The CSRD introduces mandatory sustainability reporting obligations for a broader range of companies, including large and listed companies, and extends reporting requirements to cover a wider range of environmental, social, and governance (“ESG”) issues. It aims to improve the transparency, comparability, and reliability of sustainability information disclosed by companies, thereby enabling stakeholders to make more informed decisions, and fostering sustainable business practices.
The CSRD requires businesses to conduct a "double materiality" assessment as part of their reporting process. Double materiality encompasses two dimensions: financial and impact. Financial materiality concerns outside-in ESG risks and opportunities that emerge from the outside world, affecting the financial position of the company. Impact materiality concerns inside-out positive and negative impacts arising from the business, which affects the outside world.
Although the CSRD offers some guidance, companies hold ultimate responsibility for determining ESG materiality and providing substantiation for their decisions. Need more information?
Our panel of experts delved into the intricacies of conducting a thorough double materiality assessment. To access this webinar on-demand:
