Double materiality analysis is a process in which a company assesses the impacts of its operations on the environment and society, as well as the impacts of environmental and societal factors on the company. It is an action aligned with the CSRD directive on corporate sustainability reporting that provides the basis for a company’s sustainability work and its development in companies of all sizes, regardless of whether the company is subject to reporting obligations under the directive or not.
What does double materiality analysis mean in practice?
In practice, this means that the company identifies and prioritizes sustainability topics that are significant both from the perspective of stakeholders and the business itself. A double materiality analysis helps the company recognize and select the key focus areas and sustainability themes that are most relevant to its operations and sustainability efforts.
A double materiality analysis is a strategic business development tool that provides a comprehensive view of the company’s impacts on people and the environment, as well as the effects of external factors on the company’s financial performance. It also helps identify business risks and opportunities from the perspective of the company’s sustainability work and related sustainability issues.
A company can use the results of a double materiality analysis in all of its strategyand sustainability work as well as in corporate responsibility reporting.
A simplified double materiality analysis for sustainability work in an SME includes an assessment of the current state of sustainability work, a preliminary identification of sustainability themes, stakeholder consultation, the selection of sustainability themes that are material from the company’s business perspective, and the documentation of the entire process.
Download our practical guide for free: Double Materiality Analysis in SMEs (PDF, 280 kB, no registration required, in Finnish)
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