For organizations to remain competitive, embedding ESG in their business strategies is imperative. As a first step in strategy-making usually entails analyzing and understanding the organization’s inside and outside contexts, a double materiality assessment is a great tool to help organizations consider the impacts of both of these. On top of the assessment being foundational for integrating ESG in organizational strategies, it will be required as part of the EU approved Corporate Sustainability Reporting Directive (CSRD). In this article, we discuss the importance of considering materiality as a starting point for your strategy, elaborate on other strategy building blocks, and provide tips and practical guidance for a successful double materiality assessment.
In February 2022, the European Commission published a new EU Directive on Corporate Sustainability Due Diligence. This directive aims to set rules and requirements for companies in the European Union to foster respect for human rights and the environment in global value chains. The draft law aims to provide consumers with greater transparency when purchasing products whose supply and production chains have been difficult to trace until now. This article outlines some of the most notable implications for companies in the European Union and provides recommendations on how to prepare for the upcoming legislation.
Spurred by regulation and investor interest, more companies than ever are reporting on core ESG topics by publishing integrated or separate corporate sustainability reports. Simultaneously, more than $1tn in total assets under management in funds are now abiding by ESG principles, and legislation is catching up. While investors and policy makers are becoming stronger advocates for ESG disclosure, companies struggle to strike the right balance between efforts and results. But how to make sure the right ESG ratings and performance analysis are used to inform senior management?
As of 2023, the EU Commission requires companies to apply the concept of “Double Materiality” as part of its new Corporate Sustainability Reporting Directive (CSRD). Companies that have not already done this, need to develop a sharp view on both short-term impacts as well as risks further on the horizon in order to guide their business and build resilience for climate change and other factors. In addition, the Global Reporting Initiative (GRI) announced updates to its Standards in which the process of a materiality assessment was also actively addressed. This article answers one of the main questions that therefore arises: how do you visualize your materiality matrix in line with the double materiality principle?
Last October, the Global Reporting Initiative (GRI) announced the biggest update of its standards since 2016. Beyond legal requirements, the GRI has been identified as one of the most comprehensive and internationally recognized sustainability standards setter for corporate reporting. Scheduled to be applicable by 2023, these changes require companies to increase their level of transparency and to dedicate further resources into non-financial reporting. One of the key updates is the introduction of sector standards, providing additional guidelines for comparability of companies from the same industries. Another important change in the GRI Universal Standards is the revised approach on how organization should conduct their materiality assessment. This article focuses on the proposed changes and what it means for companies which have selected the GRI Standards as their ESG reporting framework.
In the corporate world, sustainability reporting requirements are continuously increasing through national and international directives. In the EU, the upcoming Corporate Sustainability Reporting Directive (CSRD) will impact the reporting guidelines of a large number of European companies. Beyond legal requirements, the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) have been identified as the most comprehensive and internationally recognized sustainability standards setters for corporate reporting. At the end of 2020, GRI counted more than 38,000 GRI reports from organizations, including 73% of the world's 250 largest companies.
Non-financial reporting regulations are evolving at a high pace – especially in Europe. Spurred by the need to redirect finance towards achieving the EU Green Deal and the Paris Agreement, companies will have to become more transparent on their environmental and social impacts, and their strategy to mitigate ESG risks. But before you can ‘talk the walk’, you’ll need to figure out how to walk, and where towards. This article gives a brief overview of the implications of the most important European non-financial reporting requirements for companies operating in Europe, and how to get ready for them.
On 13th September 2018, RobecoSAM and S&P Dow Jones Indices announced the results of the annual Dow Jones Sustainability Indices (DJSI) review. We are happy to announce that all our customers from eight different countries entered or continued their inclusion in the DJSI, of which four are now industry leaders. Among the companies that were newly added in this year’s Indices are Diageo, General Mills, Assicurazioni Generali, and BBVA whereas Henkel, BASF, and Bayer have been deleted from the index.
It sounds contradictory: Less is More. However, it is highly relevant for the sustainability focus of corporations. Companies often slip into the trap of focusing on too many ESG issues that are not material to their business. Solid research has shown that focusing performance on ESG issues that are truly material has a positive effect on total shareholder returns. So companies should concentrate on enhancing their impact in fields that matter the most. By committing to a select number of ESG issues, companies can unleash the full potential of their materiality matrices.
Last year, research among WBCSD member companies on sustainability and risk disclosures revealed that only 29% of material topics as published in the sustainability report were also included in the company’s legal disclosure of risks. Amazingly enough, for 35% of member companies this disclosure dropped to zero(!) demonstrating a feeble link between sustainability reporting and Enterprise Risk Management. With the launch of a public consultation on fiduciary duties and sustainability by the European Commission in November 2017, the increase of the interest in this topic is likely to further expand.