A materiality analysis systematically identifies which sustainability aspects the company needs to consider.

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Regardless of the guideline, the materiality analysis must always be conducted according to the principle of double materiality. This means that each aspect must be considered from both an inside-out perspective and an outside-in perspective.

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The inside-out perspective (“impact materiality”) asks: What potential positive or negative impacts does the company have on the environment or society?

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The outside-in perspective (“financial materiality”) asks: What opportunities and risks arise for the company from the environment and society?

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For a realistic and comparative assessment, the aspects regarding actual/potential impacts and the extent, scope, possibility of remediation, and likelihood of occurrence of harm must be evaluated.

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No regulation specifies formal requirements or evaluation criteria for conducting a materiality analysis—meaning that an SME is free to decide how to carry out the materiality analysis.

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However, if the materiality analysis is conducted “on a case-by-case basis” by the company independently or using quick checks available online, there is always a risk that the assessment will be somewhat subjective. Namely, it depends on the biases of those conducting the analysis regarding what they personally consider important. The results are then not very reliable—especially when comparing the aspects with one another and as a basis for a subsequent ranking of the topics.

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A reliable materiality analysis, however, requires both a systematic approach and a standardized evaluation of sustainability aspects. C-plus-C has therefore developed a tool for “objective” materiality analysis to conduct the materiality analysis in a resource-efficient manner (both in terms of internal time expenditure and external costs), document it thoroughly, and generate a usable basis for subsequent prioritization decisions.

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In accordance with the guidelines, all aspects of sustainability are

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• assessed from both perspectives of double materiality,

• distinguished between actual and potential impacts, and

• evaluated in terms of the extent, scope, remediability, and likelihood of harm occurring; they are then

• compared with one another based on definable parameters and categorized according to their need for consideration and/or reporting.

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(Note: The tool is currently only available in German. A translation would of course be possible, but would need to be arranged on a case-by-case basis.)

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Conclusion: C-plus-C has developed a tool that enables companies to efficiently create an objective, policy-compliant, and robust materiality analysis.

We would be happy to introduce you to this tool and its simple application in a no-obligation introductory meeting—you can contact us here.