EFRAG has just released its guidelines on double materiality, marking a significant shift in how companies will approach this exercise under the CSRD.
Here are the essential points :
Value Chain - Understanding one's business model, value chain and key stakeholders is crucial. The impacts, risks and opportunities identified must be linked to the business model and concern the entire value chain. Poor definition or delimitation can lead to a lack of awareness of significant impacts, risks or opportunities. Impacts can affect stakeholders.
Impacts - The guidelines stress the importance of identifying both negative and positive, potential and actual impacts. It suggests using the standards' list of themes as a checklist, while taking into account the previously identified themes to locate the corresponding impacts.
Risks and opportunities -The guidelines explain that certain impacts can generate risks if they are negative and opportunities if they are positive. Risks and opportunities can also arise from relationships with stakeholders, particularly in terms of dependency. Another source of risk: climat risks, which affect all companies depending on their location. The link with financial risk identification procedures is also established.
You can access the EFRAG guidelines here