Double Materiality Analysis – ESG

The Corporate Sustainability Reporting Directive (CSRD) requires companies to submit detailed sustainability reports starting in 2025, in addition to their regular financial reports. The Double Materiality Analysis (DMA) is the first and most crucial step in this process. This analysis forms the foundation of your sustainability report and is essential for achieving CSRD compliance.

Why is the double materiality analysis important?

A Double Materiality Analysis (DMA) not only helps your organization comply with the CSRD, but it also offers tangible benefits:

• It allows you to identify significant risks and opportunities that may impact the future of your business.
• You gain insights into the environmental and social impacts of your business activities.
• You develop strategies for managing risks such as climate change, regulation, and other sustainability trends.

What is double materiality?

The DMA looks at sustainability from two key perspectives:

1. Impact materiality: How your business activities affect society, the environment, and the economy.
2. Financial materiality: How external factors, such as climate change, new regulations, and other sustainability trends, can affect your company’s financial performance.

A thorough DMA not only helps you meet CSRD requirements but also offers valuable strategic insights to integrate sustainability into your business strategy.

How to get started? Download the duide “Double Materiality Analysis in 6 Steps”

To assist you, we offer the guide “Double Materiality Analysis in 6 Steps.” This guide provides practical steps to carry out a Double Materiality Analysis, engage stakeholders, and take the initial steps toward achieving full CSRD-compliant reporting.

Who needs to report?

The CSRD applies to EU companies that meet at least two of the following criteria for two consecutive financial years*:

• More than 250 employees (FTE)
• Net turnover exceeding €50 million
• Total assets exceeding €25 million

Starting from the 2026 financial year (reports published in 2027), the reporting obligation will also apply to listed small and medium-sized enterprises (SMEs) on regulated markets.

Although this may still seem far away, it is important to start preparing now. For example, by collecting relevant data and setting up reporting systems.

*There are exceptions, for instance for non-EU parent companies or subsidiaries that are included in a group-level sustainability report.

Crowe Peak as your ESG partner

We provide comprehensive support to help your organization meet CSRD requirements and establish a robust sustainability strategy. From conducting the double materiality analysis to integrating ESG reporting into your annual report, we guide you through every step of the process, ensuring your organization can report on sustainability in an efficient and transparent manner.

Our CSRD Roadmap

1. Double materiality: We analyse the impacts, risks, and opportunities according to the double materiality approach. We then define a sustainability strategy that perfectly aligns with your organization according to the material topics of your company
2. Gap analysis: Our experts conduct a thorough gap analysis of the ESRS, and EU Taxonomy. We clearly define the gaps in terms of data, processes, people and systems and are always available to help you bridge them.
3. Data and IT systems: In close collaboration, we identify your relevant data points. Together, we determine the IT systems that best meet your specific reporting needs.
4. Governance and controls: We assist you in establishing internal controls and reporting aligned with your business and reporting strategy.
5. Assurance readiness: We conduct tests on the functioning of your process and assess the quality of ESG-related data and reports, while assuring the development of a thorough audit trail
6. Annual report: With our guidance, you seamlessly integrate the results of ESG reporting into your annual report.

Questions?

Got questions? Our consultants are here to support you every step of the way, from the first DMA to assurance and beyond. Please fill out the contact form below!