As sustainability reporting requirements increase under the Corporate Sustainability Reporting Directive (CSRD), many organisations are finding the Double Materiality Assessment (DMA) to be one of the most complex and time-consuming steps. At first glance, it may appear to be a resource-intensive exercise, demanding deep engagement with both internal and external stakeholders, a comprehensive understanding of the value chain, and a detailed analysis of impacts, risks, and opportunities. Yet when approached strategically, the Double Materiality Assessment can become more than a compliance task: it lays the groundwork for a faster, more focused reporting process, ensures consistency across disclosures, and helps organisations prioritise what truly matters.
In this article, we explore how early alignment between the Double Materiality Assessment and the ESRS framework can enhance reporting efficiency, reduce duplication, and help ensure consistency across disclosures, turning the DMA into a valuable starting point for the CSRD reporting process. This article does not aim to explain the detailed methodological requirements for conducting a DMA under the CSRD. Instead, it highlights how having an early understanding of key elements within the European Sustainability Reporting Standards (ESRS) can make the DMA more effective and efficient, especially by ensuring that the outputs are compatible with CSRD reporting from the very start.
Avoiding Duplicate Work: How Knowing the ESRS Can Streamline Your DMA
Being familiar with the content and structure of the ESRS before launching your DMA can significantly streamline the process and improve its alignment with CSRD expectations. This proactive approach not only reduces the risk of having to redo or retrofit your analysis later, but also ensures that the DMA captures all relevant impacts, risks and opportunities in a way that directly feeds into ESRS-compatible reporting.
A Starting Point for ESRS Reporting
Beyond informing the content of the CSRD report by identifying material topics, the DMA process itself is a subject of reporting under the ESRS. Several disclosure requirements relate directly to how the DMA is conducted, making it a natural starting point for the overall reporting exercise. For instance, ESRS 2 IRO-1 requires companies to disclose their process for identifying impacts, risks, and opportunities, essentially capturing the DMA methodology. The outcomes of that assessment (i.e., the list of material IROs), reported in ESRS 2 SBM-3, then become the cornerstone of the entire report, as they determine which topical standards and disclosure requirements apply.
But it doesn’t stop there. In the next section, we’ll explore a few concrete ways in which ESRS familiarity can enhance the quality and efficiency of your DMA.
Turning Your DMA Into a Reporting Asset
When defining the DMA boundaries, the decisions you make about which entities and operations are in scope, and at what level of disaggregation, are not only foundational for the assessment, but they also inform the Basis for Preparation (BP-1 & BP-2) disclosures. Aligning the DMA scope with your intended reporting boundaries from the start avoids the risk of misalignment and ensures full compliance with ESRS 1 chapter 3.7, which requires consistency in how information is aggregated or disaggregated in both the DMA and the report.
Similarly, one of the very first steps in a DMA is to understand the context in which the undertaking operates. This goes beyond a general company profile and involves gathering structured information on the business model, strategic priorities, key stakeholders, and value chain. These are core elements of Disclosure Requirement SBM-1 (Strategy, Business Model, and Value Chain) in ESRS 2 - General Disclosures.
In practice, this often requires collecting internal data such as NACE codes, sector classifications, geographic footprint, and revenue breakdowns by activity. Taking the time to document these elements carefully and with the ESRS structure in mind doesn’t just support a thorough DMA, it also lays the groundwork for smoother reporting later, as these data points will resurface in ESRS 2 SBM-1. In short, early alignment and efficient documentation here can save considerable time and effort down the line.
When it comes to identifying impacts, risks, and opportunities (IROs), the relevance to reporting becomes even more pronounced. The list of IROs is the cornerstone of CSRD compliance, dictating which ESRS topical standards must be applied. These IROs feed directly into SBM-3, IRO-1, and several topical disclosures. By aligning this identification phase with ESRS-specific priorities (e.g., identifying water-stressed areas or biodiversity-sensitive areas), the organisation can ensure reporting is compliant from the start.
The scoring and prioritisation process is often where materiality thresholds are applied and justifications for topic inclusion or exclusion are developed. These justifications are essential not only for transparency in SBM-3 and IRO-1, but also for meeting the financial effect disclosures, which, even if phased in during the first year, will require solid evidence when in full effect. Preparing this information upfront (whether qualitative or quantitative) avoids scrambling for documentation later.
Stakeholder engagement, often conducted during the DMA to inform prioritisation, provides key insights for SBM-1 and SBM-2, which require disclosure of how stakeholders’ views were considered. If engagement activities are aligned with due diligence processes and well-documented, they can serve a dual purpose: informing both the DMA and required reporting content.
Finally, the documentation and scoping work completed at the end of the DMA becomes invaluable for reporting. The final list of material topics, including those deemed immaterial, feeds directly into IRO-2 and helps determine which topical standards must be reported on and which can be omitted. Having this well-organised means you not only meet transparency requirements, but also create a clear audit trail for internal review or external assurance.
An Efficient DMA to Save Time Down the Line
All these examples highlight the value of early familiarity with the ESRS requirements when conducting a DMA. Not only does it enhance the accuracy of reported information, but it also saves time by simplifying the scoping of data points and the development of key building blocks of the sustainability report. Treating your DMA as an integrated part of the reporting process can ensure stronger regulatory alignment and reduce internal confusion. Rather than reinventing the wheel at the reporting stage, organisations can build the report from the very process that helped them determine what matters most.
How can Greenomy Help?
Partnering with sustainability experts like Greenomy can make all the difference. Our team provides tailored guidance to help you navigate the complexities of double materiality, ensuring you not only meet regulatory expectations but also extract strategic value from the process.
Greenomy’s innovative CSRD solution streamlines data collection and reporting, laying a strong foundation for accurate, efficient disclosures. Complementing this, our Sustainability Advisory services offer expert-led support to kickstart and structure your Double Materiality Assessment with confidence and clarity.
Book a demo to explore how we can help you turn compliance into a catalyst for long-term sustainability impact.
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