CSRD Materiality Assessment

CSRD & DOUBLE MATERIALITY

At a time when sustainability is increasingly at the core of corporate management, the requirements of the Corporate Sustainability Reporting Directive (CSRD) are of critical importance. This directive not only introduces expanded reporting obligations but also the concept of double materiality. This concept requires companies to identify and assess both the impact of their business activities on the environment and society, as well as the effects of social and environmental issues on the company itself.

NOTICE

For Q1 2025, the EU Commission has announced an "Omnibus Package," which would have far-reaching consequences for the CSRD. The EU Commission’s proposal was published on February 26, 2025. However, its adoption into binding law still requires approval from the European Council and the EU Parliament. Please note that our documents and information are always based on the currently applicable legal framework (as of 02-2025).

WHY REPORT?

The Corporate Sustainability Reporting Directive (CSRD) came into effect on January 5, 2023. It expands and revises the non-financial reporting requirements previously established under the Non-Financial Reporting Directive (NFRD), which previously applied only to large publicly traded companies and financial institutions.

With the CSRD, the scope of reporting has been significantly broadened, covering more companies and increasing the depth and detail of disclosures. The first step in preparing a sustainability report under the CSRD is identifying relevant sustainability topics based on the principle of double materiality—assessing both a company’s impact on the environment and society, as well as how sustainability-related factors affect the company itself.

WHY START NOW?

As of 2025, many mid-sized companies are required to report under the CSRD (learn more in our CSRD Whitepaper). Their first sustainability report for the 2025 financial year must be published in 2026.

While this may seem like ample time, it’s important to note that the first report should include prior-year data for comparison. Companies that have not yet started their double materiality analysis should urgently begin the process now to ensure a well-founded and compliant sustainability report.

WHAT IS DOUBLE MATERIALITY?

A double materiality assessment answers two key questions:
Outside-In: Do global developments have a significant impact on my company?
Inside-Out: Does my company have a significant impact on global developments?

Each defined sustainability category is assessed for materiality from these two perspectives. The CSRD (Corporate Sustainability Reporting Directive) and ESRS (European Sustainability Reporting Standards) provide the theoretical foundation for this approach. If at least one of these questions is answered with "Yes," the category is considered material.

Materiality has always been a key criterion for the management report, as it ensures that readers gain a realistic picture of a company’s condition, opportunities, and risks—beyond financial metrics like the balance sheet and income statement. The outside-in perspective is a continuation of existing practices, with sustainability categories further expanding and refining the assessment approach.The inside-out perspective, however, presents a greater challenge for companies. It requires a deep understanding of impact relationships along the supply chain, including effects that may occur at distant points in the value chain.

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OUR APPROACH

As a consulting firm specializing in mid-sized businesses, we offer a pragmatic and proven approach that avoids bureaucracy while creating real business value. Our well-structured 5-phase model is tailored to the specific needs of your company. We support you not only in materiality analysis but also in developing a sustainable corporate strategy, designing effective measures, and establishing a reporting system. With our BECEPTUM approach, we ensure that your sustainability strategy drives business value and enhances your company’s attractiveness as an employer for young talent.