The Corporate Sustainability Reporting Directive (CSRD) is leading to an expansion of sustainability reporting for companies in the EU and is gradually becoming mandatory for most companies. The materiality analysis is a fundamental analysis of your company's impact on the environment and society and the risks this poses for your company.
The materiality analysis is used to determine which chapters of the European Sustainability Reporting Standards (ESRS) your company must include in its sustainability report.
What topics are included in the ESRS?
There are two cross-divisional European Sustainability Reporting Standards (ESRS) and ten thematic, industry-independent ESRS standards.
Cross-divisional standards ESRS 1 and ESRS 2
The cross-cutting ESRS standards cover general requirements such as mandatory disclosures on the business model, environmental strategy, corporate governance, reporting period, materiality analysis and other reporting requirements.
Thematic ESRS standards
The 10 thematic ESRS standards are divided into the areas of environment, social affairs and governance. The materiality analysis determines which of the ESR standards are reportable for your company.
Environmental standards:
ESRS E1 - Climate change (including greenhouse gas reporting)
ESRS E2 - Pollution
ESRS E3 - Water and marine resources
ESRS E4 - Biodiversity and ecosystems
ESRS E5 - Circular economy
Social standards:
ESRS S1 - Own workforce
ESRS S2 - Workers in the value chain
ESRS S3 - Affected communities
ESRS S4 - Consumers and end users
Governance standard:
Double materiality
The double materiality analysis narrows down what your company needs to report on and is divided into two perspectives:
Inside-Out ("Impact Materiality"): What is your company's potential positive or negative impact on the environment or society?
Outside-in ("Financial Materiality"): What opportunities or risks does the environment or society pose for your company, including future developments?
How can Sustainability& help you?
Together with you, we go through the requirements of the materiality analysis step by step and record your environmental impacts and risks. We evaluate the results of your materiality analysis and work out with you in which areas you need to collect further key figures. Based on a gap analysis, we identify the next steps towards a sustainability report and create a roadmap for CSRD compliance.
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