Under CSRD and ESRS, a matter is materially impactful if it has significant positive or negative effects on people or the environment across a company's operations, value chain, products, or services — over the short, medium, or long term.
Impact materiality is one of the two dimensions of double materiality required under CSRD. To determine impact materiality, companies assess the severity of actual impacts (based on scale, scope, and irremediability) and the likelihood of potential impacts. This assessment must cover the company's own operations as well as its upstream and downstream value chain. Topics assessed include environmental impacts (climate, pollution, biodiversity), social impacts (labor rights, community effects), and governance factors.
Explore how to conduct an impact materiality assessment for CSRD and read our guide on the European Sustainability Reporting Standards to understand the full assessment methodology.
See how Coolset helps companies with impact materiality assessments and CSRD reporting →
