Double materiality assessment

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Financial reporting - risk management - ESG - sustainability reporting - European Sustainability Reporting Standards (ESRS).

In the context of sustainability reporting, a double materiality assessment is one that covers material information about both:

(1) A reporting entity's impact on people or the environment ("impact materiality") and
(2) Financial risks or opportunities relating to a sustainability matter ("financial materiality").

For reporting purposes, a matter is material if it falls into either of these categories.

The European Sustainability Reporting Standards (ESRS) approach to materiality
"The ESRS require that the sustainability statement include sustainability information related to material IROs identified through a materiality assessment process that applies the principles of double materiality...
The terms ‘material’ and ‘materiality’ are used throughout the ESRS to refer to double materiality unless otherwise specified."
EFRAG Implementation Guidance - Materiality Assessment - p9.

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