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How to conduct a double-materiality assessment to comply with the EU’s CSRD

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Thomson Reuters or enjoy below:

🗞️ Driving the news: With the deadline looming for companies to conduct double-materiality assessments to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD), experts urge starting early
• This assessment helps determine the scope of required disclosures under this legislation, focusing on companies' impacts on environmental and social matters and their financial outcomes

🔭 The context: The CSRD mandates large non-EU companies with significant EU operations to report on 2025 data starting in January 2026
• It introduces the concept of double materiality, requiring companies to disclose only material matters affecting both the environment and their financial performance

🌍 Why it matters for the planet: The directive emphasizes the importance of assessing and disclosing companies' environmental and social impacts
• By doing so, it aims to enhance transparency and encourage businesses to adopt more sustainable practices, ultimately contributing to global sustainability goals

⏭️ What's next: Companies must begin their double-materiality assessments by engaging with various internal departments and stakeholders to identify and prioritize material ESG topics
• This preparatory work is crucial for developing audit-ready processes and data for compliance and effective sustainability reporting

💬 One quote: "More often than not, companies currently rely on a qualitative, relative scale, scoring matters against each other on a low-medium-high or 1-5 scale… with the understanding that they will be expected to quantify their material risks and opportunities over time," says Kevin Fertig, a climate and sustainability strategy expert at Agendi Inc.

Click for more news covering the latest on Corporate Governance

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