double materiality assessment is a matter of urgency.

In brief
  • A double materiality assessment is a key first step as your business prepares for CSRD reporting.
  • The assessment provides the foundation for your overall sustainability report, giving insight into the risks and also the opportunities for your business.
  • A well-considered approach to your double materiality assessment now will drive your organisation’s success in the future.

The European Corporate Sustainability Reporting Directive (CSRD) requires companies to report on impacts, risks, and opportunities in terms of the environment, social aspects, and governance (ESG). The CSRD is already a reality for large-listed companies of more than 500 employees. These businesses will need to publish their sustainability reports for years commencing from 1 January 2024, while smaller listed companies and other non-listed companies above a certain size come within the scope of CSRD next year.

For organisations that have not yet begun preparations for CSRD reporting, you must do so now as a matter of urgency. CSRD reports will be subject to limited assurance procedures, so it is important companies commit sufficient, skilled resources and establish robust processes and controls for the preparation of their CSRD report to ensure they are assurance ready.

What is Double Materiality?

Your CSRD implementation journey begins with a double materiality assessment. Double materiality requires companies to report on how their business is impacted by sustainability related factors, including extreme weather events and government policy decisions, so-called outside-in impacts, as well as how their activities impact society and the environment through emissions and employment creation, known as inside-out impacts. These are also respectively known as financial materiality and impact materiality.

The double materiality assessment lays the foundation for your organisation’s overall sustainability report. Its purpose is to establish a list of material sustainability topics that will be covered in the sustainability report, and which should form the basis of the company's sustainability strategy. It should be noted that not all impacts are negative, and the assessment covers opportunities as well as risks.

6 things to consider when beginning your double materiality assessment

1. Identify your sustainability topics 

To identify your organisation’s sustainability topics an analysis of potential impacts, risks, and opportunities must be conducted. You can use various sources for this including: stakeholders survey, reviews of media articles, sector data, and academic studies to name a few. This will produce a long list of impacts, risks and opportunities that can be assessed for their importance or materiality. Once validated and whittled down to a compact list, data collection for the material topics for the CSRD report can then begin.

2. Setting your process up for success

The double materiality assessment process is not one and done. While CSRD reporting will need to be carried out every year, double materiality will also need to be assessed regularly - usually every two to three years. This will ensure your organisation is taking into account changing circumstances that might impact your process and its success.

This does not mean your organisation has to start from scratch with a new double materiality assessment, so taking the time now to consider and design your methodology, processes and controls means it can be repeated and updated as needed in the coming years. It is also important that the methodology, processes and controls have been approved at the appropriate levels in the organisation’s governance structure. In addition, for assurance providers who will need to consider how you arrived at your material topics, it will be clear and understandable.

3. Resourcing your process

Companies that have already engaged in voluntary sustainability reporting in accordance with standards like the Global Reporting Initiative (GRI) and the Science Based Targets Initiative (SBTI) may understand the scale of the task, however for many businesses this kind of sustainability reporting is new and they will not have the skills or in-house resources to support it. In this case, buy-in and ownership from senior leadership and others in the organisation is crucial while engaging external assistance to help drive the initial assessment process will be of real benefit.

4. Choose your stakeholders carefully

The aim of the double materiality assessment is to gain a full, 360-degree view of what is material for your company. This means focusing on internal stakeholders such as employees, board members, and shareholders but equally external parties like customers, suppliers, local residents, community groups, government bodies, and NGOs. By surveying a wide range of relevant groups you will be able to compile a comprehensive list of impacts, risks, and opportunities.

5. Record and communicate

Every aspect of your double materiality process should be documented. Steps taken, the context in which the company operates, stakeholders interviewed, considerations taken into account, and decisions made and by whom, should all be recorded. This will help the process run smoothly and will provide the necessary documentary evidence required during your assurance process. In addition, regular communication of your progress will maintain buy-in from all internal and external parties involved in the process.

6. Take a positive view of the process

There are considerable benefits to be realised from a double materiality process conducted well. It can support and inform the organisation’s strategy and risk management and enable companies to take advantage of the opportunities that will arise from sustainability impacts over the short, medium and long term. This will enhance your organisation’s reputation and make you more attractive to investors.


The double materiality assessment is not only the first step in your CSRD reporting process but, when managed correctly, a real opportunity to understand your future sustainability goals. Identifying your material impacts, risks, and opportunities now means you can prioritise the key sustainability topics you need to address in the coming years. This will not only support CSRD reporting but help your organisation become more sustainable, innovative, and profitable.

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About this article

By Emer Keaveny

EY Ireland Sustainability Reporting & Assurance Services Partner

Irish Climate Change and Sustainability Partner. Experienced in working with global and local companies advising on both ESG and financial reporting.