Unveiling the Path to Double Materiality: A new research series to explore how companies conduct materiality assessments based on the new rules of the European Sustainability Reporting Standards
The following White Paper was written for CCR members in cooperation with the team of Steffen Rufenach, representative of the CCR expert network and CEO at R.A.T.E. GmbH.
Beginning in 2024, large organizations within the European Union will be mandated to comply with the rules set forth by the new European Sustainability Reporting Standards (ESRS). Subsequently, the requirements will be extended to encompass all listed companies in the EU, along with private organizations that meet specific thresholds. However, the influence of this new regulation will extend beyond the EU, particularly impacting companies with subsidiaries operating within the EU.
One key concept introduced in the ESRS is the Double Materiality principle, which demands companies to enhance their materiality assessments by adopting a holistic perspective. In addition to considering risks and opportunities for the business (outside-in perspective), companies must also examine the impacts their value chains have on people and society (inside-out). While the ESRS features specific rules of how a materiality assessment should be conducted, it also leaves ample room for interpretation, requiring companies to tailor their approaches.
In collaboration with the team of R.A.T.E. GmbH, a trusted expert in rankings and ratings, and materiality assessments, we have embarked on an exciting journey. Our goal is to monitor and assess how companies implement and embrace the new rules, with a particular focus on the crucial aspect of Double Materiality.
Inspired by compelling efforts from companies like PMI and Enel, who have already published intriguing approaches to double materiality assessments, we aim to identify the pioneers and share their valuable insights for others to learn from.
While we understand that we are at an early stage, we also recognize that many companies have already started the transformation. Hence, this research paper is the first in an annual series to monitor the status of reporting in double materiality. Throughout this series, we will seek to answer essential questions such as:
Which companies already comply or are nearing compliance with the new ESRS rules for double materiality?
Who has discovered interesting or innovative methods for conducting research or visualizing the results?
While we are confident that our research will provide valuable first insights, we would also like your help to make this research as valuable and useful as possible. Please get in touch with us if you have questions or suggestions for areas we could explore in future research. Your input and engagement are greatly appreciated as we strive to continually enhance our understanding and support the evolving landscape of sustainability reporting.
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