Double Materiality Assessment Template (CSRD, ESRS)

Double Materiality Assessment: [Undertaking or group name] [Financial year]

A working document that records how an undertaking identified its sustainability impacts, risks and opportunities (IROs), assessed them for impact materiality and financial materiality, and decided which sustainability matters and topical standards its sustainability statement must cover. Based on the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) as amended by the Omnibus I Directive (Directive (EU) 2026/470), and on ESRS 1 "General requirements" and ESRS 2 "General disclosures" in Commission Delegated Regulation (EU) 2023/2772 as amended by Commission Delegated Regulation (EU) 2026/1563 of 3 July 2026 (the simplified ESRS). Replace every [bracketed] value and every row marked Example. This is a document format, not legal, accounting, audit or sustainability advice. Obtain the Official Journal text and your national transposition for the normative requirements.

Document control

Approvals

Revision history

Contents

1. Scope, reporting basis and applicability
2. Business model and value chain
3. Stakeholder engagement
4. Identification of impacts, risks and opportunities
5. Impact materiality assessment
6. Financial materiality assessment
7. Thresholds and consolidation of results
8. Material matters and topical standards
9. Link to ISSB and other frameworks
10. Data, evidence and assurance readiness
11. Governance and sign-off
12. Change log and next review
13. Glossary and references

1. Scope, reporting basis and applicability

The double materiality assessment is the gateway to the sustainability statement. It decides which sustainability matters the statement covers and which topical disclosures can be omitted. Before scoring anything, the preparer must establish whether reporting is mandatory, which entities are in the consolidation scope, and which version of the European Sustainability Reporting Standards applies to the period.

The Omnibus I Directive (Directive (EU) 2026/470) narrowed the scope of the Corporate Sustainability Reporting Directive. It was published in the Official Journal on 2026-02-26 and entered into force on 2026-03-18, and Member States must transpose it by 2027-03-19. Under the amended rules, an undertaking (or a group, on a consolidated basis) is in scope where it has on average more than 1,000 employees and a net turnover above EUR 450 million. Third-country groups are covered where their net turnover generated in the Union exceeds EUR 450 million, with a further threshold of EUR 200 million for their EU subsidiaries or branches. Which test applies depends on where the ultimate parent is established: an EU parent applies the group test to its consolidated figures, a parent outside the EU (including a UK parent) falls under the third-country test, and each EU subsidiary also applies the undertaking test to its own figures. The amended scope applies to EU undertakings for financial years beginning on or after 2027-01-01; the first year for third-country groups is later (check the transitional provisions of Directive (EU) 2026/470). Undertakings that reported from FY2024 under the original first wave and fall below the new thresholds may be exempted for FY2025 and FY2026 where their Member State uses that option. Check the consolidated text of Directive 2013/34/EU and the national transposing law for the exact criteria and dates that apply to you.

The simplified ESRS were adopted by the Commission on 2026-07-03 as Delegated Regulation (EU) 2026/1563, published in the Official Journal on 2026-09-21, and in force from 2026-11-10. They apply at the latest to financial years beginning on or after 2027-01-01. For a financial year beginning in 2026, an undertaking may keep the 2023 ESRS, apply the 2023 ESRS with certain reliefs from the amending regulation, or apply the revised ESRS early, and it must state which option it used. The double materiality principle itself is retained in the revised set; the process description was clarified and a top-down approach is encouraged. Check the revised ESRS 1 for the current paragraph numbering before you quote paragraph references in the statement.

Undertakings outside the scope may report voluntarily. The Commission adopted a voluntary standard on the same day (Delegated Regulation (EU) 2026/1560, in force 2026-09-24), based on the VSME recommendation. The amended Directive also introduces a value-chain cap: an in-scope undertaking may not require from value-chain undertakings with up to 1,000 employees information beyond what the voluntary standard contains, and the cap first applies to financial years beginning on or after 2027-01-01.

