The double materiality assessment (DMA) is the mandatory starting point for CSRD compliance. It determines which sustainability topics are material for your company, which in turn determines the full scope of your ESRS disclosures. Without a complete and defensible DMA, you cannot know what to report or defend your reporting choices to an auditor.

This step-by-step guide explains how to conduct a double materiality assessment for CSRD in 2026, incorporating the simplifications introduced by the Omnibus I Directive and the amended ESRS.

What has changed for the DMA in 2026

The Omnibus I Directive and EFRAG’s ESRS simplification process have made several changes relevant to the DMA:

• The top-down DMA approach is now explicitly encouraged — companies can start with sector-level impacts and filter down rather than assessing every topic from scratch
• Materiality thresholds have been clarified to focus on truly significant impacts, risks, and opportunities rather than exhaustive coverage
• The stakeholder engagement requirement is maintained but the process has been simplified for smaller in-scope companies
• The amended ESRS reduces the number of mandatory data points, meaning fewer topics need to be reported even if assessed as material

For a full overview of what changed in the ESRS, see our guide to the amended ESRS under Omnibus.

Step 1: Understand the DMA framework

Double materiality requires assessing sustainability topics from two angles:

• Impact materiality (inside-out): How your company's operations, supply chain, and products affect people and the environment
• Financial materiality (outside-in): How sustainability issues create financial risks or opportunities for your company

A topic is material if it is significant on either dimension. Topics material on both dimensions are doubly material.

Step 2: Map the ESRS topic landscape

Start with the full list of ESRS topics: E1–E5 (environmental), S1–S4 (social), and G1 (governance). For each topic, document:

• The specific subtopics and sub-subtopics covered by the ESRS
• What impacts your company has on each topic through own operations and value chain
• What financial risks or opportunities the topic creates for your company

Using a structured template for this mapping prevents gaps and makes the process auditable.

Step 3: Conduct stakeholder engagement

ESRS 1 requires companies to demonstrate that their DMA reflects stakeholder input. Stakeholders include internal stakeholders (employees, management, board), external stakeholders affected by your operations, and investors or lenders with financial interests.

Engagement can take various forms: workshops, surveys, interviews, or consultation of stakeholder representatives. Document the engagement: who was consulted, when, what input they provided, and how it influenced your materiality conclusions.

Step 4: Assess impact materiality

For each topic, assess whether your company has material impacts. The assessment criteria under ESRS 1 include:

• Scale: How severe is the impact?
• Scope: How many people or how much of the environment is affected?
• Irremediability: How hard is it to reverse the impact?
• Likelihood: For potential impacts, how likely are they to occur?

Document your scoring for each topic and the evidence or rationale behind your conclusions.

Step 5: Assess financial materiality

For each topic, assess whether it creates financial risks or opportunities. Consider:

• Transition risks: regulatory, market, technology, and reputational risks from the transition to a sustainable economy
• Physical risks: climate-related physical impacts on assets, operations, or supply chains
• Opportunities: cost savings, new markets, improved access to capital

Assess significance in terms of potential financial magnitude and likelihood over relevant time horizons.

Step 6: Apply thresholds and determine material topics

A topic is material if it meets the significance threshold on either the impact or financial dimension. Document your threshold methodology and apply it consistently across all topics.

The result is a list of material topics that determines your ESRS reporting scope. Topics assessed as not material should be briefly documented with rationale, as auditors will ask why they were excluded.

Step 7: Map material topics to ESRS standards

Translate your material topics into the applicable ESRS standards and disclosure requirements. This is the bridge between the DMA and your data collection plan.

Step 8: Document everything

The DMA documentation is itself a disclosure requirement under ESRS 1. You must be able to demonstrate the process you followed, the input you received, and the rationale for your conclusions. This documentation also forms the basis for your auditor’s review.

Maintaining your DMA over time

The DMA should be reviewed annually. As your business changes, stakeholder expectations evolve, or new regulations emerge, the material topics for your company may shift. Document any changes and the rationale for updating your materiality conclusions year-over-year.

How Coolset supports DMA in 2026

Coolset provides a structured DMA workflow that guides sustainability teams through each step, from topic mapping and stakeholder engagement to materiality scoring and ESRS mapping. The platform reflects the updated ESRS requirements following the Omnibus I Directive and generates audit-ready documentation throughout. For an overview of the CSRD compliance roadmap, see our guide on CSRD compliance roadmap. Book a demo to see it in action.