The first wave of Double Materiality Assessments (DMAs) began emerging around 2022-2023, as companies subject to the Corporate Sustainability Reporting Directive (CSRD) navigated new terrain and produced disclosures that — for many — represent the most comprehensive sustainability reporting they have ever undertaken. That is no small achievement.
But the DMA is not a one-and-done exercise. As reporting cycles mature and regulatory expectations sharpen, the question is no longer whether to refresh your DMA — it is how to do it better this time around.
For many companies, materiality assessments were historically conducted roughly every three years, aligned to a strategy cycle and considered largely settled in the intervening period. The European Sustainability Reporting Standards (ESRS) have changed this fundamentally. The requirement to assess and disclose impacts, risks and opportunities (IROs) across a broad range of environmental, social and governance (ESG) topics means that materiality is increasingly a living process rather than a fixed output. The European Financial Reporting Advisory Group (EFRAG) guidance makes clear that companies should monitor and update their materiality conclusions when circumstances change (EFRAG).
This shift asks something different of organizations: not just the capacity to conduct a rigorous assessment, but the infrastructure to maintain one. The challenge is building a process that is genuinely ongoing without becoming so burdensome it consumes the organization. The goal is agility, not over-engineering.
Analysis of early ESRS-aligned disclosures reveals a striking pattern: most companies relied predominantly on internal expertise when identifying and assessing their IROs, with external voices largely absent. This is understandable — the first DMA was, for most organizations, an exercise in survival. But internal perspectives, however expert, carry the blind spots of the business and the absence of the people most likely to be affected by a company's activities.
Research supports this concern. A 2025 analysis by EFRAG found that the majority of companies conducting ESRS-aligned assessments still relied heavily on internal stakeholder input, with external stakeholder engagement limited in scope and depth.
The ESRS are explicit: companies must disclose if and how affected stakeholders were engaged in the materiality assessment process (ESRS 2, IRO-1). This is not a formality — it reflects the understanding that you cannot credibly assess your impact on people and the planet without talking to people.
The ESRS distinguishes between stakeholders who are affected by a company's activities and those who are interested in them. Affected communities, value chain workers, and vulnerable groups are the voices that should shape an impact assessment. Yet in Wave 1, many companies conflated stakeholder engagement with conversations with investors and trade bodies. Now that companies are finding their footing with ESRS, it is time to be brave and engage more meaningfully. The UN Guiding Principles on Business and Human Rights are clear that engagement with those at risk of harm is foundational to credible impact assessment.
Companies that approach their DMA refresh with genuine openness to external perspectives will not only produce more credible disclosures but generate better business intelligence, too.
There is a second challenge: the ever-changing nature of IROs themselves. While broad topics tend to maintain their materiality, the specific impacts, risks, and opportunities within them are in constant motion. Regulatory shifts, technological disruption, and evolving social expectations mean the IRO landscape looks quite different today than it did two years ago.
Consider responsible AI. In 2023, AI-related risks were featured in fewer than 12% of corporate materiality assessments, according to the Harvard Law School Forum on Corporate Governance. By 2024, the WEF Global Risks Report had elevated AI-related risks into the top tier of global concerns. Today it is a pressing topic across almost every sector.
The answer is not to produce a definitive materiality map and defend it for three years. It is to build a process designed to evolve, with agility to incorporate emerging topics and update stakeholder engagement as circumstances change.
Be brave. Engage meaningfully with external stakeholders, including those whose perspectives may challenge your assumptions. The ESRS require you to explain your approach, and a disclosure built on internal views alone will no longer be sufficient, nor will it reflect the genuine spirit of the standards.
Be agile. Build lightweight, scalable mechanisms: regular horizon-scanning to identify emerging IROs, a standing stakeholder engagement program that generates continuous insight, and governance structures that allow materiality conclusions to be updated without a full reset. When responsible AI moved from niche concern to mainstream materiality in two years, agile companies adapted. Those with static, infrequently reviewed assessments were caught unprepared.
At thinkPARALLAX, we have built an agile, technology-backed DMA process designed for this evolving landscape — supporting the ongoing identification of impacts, risks, and opportunities without overwhelming the organizations that depend on it.
We work with organizations to establish the right DMA infrastructure: governance structures, methodologies, and workflows built to last. Our technology-enabled approach ensures your initial identification of material topics and IROs is comprehensive, current, and grounded in evidence. We design and facilitate meaningful stakeholder engagement that reaches affected communities and value chain workers, helping companies be brave in their engagement and structured enough to turn it into actionable insight. And our ongoing DMA refresh service keeps clients apprised of the latest emerging topics, regulatory developments, and shifting stakeholder expectations on a continuous basis.
The DMA does not have to be a source of anxiety. With the right process, the right tools, and the right partners, it becomes one of the most valuable strategic exercises a company can undertake.
Key references: EFRAG | GRI | ESRS 2 General Disclosures | UN Guiding Principles on Business and Human Rights | WEF Global Risks Report | Datamaran