Glossary
Double materiality
The principle that a sustainability matter is material if it is significant either for its impacts on people and the environment, or for its financial effects on the company, or both.
Double materiality is central to the EU’s CSRD and ESRS. It combines impact materiality (inside-out: how the company affects nature and people) and financial materiality (outside-in: how sustainability matters create risks and opportunities for the company). Investor-focused standards such as the ISSB’s focus on financial materiality, while TNFD addresses both impacts and dependencies.