CSRD stands for Corporate Sustainability Reporting Directive and is being implemented as law in Europe as per 2024. It mandates big companies first to report on certain sustainablity markers.
To be able and report in alignment with the new CSRD legislation, the reporting entity has to start with a so called “Double Materiality Assessment”. On top of financial materiality, the entity assesses also the possible material impacts it could have on the outside world: the environment and society.
One of the most important and foremost steps to take in it’s due diligence process, the reporting entity has to map their upstream and downstream value chain. In it, it’s most important stakeholders, relationships, risks, opportunities and impacts are indicated. This will form a long list of topics that could be rendered material for the entity.
In the Double Materiality Assessment, based on professional judgement and stakeholder validation, a short list of material topics is plotted (usually on a matrix). Main goal of this exercise is to prioritise and arrange the material topics in such a way the entity can form a solid strategy and also conclude what indicators to start monitoring and reporting.