Despite the regulatory pressure derived from the CSRD, the analysis of double materiality emerges as a strategic tool that contributes to transforming operations and strengthen the company’s capacity for adaptation and sustainable growth.??Visit elEconomista ESG, the green portal of elEconomista.es.
He new European regulatory framework, through the Corporate Sustainability Reporting Directive (CSRD), Has raised a paradigm shift for companies in terms of the way they report and manage aspects related to sustainability (environmental, social and governance).?
A crucial aspect of this regulation is the requirement for double materiality analysis, which forces companies to look not only at how their activities affect the environment and society (impact materiality) but also at how external factors impact their business ( financial materiality).??SMEs will face the greatest challenges with the new ESG standards.
Through the exercise of double materiality, organizations are finding new ways to align sustainability with their business strategy and to financially quantify impacts, risks and opportunities. In our experience accompanying companies to comply with this new regulatory framework, we have identified several key trends that are emerging and transforming the way organizations operate.?
Alignment with business strategy
The dual materiality exercise helps companies focus on what is truly relevant to their sector and their business. By analyzing sustainability from a financial perspective, companies identify and incorporate sustainability risks into their risk map, and opportunities into their strategies, making them stop being external factors without becoming monetized.??
This alignment ensures that financial decisions are in line with ESG objectives, facilitating responsible growth and long-term resilience.??
Active involvement of finance and risk teams?
Financial teams collaborate closely with sustainability departments, allowing the financial effects of risks and opportunities derived from ESG issues to be more precisely quantified, providing greater rigor and clarity in strategic decision making and facilitating informed decisions that promote value. economic and social.?
Greater prominence of the sustainability team?
As sustainability becomes a strategic pillar for business, sustainability teams are taking on a more prominent role within companies. In addition to leading dual materiality analysis, he works closely with other departments and actively participates in steering committees, ensuring that sustainability issues are deeply integrated into all company operations.??
Collaboration in the value chain?
Double materiality analysis is forcing companies to evaluate their impacts not only in their direct operations, but also throughout the entire value chain. This improves collaboration with suppliers and partners to mitigate risks and take advantage of opportunities, encouraging best practices and promoting sustainability initiatives throughout the chain.?
Technology as a lever?
Companies are increasingly turning to advanced ESG data management, predictive analytics and artificial intelligence technologies to efficiently collect, process and report large amounts of data. These technologies not only facilitate regulatory compliance, but also provide greater transparency and the ability to anticipate future risks.??
Greater involvement of boards of directors?
The regulation requires boards of directors to actively monitor ESG impacts, risks and opportunities, and incorporate them as essential components of the corporate roadmap, responding to the demands of investors and stakeholders regarding the integration of sustainability.?
Trust and corporate reputation?
The effective implementation of double materiality analysis is having a positive impact on the trust and reputation of companies. Transparency in sustainability management, combined with the alignment of sustainability with the business plan, reinforces the company’s credibility with investors, consumers and employees.??
Is its value in the continuous application, not just the report?
The double materiality analysis goes beyond regulatory compliance. By integrating it effectively, companies can turn it into a strategic tool to strengthen their resilience, anticipate future regulations (such as the CSDDD), and adapt in times of uncertainty. Instead of being shelved after the report, can it be a catalyst for sustainable growth and long-term competitive advantage?
“Inés Buxeda is a Senior Sustainability and Impact Consultant at Transcendent.”
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