--- title: "Materiality Assessment Example: An SME Walkthrough With Template and Matrix" description: "A worked materiality assessment example for an SME: 52-topic longlist, the scoring sheet with thresholds, the resulting matrix, and the template behind it." image: https://www.fiegenbaum.solutions/hubfs/pexels-cluster-images/5324985.jpg --- [Skip to content](https://www.fiegenbaum.solutions/en/blog/materiality-assessment-smes-esg-compliance-growth#main-content) [![Fiegenbaum Solutions Logo](https://www.fiegenbaum.solutions/hubfs/Branding/Fiegenbaum-Solutions_Logo.svg) ![Fiegenbaum Solutions Logo](https://www.fiegenbaum.solutions/hubfs/Branding/Fiegenbaum-Solutions_Logo.svg)](https://www.fiegenbaum.solutions/en/?hsLang=en) - [English](https://www.fiegenbaum.solutions/en/blog/materiality-assessment-smes-esg-compliance-growth) - [Deutsch](https://www.fiegenbaum.solutions/blog/wesentlichkeitsanalyse-fuer-kmu-so-finden-sie-versteckte-esg-potenziale-und-machen-sie-im-reporting-sichtbar) - Services - [Climate Risk Assessment](https://www.fiegenbaum.solutions/en/climate-risk-analysis-for-companies) - [VSME Report](https://www.fiegenbaum.solutions/en/vsme-reporting-for-smes) - [ESG Due Diligence VCs & Series A+](https://www.fiegenbaum.solutions/en/esg-due-diligence-vcs-series-a-startups) - [Product Carbon Footprint](https://www.fiegenbaum.solutions/en/product-carbon-footprint-lifecycle-assessment) - [Corporate Carbon Footprint](https://www.fiegenbaum.solutions/en/company-carbon-footprint-methods-tools-best-practice) - Solutions - [Materiality Screening](https://www.fiegenbaum.solutions/en/double-materiality-analysis-definition-process-best-practice#fs-screening) - [Atlas](https://atlas.fiegenbaum.solutions/en) - [Load Profile Check](https://atlas.fiegenbaum.solutions/en/lastgang-check) - [Pricing](https://www.fiegenbaum.solutions/en/esg-climate-consulting-fixed-prices-carbon-footprint-vsme-due-diligence-climate-risk) - [About me](https://www.fiegenbaum.solutions/en/about-me) - [Blog](https://www.fiegenbaum.solutions/en/blog) - [Contact](https://www.fiegenbaum.solutions/en/contact) ###### 8 min read # Materiality Assessment for SMEs: From ESG Compliance to Growth Opportunities By: [Johannes Fiegenbaum](https://www.fiegenbaum.solutions/en/blog/author/johannes-fiegenbaum) on 7/29/25, 9:14 PM · Last updated October 11, 2026 [VSME](https://www.fiegenbaum.solutions/en/blog/tag/vsme) [ESG Strategy & Materiality](https://www.fiegenbaum.solutions/en/blog/tag/esg-strategy-materiality) ![Team watching a colleague draw a chart on a flipchart](https://www.fiegenbaum.solutions/hubfs/pexels-cluster-images/5324985.jpg) Most materiality guides stop at the definition. This one runs a single, constructed but typical assessment end to end: a component supplier with 180 employees, a 52-topic longlist, the scoring sheet that produced the decisions, the threshold that put topics in or out, and the matrix that came out of it. The template behind it is reusable, and the ESRS and VSME rules that actually apply to a smaller company are set out where they matter. ## What Is a Materiality Assessment, and Why Does It Matter for SMEs? A materiality assessment is a structured filter. It takes the full universe of ESG issues a company could report on and narrows it to the material topics that justify disclosure, measurement and management attention. Everything downstream, from data collection to targets to customer questionnaires, depends on that filter being defensible. Two logics exist side by side. Single materiality asks only how ESG issues affect the company financially. Double materiality, the standard under ESRS, adds the reverse direction: how the company affects people and the environment. A topic is material if it crosses the threshold on either axis. My position on the shortcut that has become popular: an AI-generated materiality analysis is a usable starting point for the longlist and nothing more. It is never an audit-proof result. The check that exposes one in a minute is to ask where a given score came from. If no stakeholder, interview or document sits behind the number, the assessment has no evidence base, only prose. ## Materiality Assessment Example: An SME Manufacturer From Longlist to Matrix The company, a constructed case built from the pattern of real assessments: a component supplier to the