Impact assessment evaluates how a company's activities affect people and the environment. It is a core element of the double materiality approach in CSRD, where companies must examine both actual and potential impacts across their operations and value chain to determine what must be disclosed in sustainability reporting.
Under ESRS, impact assessments must consider the severity of impacts (scale, scope, and irremediability) and the likelihood of potential impacts. Companies are expected to assess impacts on their own workforce, workers in the value chain, affected communities, and consumers. The assessment should cover the full value chain and consider both positive and negative effects, helping organizations prioritize the most significant sustainability topics for reporting.
Learn how to conduct a comprehensive double materiality assessment for CSRD and explore our guide on the European Sustainability Reporting Standards (ESRS) to understand the full disclosure requirements.
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