Example: Corvid Commerce Group meets neither the employee criterion nor the turnover criterion; its parent is a UK company, so the third-country test applies and is not met, and CC-DE alone is far below the undertaking test. Corvid is therefore not required to report under the CSRD. It runs a full DMA voluntarily because its revolving credit facility carries a sustainability-linked margin, two in-scope enterprise customers request ESRS-consistent emissions and data-protection information, and the board wants a single materiality basis for both European and ISSB-style investor reporting. Because Corvid has fewer than 1,000 employees, it may rely on the value-chain cap and limit what it gives in-scope customers to the content of the voluntary standard; it chooses to answer its key customers' questionnaires in full because the same data feeds its own statement. Its UK climate disclosures under the listing rules are covered in ISSB Sustainability Disclosure (finance/issb-sustainability-disclosure).

2. Business model and value chain

Describe how the undertaking creates value and where its activities touch people and the environment. Most of the impacts of a software and commerce business sit outside its own walls: in data centres it does not own, in factories that assemble the point-of-sale terminals it rents to merchants, in the delivery networks that move parcels and in the hands of merchants who process consumer data through its platform. The value-chain map is therefore the first piece of evidence the assurance provider will test for completeness.

Use one row per value-chain stage and record whether the undertaking has direct operational control, a contractual relationship or only an indirect link. That distinction matters later because impacts the undertaking causes are scored differently from impacts it is linked to through business relationships, and because the data available differs sharply between stages.

Record the sources used for the map: procurement spend data, the supplier register, cloud invoices, carrier contracts and the customer contract base. Note any stage where data is thin and say how you compensated, for example through sector studies or supplier interviews. Under the amended rules, the scoping of value-chain information may rely on information that is reasonably available, and the record should show what was reasonably available and what was not.

3. Stakeholder engagement

Stakeholders fall into two groups. Affected stakeholders are people whose interests are or could be affected by the undertaking's activities and business relationships, such as workers in supplier factories or consumers whose data is processed. Users of sustainability statements are people who rely on the report, such as investors, lenders and business partners. Impact materiality draws mainly on the first group; financial materiality draws mainly on the second. Where affected stakeholders cannot speak for themselves, such as nature, use credible proxies like scientific data or civil-society organisations, and say so.

Plan engagement to be proportionate and repeatable. A first-time DMA usually combines interviews with internal experts, a structured survey of a sample of external stakeholders, desk research of sector risk sources and, where risks to people are significant, direct dialogue with worker representatives or credible proxies. Record dissenting views and how you treated them, because the assurance provider will look for evidence that engagement could have changed the outcome.

4. Identification of impacts, risks and opportunities

Start from a long list. Walk through each stage of the value chain and each sustainability matter covered by the topical standards (climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy, own workforce, workers in the value chain, affected communities, consumers and end-users, and business conduct), and ask three questions: does the undertaking cause or contribute to an impact here, is it directly linked to one through a business relationship, and could this matter affect cash flows, access to finance or cost of capital. Add entity-specific matters where the topical standards do not cover something that is significant for the business, such as responsible use of artificial intelligence in a software platform.

Describe each impact as a change to people or the environment, not as a management issue. "Supply chain risk" is not an impact; "risk of forced labour in the assembly of point-of-sale terminals by a tier 2 supplier" is. Describe each risk or opportunity as a mechanism with a financial consequence, such as higher costs, lost revenue, impaired assets or changed financing terms. Keep impacts and financial effects as separate rows even when they share a cause, because they are scored on different scales.

For RIO-104, note the EU forced labour product ban (Regulation (EU) 2024/3015, applicable from 2027-12-14; check the Official Journal) and comparable import rules in the US and other markets. For RIO-105, note the EU Packaging and Packaging Waste Regulation (Regulation (EU) 2025/40) and national extended producer responsibility schemes for packaging and electrical equipment. Cite the legal basis in the IRO record so the financial magnitude can be traced to a specific obligation.

5. Impact materiality assessment

Impact materiality asks whether the undertaking is connected to actual or potential, positive or negative impacts on people or the environment over the short, medium or long term. Assess impacts gross of mitigation by default: the mitigation is what the report will disclose, so it must not make the underlying impact disappear from the assessment. Where you assess an impact net of a remediation that has already fully taken effect, document why.