automotive industry, 180 employees, roughly 35 million euros turnover, one production site. Not in scope for mandatory reporting, but receiving tier-1 customer questionnaires that ask for documented evidence of a materiality assessment. The process took six weeks. The longlist covered 52 topics derived from the ESRS topic structure and cut down to what a single-site manufacturer can plausibly affect or be affected by. Stakeholder input came from five internal leadership interviews, a structured survey to twelve key customers and eight suppliers, and a review of sector guidance for the automotive supply chain. Each topic was scored twice, on impact and on financial materiality, across three criteria per axis on a scale of one to five, giving a maximum of 15 points per axis. The threshold was set before scoring at 9 points, 60 percent of the maximum, and a topic above it on either axis was treated as material. Physical and transition risk were scored on the financial axis like any other risk, using the [climate risk analysis](https://www.fiegenbaum.solutions/klimarisikoanalyse-f%C3%BCr-unternehmen?hsLang=en) method. This is the sheet the assessment produced: | Topic (ESRS) | Impact score | Financial score | Material? | | --- | --- | --- | --- | | Energy use and transition risk (E1) | 12 | 13 | Yes, both axes | | Physical climate risk in the supply chain (E1) | 7 | 11 | Yes, financial | | Chemicals and substance management (E2) | 11 | 6 | Yes, impact | | Health and safety, own workforce (S1) | 12 | 8 | Yes, impact | | Labour practices at tier-2 suppliers (S2) | 11 | 7 | Yes, impact | | Business conduct and data security (G1) | 6 | 10 | Yes, financial | | Biodiversity and ecosystems (E4) | 4 | 3 | No | | Consumers and end-users (S4) | 3 | 4 | No | Illustrative score sheet from an anonymised screening. Scores are the assessment's own scale, not a benchmark. The matrix follows directly from the sheet: financial score on one axis, impact score on the other, the 9-point threshold drawn as a line on each. Six topics sit above at least one line, two sit below both. The matrix communicates the result, but the sheet and the written rationale are what survive a questionnaire or an assurance review. Biodiversity was ruled out with a note on land use and site footprint, not silently dropped. Four failure modes show up in almost every first attempt I review. The longlist is copied from a framework and never calibrated to the sector. Stakeholders are consulted after the scoring, so their input can only confirm it. One axis is quietly ignored, usually the impact side. And no threshold is ever written down, which makes every result unfalsifiable. ## The Template Behind the Example: Scope, Longlist, Stakeholders, Scoring The example follows a four-phase template that transfers to any sector. Phase one fixes the scope: which entities and sites, how far into the value chain, which time horizons, and what the assessment is for. Phase two builds the longlist from the ESRS topic structure and calibrates it to the sector. Phase three collects stakeholder input. Phase four scores and sets the threshold, with separate scales for the impact side (scale, scope, irremediability) and the financial side (likelihood, magnitude, time horizon). Eight things make the result defensible when someone pushes back on it: 1. Scope, value chain depth and time horizons fixed in writing before any scoring starts. 2. A longlist derived from the ESRS topic structure, then calibrated to the sector. 3. Stakeholder groups named, each with the reason it was selected. 4. Stakeholder input collected before scoring, not afterwards. 5. Two separate scoring scales, one per axis, with the criteria written out. 6. A numeric threshold recorded, plus the rule that either axis alone can make a topic material. 7. Exclusions documented with a rationale, not just the inclusions. 