Challenges of Double Materiality on the European Sustainability Reporting Standard
Challenges of Double Materiality on the European Sustainability Reporting Standard

Author(s): Isabelle Martinez, Jennifer Boutant, Mahsa Ghorbanijazin
Subject(s): Politics / Political Sciences, Politics, Economy, Business Economy / Management, EU-Approach / EU-Accession / EU-Development, Accounting - Business Administration, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: non-financial reporting; materiality; double materiality; ESRS; Corporate Sustainability Reporting Directive (CSRD)
Summary/Abstract: This study examines the diverse stakeholder viewpoints expressed in comment letters submitted during the public feedback period for the European Sustainability Reporting Standards (ESRS) Exposure Draft. The content analysis reveals a range of perspectives on the double materiality approach introduced by the Corporate Sustainability Reporting Directive (CSRD), which requires companies to assess and report on both the impacts of their activities on environmental and social matters (impact materiality), as well as the financial risks and opportunities arising from sustainability issues (financial materiality). Several themes emerged from the analysis, including concerns about the complexity and ambiguity of the double materiality concept, the potential for greenwashing and selective disclosure, challenges in measuring and quantifying impact materiality, and debates around the appropriate scope and boundaries for impact assessments. Stakeholders also highlighted the need for clear guidance, standardization, and alignment with existing frameworks to ensure consistent and comparable reporting practices. The identified themes provide insight into the diverse perspectives on materiality as discussed in the ESRS.

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