The DMA expands on the traditional materiality concept by considering two distinct but interconnected manners of looking at impact.

A traditional Materiality Assessment is focused on an outside-in perspective. The objective is to understand how external ESG factors, such as regulatory changes or shifting consumer preferences, may affect your company’s resilience and performance. This is also called Financial Materiality.

Expanding on that, a DMA adds the extra dimension of an inside-out perspective. The objective is to examine how your activities as an organisation affect the environment, society and broader stakeholders, regardless of financial implications. It requires you to assess your contributions, both positive as well as negative, to topics like climate change, biodiversity, human rights and (community) well-being. This is also called Impact Materiality.

In summary, it helps you understand the key areas of focus to become a sustainable organisation, balancing the scale between People, Planet & Profit.

Clarifying your priorities through the lenses of Double Materiality enables you to:
– Meet regulatory expectations by reporting on the Disclosure Requirements that relate to your identified material matters.
– Identify the key areas for data collection, allowing you to make decisions in a data-driven manner as well as open up possibilities for scenario forecasting of action plans to achieve internally or externally defined targets.