Severity has three components. Scale is how grave the impact is. Scope is how widespread it is, in numbers of people or extent of the environment affected. Irremediable character is how hard it is to put right, and applies only to negative impacts. For potential impacts, likelihood is assessed as well. Positive impacts are assessed on scale, scope and, if potential, likelihood.

Use a documented scale for each component. The scale below is an example; adapt the descriptors to the undertaking and keep them stable between years so the trend means something.

Severity is the simple average of the applicable components. The impact score is severity for actual impacts and severity multiplied by likelihood divided by 5 for potential impacts.

Check the arithmetic: IRO-003 severity (5 + 3 + 5) / 3 = 4.33 and score 4.33 x 2 / 5 = 1.73; IRO-004 severity (4 + 4 + 3) / 3 = 3.67 and score 3.67 x 3 / 5 = 2.20; IRO-007 severity (3 + 2 + 2) / 3 = 2.33 and score 2.33 x 2 / 5 = 0.93. The human-rights override applies to IRO-003 and IRO-004 because both concern human rights (freedom from forced labour, privacy), so their severity is compared with the threshold directly.

Document the rationale for every score in one or two sentences with a reference to evidence: an incident log, an audit report, a sector risk index, a stakeholder statement. Scores without rationale cannot be assured and cannot be defended when a stakeholder challenges the result.

6. Financial materiality assessment

Financial materiality covers sustainability-related risks and opportunities that affect, or could reasonably be expected to affect, the undertaking's financial position, financial performance, cash flows, access to finance or cost of capital over the short, medium or long term. The assessment is not limited to items within the control of the undertaking: dependencies on natural, human and social resources, and the risks arising from them, are part of it.

Calibrate magnitude to the undertaking's own financial scale and align it with the enterprise risk register so the two assessments speak the same language. The example uses bands related to budgeted EBITDA. Likelihood uses the same five bands as section 5.

Example: Corvid's FY2027 budgeted EBITDA is EUR 21,600k, so the band 5 floor (EUR 3.0 million) is about 13.9% of EBITDA and the band 3 floor (EUR 0.5 million) about 2.3%.

Check the arithmetic: 3 x 4 = 12; 2 x 3 = 6; 4 x 3 = 12; 3 x 2 = 6; 2 x 5 = 10.

Connect financial materiality to the financial statements. Where a risk is material, ask whether it affects judgements in the accounts, such as impairment assumptions, useful lives or provisions, and record the cross-reference. An assessment that calls a climate risk material while the impairment memo assumes no climate effect will draw a question from the auditor, so reconcile the two before the statements are signed.

7. Thresholds and consolidation of results

Thresholds turn scores into decisions. Set them in advance, record who approved them and test them for sensitivity: if moving the threshold by half a point changes the result for a matter, flag that matter for board attention rather than letting the threshold decide silently. Qualitative override is acceptable when it is documented, for example where a regulator, a court or a credible stakeholder has already identified a matter as significant.

Consolidate the two perspectives at the level of the sustainability matter. A matter with any material impact, risk or opportunity is a material matter.

8. Material matters and topical standards

The result of the DMA determines which topical standards and which disclosures within them go into the sustainability statement. The general disclosures in ESRS 2 apply regardless of the assessment. For each material matter, identify the policies, actions, targets and metrics to report, and the owner who will produce them. For matters assessed as not material, keep a short explanation in this document; the revised ESRS set out where an explanation of non-materiality must also appear in the statement, and climate change has historically required one. Check the revised ESRS 1 and ESRS 2 text for the current rule before drafting the statement.

Entity-specific disclosures: where a material matter is not covered, or not sufficiently covered, by a topical standard, define entity-specific disclosures and record their metric definitions in section 10. Example: Corvid adds an entity-specific disclosure on responsible use of AI features offered to merchants, linked to IRO-004.

