Under CSRD, an issue is considered material if it meets the definition of impact materiality, financial materiality, or both.
Materiality is the cornerstone of sustainability reporting under the ESRS. Unlike financial reporting, where materiality is assessed solely from an investor perspective, CSRD applies a double materiality lens that considers both the company's impact on society and the environment, and the financial effects of sustainability issues on the business. Companies must apply materiality thresholds to determine which of the ten topical ESRS standards require disclosure. This assessment must be documented, auditable, and based on stakeholder input.
Explore how to conduct a materiality assessment for CSRD and read our guide on the European Sustainability Reporting Standards to understand how materiality drives your reporting scope.
See how Coolset helps companies with materiality assessments and CSRD reporting →
