Assess double-materiality of ESG topics for ESRS-ready reporting

The European Sustainability Reporting Standards (ESRS) help companies in the European Union (EU) — including EU-based subsidiaries of International companies — comply with the Corporate Sustainability Reporting Directive (CSRD) for Environmental, Social, and Governance (ESG) reporting.

To help report using the ESRS, you can contact your Workiva Customer Success Manager (CSM) to supplement your Workiva ESG solution with additional templates, including:

• Templates to help document and collect stakeholder perspectives on the inward and outward impacts — or double-materiality — of ESRS topics on your company from Assessments
• Reports to visualize the progress and results of double-materiality assessments as charts and graphs from Reports

Note: An additional cost may apply to deploy these supplemental templates and files as an add-on to your ESG Reporting workspace. For details, contact your Workiva CSM.

Tip: To help control access to Assessments and Reports, Workspace Owners can assign the appropriate roles to workspace members.

What's "double-materiality"?

As proposed, the ESRS require most companies to report on some topics and disclosures — such as those identified in ESRS 2: General disclosures, ESRS E1: Climate change, and ESRS S1: Own workforce — and provides topical standards for specific ESG factors:

• ESRS E1: Climate change
• ESRS E2: Pollution
• ESRS E3: Water and marine resources
• ESRS E4: Biodiversity and ecosystems
• ESRS E5: Resource use and circular economy
• ESRS S1: Own workforce
• ESRS S2: Workers in the value chain
• ESRS S3: Affected communities
• ESRS S4: Consumers and end-users
• ESRS G1: Business conduct

To determine which topics to disclose, you can collect stakeholders' perspectives to identify which ESG factors your company impacts and vice versa — based on both:

• Impact materiality, or your company's outward impacts — both positive and negative — on ESG factors
• Financial materiality, or the inward effects from ESG factors — as impacts, risks, and opportunities (IROs) — to your company and its bottom line

Tip: For guidance on how to conduct a double-materiality assessment, refer to ESRS 1: General requirements.

Perform a double-materiality assessment

To help assess the double-materiality of the ESRS, the templates include several assessments to be performed in sequence.

Tip: From Reports , you can select the workspace members to receive each assessment.

To use these assessments to determine the double-materiality of ESRS topics and IROs:

1. Determine which ESRS topics to create IROs for.
   • To create IROs for the topics prescribed by the European Financial Reporting Advisory Group (EFRAG), go to step 2.
   • To create IROs for only specific topics, such as based on research or stakeholder feedback, add them to CSRD topics in Data or through the Topics section of the Imports spreadsheet.

     Tip: To request feedback from stakeholders about topic materiality, create and send the optional 0a. CSRS topic collection assessment. 

2. To create the IROs, add them to CSRD IRO in Data or through the IROs section of the Imports spreadsheet.  
   

   Tip: To request feedback from stakeholders about the materiality of IROs, create and send the optional 0b. IRO collection assessment.

3. Create and send the 1. Impact materiality assessment and 2. Financial materiality assessment. 
4. After you receive the results of the materiality assessments, create and send the 3. IRO materiality decision and 4. Topic materiality decision assessments.
5. To identify gaps in data collection for material topics and IROs based on the results of the assessments, refresh the connections in the Gap assessment template spreadsheet.

Create and send assessment

To create and send assessments to their stakeholders:

1. From Assessments, click Create .
   
2. Select the template to use with the assessment.
   
3. To create assessments for a specific context, such as for only Environmental topics, click Add creation filter, and select the criteria of the assessments to create.
4. In Period, select the reporting year to assess double-materiality for.
5. Select the stakeholders' due date for their assessments, and click Preview.
6. To create — but not yet send — the assessments, click Create.
7. To send the assessments to their stakeholders, select them from Assessments, and click Send .

View assessment results

To gauge stakeholders' perspective on the materiality of ESRS topics, you can view the results of the assessments for the current period from Reports .

Tip: As the stakeholders complete their assessments, your company can also collect the results in the Gap assessment spreadsheet provided with the templates to help identify and reconcile gaps in data collection.

Set assessment weights

If your assessments include feedback from both individual stakeholders and workshops, you can weigh each assessment differently from Reports . For example, you may want to attribute higher value to a workshop — which provides multiple perspectives — than an individual stakeholder.

To set an assessment's weight:

1. From Reports, open the 3a. Financial & impact materiality materiality assessments folder, then the 4. Assessment weighting assignment report.
   
2. In the Financial materiality assessment or Impact materiality assessment table, enter the assessment weight in the Financial materiality weight or Impact materiality weight column, respectively. For example, if a workshop has 10 attendees, enter 10.
   

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