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Brain Circuits
How to get more mileage from your double materiality assessments
Double materiality assessments are a key element of ESG reporting that include a firm’s impact materiality (business activities that might impact society), as well as its financial materiality (sustainability issues that might impact results). But how can firms capture the full potential value of this broad analysis of sustainability issues?
1 Define material issues first
To move beyond CSRD-compliant ESG reporting, consider potential actionability when identifying material issues in the research phase.
2 Identify focus areas
To help envision how to take actions that improve the sustainability impact, zone in on the following:
Transformative priorities
Material topics that are essential to build long-term value and maintain a competitive advantage.
- Sustainability enablers
Material topics that put you in the right position to address the core focus areas.
- Continuous improvement areas
Material topics that should be actively monitored and managed to meet compliance standards and mitigate risk.
3 Keep up with evolving materiality issues
As the business develops, practical sustainability concerns may shift, so materiality issues will change over time. This means materiality is an ongoing process that requires constant attention, requiring updates to implementation plans, materiality assessments, strategies, and reporting – and, of course, ongoing dialogue with all stakeholders.
Key takeaway
Transformation is impossible when remaining silent, so it’s critical to walk the talk and talk the walk while continuously communicating with stakeholders.
Further reading
Don’t be a mixed-up chameleon! How to prioritize your ESG issues
Materiality: From reporting requirement to strategic insight
Under attack from multiple angles, does ESG’s evolution need a helping hand?
How regulation is shaping the future of ESG ratings and sustainable investments
Think your company’s too small to worry about ESG reporting?
Let’s be clear: ESG is not ‘woke’ and it’s different from sustainability
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