The materiality analysis is a central component of CSRD (Corporate Sustainability Reporting Directive) -compliant sustainability reporting. Utilizing it, an organization determines sustainability aspects, that are more important or less. This determines which points are being included in the report and which can be left out. In other words, this is a technique of quantification and prioritization. In connection with sustainability reporting, the principle of double materiality applies. This means that the sustainability aspects considered are analyzed in terms of their effect from the company to the outside (inside-out), for example on the environment, society, etc., as well as from the outside on the company (outside-in), e.g. the climate, or demographic change on the company.
By creating a two-dimensional diagram (see graphic), the collected values for each individual aspect are displayed graphically. With the help of cut-offs, it is defined which points are now material, i.e. above the limit value and which are not. Everything that is classified as material goes into the sustainability report, everything else remains out of the report for the time being.
The materiality analysis can be an important tool not only for the immediate preparation of sustainability report, but also on evaluation and prioritization of sustainability aspects for implementation in an organization. That is why it is constantly being adapted, evaluated and updated. It is therefore firmly integrated into the sustainability processes. Supported by software solutions for sustainability reporting, the double materiality analysis may be automated accordingly.
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