An Introduction to Double Materiality Assessments

Join Intertek’s Catherine Beare and Zineb Belymam as they unpack one of the most talked-about concepts in ESG today: double materiality.

With pressure mounting from the EU’s Corporate Sustainability Reporting Directive (CSRD) and recent updates through the Omnibus Review, organizations are navigating a complex landscape of sustainability risks, impacts, and disclosures. From practical insights to real-world client experience, this episode explores what double materiality really means and how companies are tackling assessments in practice. Whether you’re new to ESG or refining your reporting strategy, this episode offers valuable clarity and guidance.

Listen now to learn more.

Speakers:

Catherine Beare, Regional Director - Business Assurance (UK & Iberia)
Zineb Belymam, Senior Sustainability Consultant, Intertek Assuris

Follow us on- Intertek's Assurance In Action || Twitter || LinkedIn.

Transcript

Transcript- An Introduction to Double Materiality Assessments

June 12, 2025

00:18 --> 01:19
 Speaker 1 – Catherine Beare, Regional Director - Business Assurance (UK & Iberia)

Hello and welcome to this podcast, diving into double materiality assessment matrix. A topic, which I am extremely enthusiastic about. I have actually been involved myself in working with a number of our customers on doing double materiality assessments.

So, I'm really looking forward to this one, Zineb.

I'm Catherine Beare, the Regional Director of Business Assurance in the UK and Iberia and I'm delighted to be joined by my colleague Zineb Belymam. Did I say that correct? Did I get your surname, Right?

01:19 --> 03:32
 Speaker 2 – Zineb Belymam, Senior Sustainability Consultant, Intertek Assuris

Yes, exactly. Thank you, Catherine.

00:16 --> 02:38
 Speaker 1 – Catherine Beare, Regional Director - Business Assurance (UK & Iberia)

Excellent. Zineb is a Senior Sustainability Consultant within our Assuris business line.

Now, Zineb has been in the sustainability field for over 15 years with deep experience in ESG reporting and sustainable finance.

So Zineb, the concept of double materiality, is gaining a lot of traction, especially with the influence from the most recent EU’s corporate Sustainability Reporting Directive, CSRD, and now we know that there have been some changes with the CSRD Omnibus Review.  Overall, I think it is fair to say that the double materiality assessment is one that is here to stay, and one which businesses are seeing a lot of benefit from.

But let's start with looking at what does it means in practical terms for companies building out sustainability strategies. So, let's dive into this topic and of course, what the implications of it mean.

So Zineb, let me start off with a very basic question.

What is a double materiality assessment matrix and how does it differ from the traditional materiality in sustainability reporting, please?

02:39 --> 08:49
 Speaker 2 – Zineb Belymam, Senior Sustainability Consultant, Intertek Assuris

Thank you, Catherine, for having me and for this interesting topic.

So, to understand double materiality, let's first explain what materiality means. So, originally it's a term from finance and auditing, basically referring to any piece of information important enough to influence a decision. For example, say you are an investor, if knowing this information will change your mind, this information will be called material.

So, coming from this finance and auditing world and over time, companies started realizing it's not just about numbers that matter anymore. And let's say that as environmental and social issues become more visible, more urgent, this concept of materiality started to stretch as well. So, we started to think and include things like climate change, firstly, pollution, labor condition, human rights, governance and so on.

Coming from this, we moved into what we now call ESG (Environmental, Social and Governance). Now, companies are not looking only for numbers and for finance performance, but now they are looking at how these ESG issues are affecting them--that's what we call finance materiality.

This is the traditional materiality. This topic includes, for example, as I said, climate change, pollution, labor condition, how it will affect my financial performance. But, we also need to think about the other side of the story, will climate change impact our profit? Or will the new regulation hurt our business model? It became obvious that this was only one side of the story. The other side of the story was how the company itself will Impact the planet and impact the people and impact the communities and then the idea of double materiality coming. So, double materiality, to sum up, is when we are talking about an ESG topic, for example, climate change, and this topic of climate change affects a company’s financial performance. But also, when companies are affecting the climate change--this double sided story is what we called double materiality. 

This concept was officially introduced in 2014 by the European Commission through a directive called NFRD (Non-Financial Reporting Directive). And today, as you said earlier, it's part of a bigger, stronger regulation called the CSRD (Corporate Sustainability Reporting Directive), adopted in 2022, but lucky us, with the major change and the recent change of Omnibus, this double materiality was not affected by the changes.

Until this directive, companies are required to look at both sides.  Firstly, financial materiality--it's like, how sustainability issues affects the company's value, performance or even survival. And secondly, the impact materiality--it's how the companies are affecting the world around them. When we are referring to the world around them, it means the people, nature, climate, society, community and so on.