9. Link to ISSB and other frameworks

The ESRS financial materiality perspective and the ISSB standards (IFRS S1 and IFRS S2) both address sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects. The European Commission, EFRAG and the ISSB have published interoperability material on the two sets; refer to those documents by name and check their current versions. In practice, the financial materiality results of this DMA are the starting point for the ISSB report, while impact-only matters (in the example, S2 forced labour risk) belong in the ESRS statement but not necessarily in the ISSB report.

10. Data, evidence and assurance readiness

Assurance of sustainability reporting is performed under ISSA 5000 "General Requirements for Sustainability Assurance Engagements" for periods beginning on or after 2026-12-15, or under national standards where a Member State requires them; the Omnibus I Directive postponed EU limited-assurance standards and removed the planned move to reasonable assurance. Even for voluntary reports, prepare as if an assurance provider will review the process, because lenders and enterprise customers increasingly request assured data.

Keep, for each step: the long list with its sources, attendance and minutes of scoring workshops, individual scoring sheets before calibration, the calibration record, the threshold approval, stakeholder engagement records and the board approval. Keep metric definitions for every entity-specific metric. Maintain version control so that the approved version cannot be confused with drafts.

Traceability matrix from IRO to disclosure:

11. Governance and sign-off

The board approves the outcome of the DMA, normally after review by the audit committee or a sustainability committee with delegated oversight. Present the material matters, the borderline matters from section 7, changes from the prior year and the main judgements. Record the questions raised and how they were resolved, because the governance disclosures in ESRS 2 describe how these bodies are informed about and oversee material IROs.

12. Change log and next review

Review the assessment at least annually. Trigger an earlier update for an acquisition or disposal, entry into a new market or product line, a significant incident, new legislation, or credible stakeholder information that contradicts a previous score. Record what changed and why, so the movement in material matters between years can be explained in the statement.

Next full review: [YYYY-MM-DD]. Next interim check: [YYYY-MM-DD].

13. Glossary and references

References:

• Directive (EU) 2022/2464 (CSRD), amending Directive 2013/34/EU; check the consolidated text on EUR-Lex.
• Directive (EU) 2026/470 (Omnibus I), published 2026-02-26, in force 2026-03-18, transposition by 2027-03-19.
• Commission Delegated Regulation (EU) 2023/2772 (ESRS Set 1), ESRS 1 and ESRS 2 and the topical standards E1 to E5, S1 to S4 and G1.
• Commission Delegated Regulation (EU) 2026/1563 of 3 July 2026 amending Delegated Regulation (EU) 2023/2772 (simplified ESRS), OJ 2026-09-21.
• Commission Delegated Regulation (EU) 2026/1560 (voluntary sustainability reporting standard and value-chain cap), OJ 2026-09-21.
• Regulation (EU) 2024/3015 (forced labour product ban); Regulation (EU) 2025/40 (packaging and packaging waste).
• EFRAG implementation guidance on materiality assessment and value chain, and EFRAG and ISSB interoperability guidance (names only; check current versions).
• IAASB ISSA 5000 "General Requirements for Sustainability Assurance Engagements" (number and title only).
• GHG Protocol Corporate Accounting and Reporting Standard and Corporate Value Chain (Scope 3) Standard.

Standard and licence note

Based on EU law: the CSRD (Directive (EU) 2022/2464), the Omnibus I Directive (Directive (EU) 2026/470) and the ESRS in Commission Delegated Regulation (EU) 2023/2772 as amended by Commission Delegated Regulation (EU) 2026/1563, cited by article, standard and date. EU legal texts on EUR-Lex may be reused under Commission Decision 2011/833/EU; only the Official Journal text is authentic. This template is original: its structure, scoring scales, thresholds and worked example are not taken from the ESRS, EFRAG guidance or any firm publication, and any paraphrase of EU law is the author's own wording. EFRAG, IFRS Foundation (ISSB) and IAASB materials are referred to by name only. Check the current consolidated texts, national transposition and EFRAG guidance before use. Corvid Commerce Group is fictional. Template licence: MIT.