8. Dated management sign-off and a review date for the next cycle. A spreadsheet carries all of it. Deeper method on the scoring logic is in the [double materiality guide](https://www.fiegenbaum.solutions/doppelte-wesentlichkeitsanalyse-definition-ablauf-best-practice?hsLang=en). ## Double Materiality Under ESRS and VSME: What Actually Applies to an SME Mandatory reporting now applies to companies exceeding both thresholds at once, more than 1,000 employees and more than 450 million euros net turnover, for financial years starting on 1 January 2027. Listed SMEs are exempt. A company in the size class of the example is therefore outside the reporting duty and inside the questionnaire pressure. | | ESRS, in scope | VSME, voluntary | | --- | --- | --- | | Who | Above both size thresholds | SMEs asked by customers, banks and investors | | Materiality logic | Double materiality, mandatory, defined in ESRS 1 | No formal materiality assessment required; disclosures apply "if applicable" | | Stakeholder step | Documented and itself part of the disclosure | No prescribed depth | | Topic universe | Full ESRS topic list, climate needs justification if excluded | Condensed basic and comprehensive modules | The practical consequence for a supplier: the assessment does not have to reach ESRS depth, but it does have to be written down. A large customer asking for material topics wants the list and the reasoning behind it. The [VSME implementation guide](https://www.fiegenbaum.solutions/nachhaltigkeitsberichterstattung-f%C3%BCr-kmu-vsme-standard-einf%C3%BChren?hsLang=en) covers what the standard asks for beyond the materiality step. ## From Material Topics to a Focused Roadmap The list of material topics is an input, not a result. In the example it produced four things: a short set of targets tied to the six topics above the line, a data collection scope that ignores the rest, an agreed answer to the recurring customer questions on emissions and supplier labour practices, and a note for the bank conversation on energy costs and transition risk. It also sets the order of work. Energy and emissions came first because both axes scored high, which means measurement before anything else. A structured [materiality screening](https://www.fiegenbaum.solutions/doppelte-wesentlichkeitsanalyse-definition-ablauf-best-practice?hsLang=en#fs-screening) tests an existing assessment before a reporting cycle rather than after it. ## Frequently Asked Questions How do you calculate a materiality threshold? Score each topic on a fixed scale per axis, then set a cut-off as a share of the maximum score before you look at the results. In the example above, three criteria scored one to five gave a maximum of 15 per axis, and the threshold was 9 points. What matters is fixing it in advance and treating a topic above it on either axis as material. What are the three types of materiality? Financial materiality asks how ESG issues affect the company's results, cash flows and access to capital. Impact materiality asks how the company affects people and the environment, whether or not that feeds back financially. Double materiality is the combination of the two and is the logic ESRS requires. Who conducts the assessment, and who has to be involved? One person owns the process, usually in finance, quality or operations. Involved are leadership, the functions that hold the data, and external groups with a genuine stake: key customers, relevant suppliers, and the bank or investor. Management signs off the result. What happens to a company with no materiality assessment? Outside the reporting duty there is no penalty. The cost shows up in customer questionnaires answered inconsistently, sustainability claims that cannot be backed, and effort spread across topics that were never going to matter. Next step Turn climate risk or ESG data into a decision? In a 30-minute intro call we map where your biggest lever is, with no obligation. [Book an intro call](https://www.fiegenbaum.solutions/en/contact?hsLang=en) ![Johannes Fiegenbaum](https://www.fiegenbaum.solutions/hubfs/Johannes_07-modified.png) ### Johannes Fiegenbaum ESG and sustainability consultant based in Hamburg, specialised in VSME reporting, carbon accounting and climate risk analysis. Works with mid-sized companies, investors and financial institutions, and developed the VSME reporting software VSEasy together with clients. [More about](https://www.fiegenbaum.solutions/en/about-me?hsLang=en) Related articles ## You may also like ### [ESG Data & Metrics 7 Key ESG Metrics Every Company Should Track (2026 Checklist) ESG metrics are the indicators a company uses to measure environmental, social and governance performance, from Scope 1 to 3 emissions and energy use to the gender pay gap and ... 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