Double Materiality Assessment - All you need to know

Introduction

Double Materiality Assessment (DMA) is a rapidly evolving concept in the world of corporate sustainability and risk management. It is becoming an increasingly important tool for investors, regulators, and companies to understand and manage both financial and non-financial risks. It aids in understanding how a company's operations impact the society and environment and how these factors, in turn, affect the company's financial performance. This dual perspective allows for a more thorough risk assessment, which is particularly beneficial in the context of sustainable investing.

What is Double Materiality Assessment?

The concept of DMA originated from the European Union’s Non-Financial Reporting Directive (NFRD). It is an approach to evaluate the impact of a company on the environment and society, and vice versa. The "double" in DMA refers to these two aspects: the impact of environmental and social issues on a company's financial performance (outside-in perspective) and the impact of a company's activities on the environment and society (inside-out perspective). Essentially, it helps to identify both the risks a company might face due to environmental or social issues, and the potential impacts of its operations on the environment and society.

How do you conduct a double materiality assessment? Read the full article here at https://www.esgflo.com/blog-articles/double-materiality-assessment.