Double materiality

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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