Within sustainability, materiality analysis is used to understand which aspects have a real impact on an organisation’s activities and on the environment, society, or stakeholders. This process helps management distinguish between what is truly important and what is secondary, avoiding a generic or purely declarative approach.
Through materiality analysis, the organisation reviews its activities, risks, and interactions with stakeholders, linking them to topics such as environmental impact, working conditions, human rights, ethics, or the supply chain. The outcome is a clear set of priorities that reflects how the organisation actually operates, not just theoretical requirements. For a company, this process explains why certain policies, procedures, or measures are treated as priorities, while others are managed at a basic level. In this way, sustainability becomes part of everyday decision-making rather than a box-ticking exercise. When approached in a practical manner, materiality analysis becomes a management tool that helps the organisation focus its resources where risks and impacts are greatest, providing coherence to actions and credibility to sustainability performance communication.
Approached in practical terms, materiality assessment becomes a management tool that helps the organisation focus its resources where risks and impacts are greatest, bringing consistency to its actions and credibility to its communication on sustainability performance.
Single materiality and double materiality
The classic approach to materiality starts from the question of which topics are relevant to stakeholders and to the organisation's performance. The European Sustainability Reporting Standards (ESRS), applicable to companies within the scope of the CSRD, introduce the concept of double materiality, which examines two perspectives at the same time:
- Impact materiality – the actual or potential effects of the organisation's activities on the environment and people: emissions, resource consumption, working conditions, local communities.
- Financial materiality – how sustainability matters can create risks or opportunities for the organisation: energy costs, customer requirements, access to finance, new regulations.
A topic is considered material if it is significant from at least one of the two perspectives. Even companies without direct reporting obligations increasingly receive these requirements indirectly, through questionnaires from large customers or through assessment platforms such as EcoVadis.
Steps of a materiality assessment
- Understanding the context – activities, locations, value chain and applicable legal and sector requirements.
- Identifying potential topics – based on reference standards (ESRS, GRI), sector-specific risks and internal data.
- Stakeholder engagement – employees, customers, suppliers, authorities and the community, through interviews, questionnaires or workshops.
- Assessment and prioritisation – impacts are assessed by severity (scale, scope, irremediable character) and likelihood, while risks and opportunities are assessed by their estimated financial effect.
- Management validation – setting materiality thresholds and approving the final list of topics.
- Documentation and periodic review – results are kept in a register and updated when significant changes occur in the business.
What the assessment delivers in practice
The outcome is not just a graphic matrix but a set of decisions. Material topics receive policies, measurable objectives and performance indicators, with clear owners and deadlines, while non-material topics are monitored at a baseline level. The same logic is found in ISO 14001 and ISO 45001 management systems, which require the determination of significant environmental aspects and of risks and opportunities respectively, so data already available in these systems can be reused.
Common mistakes
- Adopting a generic list of topics with no connection to the company's actual operations.
- Token stakeholder consultation, where the results do not influence priorities.
- No documented methodology, which makes the outcome hard to verify for auditors or EcoVadis analysts.
- Treating the assessment as a one-off exercise, not revisited after changes in the business or new customer requirements.
A documented materiality assessment ensures consistency between policies, actions and reported results, which is verified both in management system audits and in sustainability assessments.