Double materiality assessment
The double materiality assessment decides which sustainability topics a company reports on. This page explains how it works, who still needs it in 2026 and how to get a first draft in ten minutes with a screening of the ten ESRS topics.
Start the screeningGet support
ESRS 2026· Rules as of October 2026· No sign-up
What double materiality means
Two perspectives on the same topic. A topic is material as soon as it matters from either one.
Impact materiality (inside-out)
How does your company affect people and the environment, in its own operations and along the value chain? Assessed by severity, meaning scale, scope and whether harm can be remedied, plus likelihood for potential impacts.
Financial materiality (outside-in)
How does a sustainability topic affect your company: revenue, costs, access to finance or asset values? Assessed by magnitude and likelihood of financial effects over the short, medium and long term.
“Or”, not “and”
Under ESRS a topic is material if it is material from either perspective. The ISSB standards (IFRS S1 and S2) only look at financial materiality, for investors. A topic that matters only through its impact on people would not appear in an ISSB report, but must appear in an ESRS report.
Difference to GRI
The GRI Standards only look at impact, without the financial perspective. A GRI materiality assessment is a good starting point for the impact side, but not yet a double materiality assessment.
In German the assessment is called doppelte Wesentlichkeitsanalyse; the two perspectives are Auswirkungs- and finanzielle Wesentlichkeit.
Materiality screening: which ESRS topics are material for you?
For each of the ten ESRS topics, estimate how strongly your company affects people and the environment and how strongly the topic affects your company financially. The screening shows which topics would be material under ESRS logic. It does not replace an assessment, but it is an honest first draft.
The logic follows ESRS: a topic is material if it reaches the threshold from either perspective; both at once are not required. You set the threshold yourself and justify it in the assessment. Your inputs stay in your browser.
Who needs the assessment and who does not
The Omnibus package has shrunk the circle of companies in scope. The assessment itself has stayed.
CSRD reporters
Since Directive (EU) 2026/470, only companies and groups with more than 1,000 employees and more than €450 million net turnover report under ESRS, for financial years from 2027. For them, the double materiality assessment is the starting point of the report. More in the CSRD overview.
Revised ESRS
The revised standards are set out in Delegated Regulation (EU) 2026/1563 and apply for financial years starting on or after 1 January 2027. The core logic of double materiality stays; the process and its documentation have become leaner.
SMEs under VSME
The voluntary standard (Delegated Regulation (EU) 2026/1560) does not require a full double materiality assessment. Disclosures that do not apply are omitted. More on VSME reporting.
Customer requests
Reporting companies may only ask suppliers with up to 1,000 employees for information within the scope of the voluntary standard. A questionnaire saying “please send us your materiality assessment” has become negotiable for many suppliers.
ESRS do not require a materiality matrix. What must be disclosed is the process and the material impacts, risks and opportunities.
The double materiality assessment in six steps
The order matters more than the tools. Starting with a survey collects opinions on topics nobody has understood yet.
Understand the context
Map the business model, sites and value chain: where do impacts arise, where does the business depend on nature, people or regulation?
Collect topics
Use the ten ESRS topics and their sub-topics as a grid and add sector-specific topics. Better too many on the list than too few.
Gather knowledge
Internal experts, affected stakeholders, existing data. Stakeholders provide input; the assessment stays with the company.
Assess with thresholds
Rate every impact, risk and opportunity on both axes. Set and justify the thresholds beforehand, do not move them afterwards until the result fits.
Record the result
List the material topics with reasons. A matrix helps to explain, but it is not the result.
Document and review
Document process, sources and decisions so an auditor can follow them, and check every reporting year whether anything material has changed.
How long it takes depends mostly on the state of your data. My estimate for mid-sized companies: weeks rather than months, if the value chain is already described.
Three topics, three results
A fictitious automotive supplier with 400 employees, threshold “high”. Not a client project, but an example of how the logic works.
Climate change is clear-cut: energy-intensive production on one side, carbon prices and customer requirements on the other.
The workforce is more interesting: financially the topic is only medium, but the impact on people working shifts is high. Under ESRS that is enough. Under an investor-only lens such as ISSB, it would not have made the report.
Water is not material for this supplier. The report may say so, with a reason. An honest “not material” is worth more than twenty pages on a topic that affects nobody.
Where assessments go wrong in practice
The matrix becomes the goal
A lot of time goes into a nice chart, little into the reasoning. The reasoning is what gets audited.
Survey instead of judgement
A stakeholder survey with 200 answers does not replace a professional assessment. It shows what people care about, not where the company has an effect.
Thresholds by gut feeling
Thresholds set only after scoring tend to land exactly on the topics the company wanted to report on anyway.
Once and never again
New sites, suppliers, products: the assessment needs a short review every year, not a full reinvention every five years.
The materiality assessment is the one part of the report worth doing without an obligation
A compliant sustainability report is not yet sustainability. But the question where your company actually has an effect and where it is vulnerable stands regardless of whether a law asks it.
Do the assessment properly once and you know which three or four topics count, and you can keep the rest short with a clear conscience. That saves more effort than any software.
When you need the assessment audit-ready
I support the double materiality assessment from the topic grid to documentation an auditor can follow. Tell me whether you report under ESRS or need to answer a customer questionnaire.
Frequently asked questions about double materiality
What is a double materiality assessment?
A process to determine which sustainability topics a company reports on. A topic is material if the company has a significant effect on people or the environment, or if the topic can have significant financial effects on the company.
What is the difference between materiality and double materiality?
Single materiality looks in one direction, usually impact as in GRI, or financial relevance only as in ISSB. Double materiality looks at both and lets one of them suffice.
Do I have to publish a materiality matrix?
No. ESRS require the process and the material impacts, risks and opportunities, not a matrix. Many publish one anyway because it is easy to explain.
Do SMEs need a double materiality assessment?
Not for a report under the voluntary standard (VSME). A short check of which topics apply is still worthwhile, if only because banks and customers ask.
How often must the assessment be updated?
Every reporting year, check whether anything material has changed: new sites, suppliers, products or laws. A completely new assessment is only needed after major changes.
What is the double materiality assessment process?
Understand the context, collect topics, gather knowledge, assess with thresholds, record the result, document and review. The steps are explained above.
Who decides in the end what is material?
The company itself, not stakeholders and not the consultant. Stakeholders provide input, the consultant the method; the decision and its reasoning stay in-house. Occasionally uncomfortable, but it is also the one place in the report where nobody else can be blamed.
Which topics are material for you?
Run the screening or write to me directly. I will tell you whether you need an assessment under ESRS or whether VSME is enough.