Why companies should assess double materiality?

Why companies should assess double materiality?

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As sustainability becomes a top priority, businesses are increasingly looking at their operations through a double materiality lens. This approach goes beyond just assessing a company's environmental and social impact. It also considers how environmental and social issues can affect the company itself, allowing for more informed decisions that are not only sustainable but also strategically sound for the long term.

Understanding Double Materiality Assessment

A Double Materiality Assessment is a crucial step for businesses to understand their impact on the world and how the world impacts them. It's a two-sided analysis. On one hand, it assesses a company's environmental and social impact (outside-in view). This considers how the company's operations affect things like climate change or labor practices. On the other hand, it evaluates how environmental and social issues (inside-out view) can affect the company's finances and future success.

Why is Double Materiality Assessment Important?

By taking a double materiality perspective, businesses can identify potential risks and opportunities, ultimately making more sustainable and strategic decisions. For instance, a company might evaluate its water usage (environmental impact) but also consider how water scarcity could disrupt its operations in the future (social impact on the company). This risk & opportunity identification is a key aspect of long-term thinking and goes beyond impact assessment.

Double Materiality Assessment in Action

Imagine a company assessing its carbon emissions (environmental impact) while also acknowledging how climate change regulations could impact its future costs (social impact on the company). This two-sided approach allows businesses to make strategic decisions that are not just sustainable but also financially sound in the long term. A company's business impact can be significantly influenced by environmental issues and social issues, making a double materiality assessment essential for financial sustainability.

Long-Term Considerations

Double Materiality Assessment helps companies understand their role in the bigger picture. It analyzes a company's impact on the environment and society (like pollution or labor practices), but also considers how environmental and social issues can affect the company itself. By considering both perspectives, businesses can make informed decisions that align with their long-term strategy.

Ultimately, the goal of double materiality is to promote sustainability while ensuring the financial health of the company. By considering the outside-in view and the inside-out view, companies can better understand their business impact and make strategic decisions that ensure their long-term success.


In conclusion, double materiality assessment is an essential tool for businesses aiming to balance sustainability and financial success. It provides a comprehensive understanding of a company's environmental and social impact and how these factors can affect the company's future. By embracing this approach, companies can make informed, strategic decisions that benefit not only their bottom line but also the world around them.

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