Carry out the double materiality assessment

The double materiality assessment (DMA) decides, topic by topic, which disclosures your sustainability report has to contain. Each of the ten topical ESRS topics, from E1 to G1, has its own DMA page with the same layout. This article walks through the workflow using climate as the example and links to the guides for each step.

Prerequisites

• A reporting period has been created for your team.
• The CSRD reporting boundary for this period is complete and locked (see Define CSRD organizational boundary). Otherwise the page only shows a notice asking you to complete the boundary.
• Recording and editing: Administrator, Manager, Editor. Activating: Administrator, Manager, Approver. Reverting to draft: Administrator only.

The page at a glance

• Header: the status “Draft” or “Active” and the “Actions” menu. The DMA applies to the selected reporting period; there is exactly one per topic, reporting period and boundary.
• “Matrix”: every scored IRO in one picture – the impact score across, the financial effect score up. “Export” downloads the matrix as an image.
• “Sub-topic areas”: one card per area, for climate “Climate Change Mitigation”, “Climate Change Adaptation” and “Energy”. Each card shows the status, the number of IROs, how many are material and what is still to do.
• “Impacts, risks and opportunities (IROs)”: the table of all IROs with filters for type, outcome and status. Clicking a row opens the IRO.

Step by step

1. Open “Climate → DMA”.
2. If AI is configured, get a first set of suggestions: Discover IROs with AI.
3. Record and assess each IRO with “Add IRO”: Add and assess an IRO. If it came from talking to affected people: Record stakeholder engagement on an IRO.
4. Define areas that clearly do not apply as not material: Define a sub-topic area as not material.
5. Climate only: under “Actions”, record the climate risk method.
6. Validate completeness and activate the DMA: Validate completeness and activate the DMA. The scores then lock and the disclosures of the material sub-topic areas switch on.
7. For later changes: Revert the DMA to draft, archive or delete an IRO.

How materiality comes about

• An IRO is material if its impact side or its financial side is material – with scoring at 12.5 of 25 or above, otherwise by your written decision.
• A sub-topic area is material as soon as one of its IROs is material. The topic is material as soon as one sub-topic area is material.
• Only the disclosures of the material sub-topic areas are reported.

Practical tip: An impact and the risk or opportunity it creates are one IRO with two sides – for example the emissions from gas-fired heat treatment and the rising carbon costs. Do not create two entries for them.