When most people hear “double materiality assessment,” their minds go straight to regulation — specifically, the EU’s Corporate Sustainability Reporting Directive (CSRD). Stricter EU regulations are raising the bar for corporate transparency and forcing companies to focus on what is material to their business in their reporting. But instead of sighing at another regulatory requirement, we’ve found the process can be surprisingly energizing and engaging. At thinkPARALLAX, we’re seeing clients discover that a double materiality assessment (DMA) is far more than a compliance exercise. Done right, it’s a powerful tool for clarifying strategy, surfacing core values, aligning internal teams, and fostering more genuine connections with stakeholders.
CSRD-aligned:
If your company falls under CSRD, a DMA isn’t optional — it’s the foundation of your report. Reporting will be phased in across four “waves”:
Recent EU adjustments — including exposure drafts of revised standards released in mid-2025 — have shifted deadlines and clarified requirements. The message remains clear: companies in scope must assess and report on sustainability topics that are most material to their business and stakeholders. For a deeper dive on the amended exposure drafts, see our ESRS 2.0: Roadmap to the Latest Updates.
To help companies navigate the complex and evolving requirements of the CSRD, the European Sustainability Reporting Standards (ESRS) were developed by EFRAG (European Financial Reporting Advisory Group) to provide a clear and consistent framework for sustainability reporting. Mandated under CSRD, ESRS provide clear guidance on what to report and how to apply the double materiality principle, requiring companies to assess issues through a two‑pronged lens:
EFRAG’s Double Materiality Conceptual Guidelines (issued in 2022 and subject to refinement once EFRAG’s updates are implemented) clarify how to determine material topics, emphasizing significance, stakeholder relevance, and public-interest transparency. In practice, CSRD-aligned companies must follow the ESRS framework to conduct a DMA and disclose both impact and financial materiality.
Click here for a refresher on navigating CSRD and preparing for reporting.
Non-CSRD Aligned:
Companies outside CSRD’s scope can still benefit from conducting a DMA. Even in the absence of strict regulatory mandates, the process helps to prioritize the topics most material to their business, supply chains, and stakeholders. This allows them to proactively anticipate risks and opportunities, build strategies that strengthen resilience — without waiting for policymakers to dictate the process.
Traditionally, sustainability reporting has focused on impact materiality, while financial reporting under International Financial Reporting Standards (IFRS) has focused on financial materiality. The ESRS uniquely integrates both perspectives. From our perspective, using both lenses doesn’t significantly lengthen the process — and ultimately delivers a richer, more holistic understanding of what truly matters to the business and its stakeholders.
This approach also enables companies to align with peers and evolving market expectations. It signals to stakeholders that the organization is taking a proactive sustainability approach — and can, if desired, position the company as a leader in its sector. This alignment strengthens credibility, enhances competitive positioning, and better prepares companies for potential future regulatory requirements.
Whether companies are acting to meet regulatory requirements or voluntarily to strengthen resilience, double materiality is becoming an essential business practice, propelled by market forces, investor expectations, and the need for forward-looking strategies:
Taken together, these trends show that sustainability isn’t optional — it’s integral to future business success. And double materiality is the framework that bridges compliance with strategic advantage.
Why you would want to work with us
A DMA can feel daunting — complex, time-consuming, and, at times, overwhelming. But it doesn’t have to be a dry, box‑checking exercise. Nor should it be. We’ve helped both CSRD‑aligned companies and those pursuing non-mandated approaches turn the process into a clear, purposeful, and impactful strategic exercise.
Whether driven by regulatory requirements or voluntary ambition, our approach simplifies complexity and delivers tangible value. We break the process into three practical phases:
Our Difference
Impact We’ve Seen
Investors and other stakeholders involved in the process have recognized the value of our approach. For example, one investor shared during a stakeholder interview for a client’s DMA that they deeply valued the company’s commitment to the process: “It’s setting a higher standard among their portfolio companies and positioning the company ahead of competitors.”
Clients have also told us the process has reshaped how they think about sustainability in their work and lives — noting that “participating in the DMA sparked new perspectives and meaningful changes in their day-to-day decision-making.”
For sustainability leaders, this kind of recognition reinforces that a DMA is not just about compliance — it’s a strategic tool for credibility, influence, and long-term differentiation.
So yes — conducting a DMA will ensure you comply with CSRD, stay ahead of evolving regulations across the EU, U.S., and beyond, and meet growing stakeholder expectations for ESG transparency. More importantly, it delivers clarity on what truly matters to your business, unites teams in collaboration, and transforms sustainability reporting into a living process that sparks innovation, sharpens strategy, and energizes your organization.