Double materiality analysis helps organizations identify which ESG issues are most relevant by assessing two key dimensions: the organization’s impact on the environment and society, and the financial impact of ESG risks and opportunities on the organization. Required under the ESRS and detailed in IG 1 guidelines, this analysis ensures regulatory compliance and supports the creation of reliable, audit-ready sustainability reports. Key outputs include a double materiality matrix, risk mapping, and stronger stakeholder engagement.

Table of contents

  1. What is double materiality analysis?
  2. What is the objective of double materiality analysis?
  3. Why is double materiality analysis essential?
  4. What does the double materiality analysis process look like?
  5. What are the benefits of conducting the analysis?
  6. How long does a double materiality analysis take?

What is double materiality analysis?

Double materiality analysis is a mandatory component of sustainability reporting under the CSRD directive and ESRS standards. It allows organizations to assess which environmental, social, and governance (ESG) issues are most significant for their business. The analysis considers two complementary perspectives:

  • Impact materiality: how the organization affects the environment and society,
  • Financial materiality: how external ESG factors influence the organization’s operations and financial performance.

This obligation stems from European regulations and is thoroughly described in the IG 1: Materiality Assessment Implementation Guidance published by EFRAG.

What is the objective of double materiality analysis?

The goal is to determine which ESG topics must be included in a report compliant with ESRS. A well-conducted analysis enables the organization to:

  • Identify key topics for the company and its stakeholders,
  • Recognize ESG-related risks and opportunities,
  • Ensure compliance with reporting and audit requirements,
  • Optimize its sustainability strategy.

Why is double materiality analysis essential?

It is the foundation for CSRD compliance. The analysis directly impacts the scope and reliability of ESG reporting. It is critical for:

  • Defining which ESRS indicators are material and must be reported,
  • Fulfilling audit obligations – the analysis is subject to external verification,
  • Preventing greenwashing – demonstrating due diligence and transparency,
  • Building stakeholder and investor trust.

What does the double materiality analysis process look like?

The process must be documented, repeatable, and aligned with ESRS. Typical stages include:

  1. Organizational context analysis: reviewing the business model, regulatory environment, industry, and value chain.
  2. Stakeholder engagement: internal workshops, interviews, and surveys to capture diverse ESG perspectives.
  3. ESG topic identification: based on ESRS AR16 and company-specific factors.
  4. Materiality assessment: evaluating scale, scope, remediability, and financial implications.
  5. Double materiality matrix: visualizing key topics from both materiality lenses.
  6. Integration into strategy and reporting: ensuring transparency, auditability, and alignment with other reports.

What are the benefits of conducting the analysis?

  • Full compliance with CSRD and ESRS obligations
  • Improved ESG risk management and business resilience
  • Greater transparency and stakeholder confidence
  • Easier auditing and reduced non-compliance risk
  • Stronger brand positioning as a responsible company

How long does a double materiality analysis take?

The average completion time is 6–10 weeks, depending on:

  • Organizational structure complexity,
  • Maturity of ESG systems,
  • Availability of data and stakeholders,
  • Scope of reporting and number of locations.