As a sustainability consultancy, Positive Planet supports businesses to navigate the complex world of ESG reporting and strategy. One of the most important steps on this journey is understanding and applying double materiality.
What is Double Materiality?
In the simplest terms, double materiality recognises that sustainability is not a one-way street. Traditionally, materiality in business referred to financial risk and relevance — how an issue might affect a company’s performance or value. Double materiality expands that view, requiring companies to consider:
- Impact Materiality – How your organisation’s activities affect people, communities, and the environment.
- Financial Materiality – How sustainability issues (such as climate change, regulation, and resource scarcity) affect your organisation’s financial performance.
This concept is central to new sustainability disclosure reporting standards such as the European Sustainability Reporting Standards (ESRS) as prescribed by the EU’s Corporate Sustainability Reporting Directive (CSRD).
Why is Double Materiality Important?
Many businesses are now required to assess and report on double materiality as part of their ESG disclosures. Even if it’s not yet mandatory for you, there are strong reasons to act now:
- Regulatory Compliance – For companies in scope under the CSRD, double materiality is a legal requirement.
- Stakeholder Trust – Investors, customers, and employees expect transparency.
- Risk Management – Identifying risks early helps protect your business from financial and reputational harm.
- Strategic Opportunity – A well-executed materiality assessment can highlight areas for innovation and competitive advantage.
What is a Materiality Assessment?
A materiality assessment is the structured process for identifying, evaluating, and prioritising sustainability topics that are most relevant to your business and stakeholders. At Positive Planet, our materiality assessment process includes:
- Stakeholder Mapping & Engagement – Understanding the perspectives of internal and external stakeholders.
- Data Gathering – Reviewing business activities, ESG data, industry benchmarks, and regulatory requirements.
- Double Materiality Analysis – Assessing both impact and financial materiality.
- Prioritisation & Validation – Ranking topics by importance and validating results with leadership.
- Integration into Strategy – Embedding findings into ESG strategy, reporting, and target-setting.
Double Materiality in Practice
Example 1: A manufacturing company may find through a double materiality assessment that:
- From an impact materiality perspective, water use and waste management are critical due to their effect on local communities, ecosystems, and biodiversity. Excessive water withdrawal may strain local supplies, while improper waste disposal could harm waterways and public health, leading to reputational damage and stakeholder concerns.
- From a financial materiality perspective, carbon pricing regulations pose a significant risk to operational costs. Rising carbon taxes, stricter emissions caps, and energy efficiency requirements could directly affect profitability and long-term competitiveness in the market.
By addressing both perspectives, the company can proactively implement efficiency measures, adopt cleaner technologies, and engage stakeholders, enabling it to manage risks, seize opportunities, and report transparently under recognised ESG frameworks.
Example 2: A professional services firm, such as a large consultancy, may discover through a double materiality assessment that:
- From an impact materiality perspective, employee wellbeing, diversity and inclusion, and community engagement are critical. These factors influence social outcomes, brand reputation, and the firm’s ability to attract and retain top talent.
- From a financial materiality perspective, data security and climate-related disruption to operations present significant risks. A major data breach could result in fines and client loss, while extreme weather events could impact office availability, client delivery, and travel costs.
By considering both perspectives, the firm can strengthen social impact programmes, invest in digital security, and adapt operations for climate resilience, turning ESG insights into competitive advantages
How Positive Planet Can Help
As an experienced sustainability consultancy, Positive Planet works with businesses of all sizes to design and deliver robust double materiality assessments. We provide:
- Expert Facilitation – Guiding workshops and stakeholder engagement.
- Regulatory Insight – Ensuring compliance with, ESRS, GRI, UK SRS, and other reporting standards.
- Clear, Actionable Outputs – Turning complex data into practical sustainability roadmaps.
Whether you’re new to ESG reporting or preparing for CSRD compliance, we help you move from compliance to opportunity.
Meet our ESG Expert, Emma Gray
Emma brings extensive experience in sustainability consulting. Before joining our team, she worked at one of the largest sustainability consulting firms, supporting companies with ESG disclosures. With a proven track record of helping businesses navigate their ESG roadmap, Emma is a trusted guide for those of you looking to elevate your sustainability activities further.
Start Your Double Materiality Assessment Today
The shift towards double materiality is more than just a reporting requirement, it’s an opportunity to strengthen your business resilience, reputation, and long-term value.
Contact Positive Planet to discuss how we can support your organisation in delivering a meaningful materiality assessment that drives both impact and business success.