Double materiality

Financial reporting - risk management - materiality - climate change.

Materiality is a threshold at which insignificance becomes significance.

Materiality is also a fundamentally important concept in traditional financial accounting.

Relevant accounting standards, principles and disclosures need only be applied to material items.

Double materiality is a concept in climate reporting.

It extends the concept of material items to include not only (1) the impact of climate on the reporting company, but also - and additionally (2) the impacts of the company on the climate.

The consequence is that the nature and number of items that must be disclosed is significantly increased.

See also

• Climate change
• Financial reporting
• Guide to risk management
• Immaterial
• Material adverse change
• Material adverse effect
• Material by nature
• Materiality
• Misstatement
• Risk management