At the core of the final European Sustainability Reporting Standards (ESRS) is the concept of double materiality, which mandates reporting on material impacts, financial risks, and opportunities across environmental, social, and governance dimensions. Companies are required to report exclusively on matters deemed material from both financial and impact standpoints, omitting non-material issues from disclosure.
From our perspective, ESRS interweaves two vital concepts:
1. Double Materiality: Aligned with ESRS requirements, while still granting reporting companies the autonomy to determine materiality.
2. Stakeholder-Driven Transparency: Transparent disclosure empowers stakeholders to assess the information provided and form their own perceptions regarding the organization’s actions, impact, and commitment to sustainability.
This integrated approach requires organizations to genuinely and responsibly conduct their double materiality assessments. Its acts as a safeguard against potential information manipulation.
Furthermore, the verification and assurance process by independent third-party validation, enhances the integrity of the reported data, confirming its accuracy and credibility.
In our view, this strategic merging reflects a clever choice that encourages responsible and precise sustainability information sharing, with the potential to driving tangible actions. 🌎 ❤️