Let me share with you 2 examples to make it real. 

Let's take, for example, an airline company. For an airline company, its planes release a lot of greenhouse gas, and it's a major impact materiality issue. But those same emissions, could also lead to carbon taxes or fuel price volatility, which becomes a financial materiality issue for this airline company.

Let's look at another example, a mining company. As we know, a mining company can damage land or pollute water or affect local communities. At the same time, some environmental scandals can lead to a big financial losses or even shutdowns. 

So now, companies are using this double materiality matrix to have this overview of the materiality of this topic. Let's say it's like a map, you have on the horizontal axis, what matters for the business. And one the other axis, the vertical one, we have what matters to the planets and the people. As explained, it's a map, what we have on the top right corner--it's there where you can find your strategic ESG priority.

So, these priorities and this issue are both risky for the company and very meaningful for the world. Now, this double materiality is becoming a cornerstone for sustainability strategy and this is exactly what regulators, investors and the public are asking for.

08:50 --> 09:15
 Speaker 1 – Catherine Beare, Regional Director - Business Assurance (UK & Iberia)

Absolutely, and a really, really comprehensive explanation there. Thank you, Zineb.

So, can you now walk us through how companies typically conduct a double materiality assessment? And what are the main steps or components that they should include to ensure its credible, which is obviously important?

09:15 --> 15:54
 Speaker 2 – Zineb Belymam, Senior Sustainability Consultant, Intertek Assuris

Exactly. Before answering these questions, let's take a step back.

When the EU (European Union) introduced new sustainability rules, in 2014 with the NFRD or with CSRD in 2022, they didn't want companies to just tick boxes. They really wanted them to really understand two things: what's happening to them, and what is happening because of them. 

As an organization, you are having an impact and these impacts can be negative or can be positive, but at least as an organization you should be aware of this. So, in the EU to help organizations in this journey of double materiality, they created an advisory group called EFRAG (European Financial Reporting Advisory Group). It's like an expert body in charge of setting up the European sustainability reporting standards, or what we commonly call “ESRS”in CSRD, and they came up with a structured way for companies to assess their double materiality.

You can ask, for example, which company or who is required to do this? To make it simple, the CSRD is asking large companies based in the EU or listed one.  For these kinds of companies, it's mandatory, but for all other organization it's still highly useful. Why? Because simply, this double materiality will help you to see clearly where your business is vulnerable, and where your business makes a difference, good or bad? As I said, some impacts can be positive and some impacts can be negative.

So concretely, how we do it? Firstly, we should understand our landscape. For example, we can ask ourselves what part of the company are we looking at? (just our offices or subsidiaries, or the headquarter, or our full value chain, which include suppliers, clients, partners, NGOs, communities, etc.).So, once we have this landscape, we start by listing the relevant ESG topics.

·         Is it climate change?

·         Is it pollution?

·         Is it water?

·         Is it human rights?

·         Is it suppliers etc.

In this step, we can use some international frameworks like GRI (Global Reporting Initiative), legal requirements and benchmark, etc. I insist on the fact that we should not forget our stakeholders expectations. 

Secondly, we should listen to our stakeholders, as I always say for double materiality, or even for any other project, don’t guess what people care about. Please ask them. Talk to your teams. Talk to your customers, investors, NGOs, even local communities, if relevant--ask what they expect from you, and what they are worried about. It's very important and critical in this step to be very, very detailed and exhaustive.

Thirdly, assess what matters for you and for the world. It's like evaluating this topic. This list of topics we already defined earlier. On one hand, as I said, what issue could affect our business financially and on the other hand, what impacts are we having on people on planets and society? And we can use some simple criteria, there is no need for complicated formula. We can, for example, say how big is the impact? how long will it last? or how can we fix it? So, this is where double materiality really comes to life.

The last step will be to take your finding and organize them in a simple matrix. Actually, when we see what companies are disclosing in their sustainability reports, we have different format of metrics. Actually, the EFRAG, as previously stated the committee or the advisory group in charge of it, did not set like template or one matrix that all companies and organizations should follow.  Actually, it's open to companies and organizations to define what can fit them the most, and we can see from sustainability reports that's the most simple and can be the most meaningful. 

For example, we can have on one axis, the horizontal one, what's important for the business? Which means, what impacts our financial performance. The other one, what's important for the world around you, including planets, people, society, communities and so on. In the top right corner, it's there, where your ESG priority sits. To make all this journey count, use these metrics to guide your strategy and build it into your risk systems.

Also, your stakeholders, especially external ones, need to know how you did it, so please share it in your sustainability report or your website or your external communication and update it every few years. The recommendation from the EFRAG is to update it every two or three years depending on your sector, your size, etc.

