Double materiality explained:

How to achieve double materiality in Datamaran

4 February 2021,  3.30pm GMT (4.30pm CET, 10.30am ET)

Materiality as an accounting principle is evolving. The concept of double materiality is one important example. 

First introduced by the EU Commission as part of the Non-Binding Guidelines on Non-Financial Reporting Update (NFRD), double materiality speaks to the fact that risks and opportunities can be material from both a financial and non-financial perspective. In other words, issues or information that are material to environmental and social objectives can have financial consequences over time. Take public health and climate change as prime examples.

That doesn’t mean that double materiality is twice as challenging to achieve. You only need to ensure that the materiality process itself is data-driven, dynamic, and context-driven, taking into consideration a wider scope of external data. 

Wacth live session led by Datamaran experts Matt Peacock and Roxanne Sharif to see how you can achieve double materiality with Datamaran.

  • Learn about what double materiality means in practice
  • See how you can run double materiality analysis in real time using Datamaran’s patented technology
  • Understand how Fortune 500 companies use the Datamaran approach to proactively meet rising investor and regulatory expectations, including those outlined in the EU Sustainability Standards, the NFRD revision, the IFRS consultation.

“This is a very delicate moment for many businesses, and the return on investment is very important. With Datamaran, we are able to conduct our materiality assessment in a faster and cost-efficient way. The platform allows us to explore double materiality, or social and environmental issues which are clearly impacting businesses today.”

Elisa Moscolin, Head of Sustainability and CSR, Santander UK

What is double materiality? And why is it important for business leaders?

Double materiality ensures a comprehensive approach to the identification of relevant risk and opportunities. Its first perspective looks into potential or actual impacts of ESG-related risks and opportunities on the “performance, development and position” of the company – usually indicated as “financial materiality”, with an investor type of audience. The other side refers to the “external impacts of the company’s activities” – labeled as “environmental & social materiality”, whose audience consists of consumers, civil society, employees, and investors too.

But what does it mean for corporate leaders? How can they put the concept into practice? Watch the live discussion to better understand the notion of double materiality and discover how patented technology makes analysis possible.

Datamaran submission to the NFRD public consultation

On 10 June 2020, Datamaran responded to the European Commission on Non-Financial Reporting Directive, focusing on the application of the materiality principle.

Our response can be articulated on four main pillars:

  • Materiality shouldn’t be considered exclusively as a reporting activity, but should be regarded as the foundation for a more complete strategic risk management process.
  • Technology has a dramatic impact on resource efficiency while ensuring accuracy of analysis, quality and auditability of data, and comprehensiveness of insights.
  • ESG rating agencies or investors should take into account a company’s materiality determination process, and not penalize lack of disclosure on non-material indicators.
  • Data driven materiality, based on a robust standardized procedure, would allow to move beyond idea that companies’ accountability consists in along list of indicators to disclose on, and bring it back where it belongs - to the Board.
  • About Datamaran

    Datamaran is the only software analytics platform in the world that identifies and monitors external risks, including ESG. Trusted by blue-chip companies and top tier partners, it brings a data-driven business process for external risk and materiality analysis. In house - at any time. 

    Datamaran’s patented technology offers real-time analytics on strategic, regulatory and reputational risks, specific to your business and value chain.

    Companies worldwide use Datamaran to:

    • Gain a clear view of risks and opportunities tied to ESG, geopolitical, technology and emerging issues - with the power of patented technology;
    • Monitor these material and emerging risks through live dashboards; and 
    • Strengthen risk management, Board oversight and annual reporting with credible data and real-time insights. 
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