Double materiality assessment: Early practices and process disclosures

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School of Business | Master's thesis
Degree programme
Creative Sustainability
The purpose of the study is to expand the understanding of double materiality assessment practices from two perspectives in a context where reporting based on double materiality is just beginning and double materiality assessment practices are being developed. Firstly, the study aims to increase understanding of how double materiality assessments are conducted. Secondly, the study examines how companies disclose their double materiality assessment practices. One of the purposes of double materiality assessment is to produce useful and credible sustainability information. Previous challenges in sustainability reporting have been related to the quality and comparability of the information. The study focuses on Finnish companies that are subject to the Corporate Sustainability Reporting Directive (CSRD) and have proactively adopted the principle of double materiality before the directive’s mandatory schedule. This is a qualitative study in which the data has been collected from companies in different industries through semi-structured interviews. The data collected has been analyzed using thematic analysis. The findings of the study show that companies face challenges in conducting double materiality assessment. Therefore, companies feel they are still practicing reporting and need support to carry out the assessment. The findings show that companies use internal and external experts in various ways and engage stakeholders to different extents at different phases of the process. Additionally, the accuracy and transparency of double materiality assessment disclosure vary. Only a few companies provide details about the process before benchmarking how others disclose the information or when the directive requires disclosure. Based on the results, it can be concluded that the lack of standardized practices and the lack of transparency related to the assessment process weaken the reliability and usability of the reported information. Moreover, companies' reporting appears as a pursuit of legitimacy if details of the double materiality analysis are not disclosed. It is also noteworthy that the methods used by the first companies to conduct and disclose double materiality assessment significantly influence the development of widely accepted practices.
Thesis advisor
Lankoski, Leena
Holopainen, Maria
double materiality, materiality assessment, CSRD, disclosure practices, sustainability reporting
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