The last one, I will say you can ask for a third-party assurance to make the process more credible. So, in the end I will say the double materiality assessment is not just for compliance. It's about making better decisions, be more informed, more responsible and more aligned with the future of the stakeholders’ expectations.

15:54 --> 16:12
 Speaker 1 – Catherine Beare, Regional Director - Business Assurance (UK & Iberia)

Great. Thank you.

So, look in your experience, then just to round off, what do you see as a couple of the common challenges companies face when building a double materiality challenge and how do they overcome those barriers, Zineb?

16:12 --> 21:13
 Speaker 2 – Zineb Belymam, Senior Sustainability Consultant, Intertek Assuris

I've been working in the field of sustainability for over 15 years. I will say, 17 years exactly, it all started back in early 2000s when sustainability was like a bit of a buzzword, mostly on the fringes. I began my journey in a related agency, working closely with investors and understanding their expectations. Then I moved into a consultant role supporting companies and organizations directly, and even helping them to understand, measure, and act on their ESG risk and opportunities.

And I would say over these past years, I had a front row seat watching sustainability grow from something optional and vague to core part of strategy and long-term business survival and I'm very glad I'm proud of this experience and here we are in 2025 where sustainability is not just expected—it is embedded. Through all this I have the chance to see how companies struggle, but also how they learn, adapt and overcome.

When it comes to materiality, especially double materiality, let me tell you something, it sounds simple on the paper, but in practice it's a real journey. It takes effort, focus, time and resources.

So, let me share with you some examples with common challenges I have seen in my experience companies face and how they move past them.

First one, I will say when we moved from traditional materiality to double materiality. Companies and teams are mixing up what effects a company, and what they affect. So, it's one of the most common mistakes that confusing the two sides of a double materiality. For example, I have some colleagues and clients asking, is it a risk for us? or are we the ones causing the risk? So, this blurred line can make the whole process confusing and unreliable.  We can, for example, help with some training, some real-life examples and breaking things down, clearly for everyone involved in the process.

Second challenge, I will say is when organizations or companies are not seeing the full picture. For example, they only think about what happens inside their own walls, their buildings or their direct teams. The truth is that the biggest ESG impact often happens before or after your core operations, upstream and down streams, which means your suppliers, your logistics, your product tools, disposal, etc. So how can we fix this? We can, for example, zoom out, map our full value chain from raw materials to end of life.

And the third one, third challenge I will say not listening wide enough. I met this challenge very often. Some companies only talk to their internal teams or their usual circle. They don't go beyond that, but actually companies need to hear from the communities, customers, experts, people that are impacted by your activities. So how we can overcome this challenge? We can for example use surveys, interviews, workshops, etc. depending on the size of the company or organization’s activities.

And the last one I will say is creating a matrix that unfortunately no one is using. It's like, for example, companies will go through this all this journey for efforts etc. and then it sits in drawer and they really miss this opportunity. So, I would just suggest to them please turn your matrix into a living tool. Use it as a decision making in reporting in your strategy session and updated every couple of years and make it part of your work and just not in your sustainability report.

21:14 --> 24:21
 Speaker 1 – Catherine Beare, Regional Director - Business Assurance (UK & Iberia)

Great. Thank you, Zineb.

A lot of detail there and we could talk for hours on this, but that is an excellent introduction to what people need to do.

So look, thank you for your time today and helping us understand the growing importance of double materiality in the sustainability space.

But everyone, get in touch because as you can hear, it's complex, but it's interesting and a lot for companies to learn. So, for companies that want to get started or strengthen their processes, here is how we can help you here at Intertek. 

First of all, we can help you with materiality, scoping and mapping, which means we help you identify key impact areas like Zineb explained to us or risks and opportunities through a stakeholder engagement and industry benchmarking exercise.

Then, we can help with matrix development, so we support the creation of a robust double materiality matrix aligned with CSRD and GRI principles, integrating both impact materiality and financial materiality.

Then, we can look at documentation and evidence review, thinking of that credibility point.

We ensure your methodology is auditable, transparent and well documented for both internal and external audiences.

And finally, and importantly, we can offer third party assurance. We provide assurance on your materiality process and matrix helping increase stakeholder trust in your sustainability disclosures.

For more information, get in touch with us, reach out to Zineb, myself, and the team or please do go and visit our website: www.intertek.com/assuris/sustainability 

So look, that concludes today's podcast. Zineb, once again, thank you so much for an extremely insightful podcast and thank you, the listener, for joining us today.

Please do watch out for more episodes from the Assuris team to help you with your sustainability journey.