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Mar 31, 2025

What is a Double Materiality Assessment - and why it’s useful for VSME Reporting

What is a Double Materiality Assessment - and why it’s useful for VSME Reporting

A Double Materiality Assessment (DMA) might not be required under the VSME standard - but it’s still a valuable step. Even though VSME applies the "if applicable" principle, many companies find that using a DMA approach helps them decide what’s relevant to report—and where to focus their efforts.


In this article, we explain what DMA is, how it complements the VSME framework, and why it’s worth considering even when you’re not legally required to do it. We’ll also walk through how to get started, what steps to follow, and what to keep in mind to make it meaningful.



What is double materiality?


Double Materiality means looking at sustainability from two directions:

  • Impact materiality – How your company affects people and the environment

  • Financial materiality – How sustainability topics affect your company’s performance, risks, and resilience


DMA is a core part of ESRS reporting and required for companies in scope of the CSRD. But it can also be used voluntarily by any company that wants to:

  • Understand where to focus its sustainability work

  • Build a structured VSME report

  • Improve risk management and mitigation

  • Strengthen internal alignment on sustainability priorities


VSME and the "If Applicable" principle


VSME does not require a Double Materiality Assessment. Instead, it uses the "if applicable" principle: companies report only on topics that are relevant to their business.


For example, a logistics company might report on transport emissions, but skip biodiversity. A food producer may include biodiversity but skip product safety if it’s not relevant.


Still, determining what’s "applicable" benefits from the kind of thinking that comes with a DMA. Even a light version can:

  • Reduce guesswork

  • Improve consistency

  • Align teams internally

  • Future-proof your reporting if CSRD ever becomes relevant to your business



Why conduct a DMA when reporting under VSME?


DMA helps you:

  • Prioritise where to spend your time and budget

  • Align stakeholders and departments

  • Identify risks and opportunities early

  • Improve clarity in what to report under the VSME framework

  • Communicate clearly with investors, customers, and partners


In short, it helps you build a strategy that’s based on what really matters - not just what’s easiest to report.



Steps to conduct a double materiality assessment


You don’t need to follow a template, but here’s a solid process you can adapt:

  1. Understand the broader context
    Map your regulatory environment, stakeholder expectations, and business strategy. What is the big picture?


  2. Identify Impacts, Risks, and Opportunities (IROs)
    What topics affect your company—and what topics your company affects? These will be central to your entire CSRD process. 


  3. Assess Materiality

    • Impact materiality: Are you having a significant effect on people and/or the planet?

    • Financial materiality: Could the topic affect your performance, risk, or resilience?


  4. Set thresholds
    Use qualitative and/or quantitative criteria to determine what counts as “material.”


  5. Document and report
    Summarise your process, decisions, and outcomes. Keep records for future use.



Tips for a smoother process


These are learnings from our team and partners and our customers:

  • Involve internal stakeholders early – Bring in Finance, HR, Operations, and leadership

  • Set context before you begin – Share background and explain why DMA is useful. Assuming the purpose of a Double Materiality Assessment workshop is obvious—like “we’re here to map ESG impacts”—undermines its potential. Without clearly naming the deeper intention (e.g., aligning cross-functional priorities, surfacing tensions, or shaping strategic focus), the session risks becoming a box-ticking exercise. It invites vague input, misaligned expectations, and passive participation. And, we know that the DMA done right can be used for so many purposes! 

  • Plan your timeline realistically – take input, follow ups and iterations into account!

  • Document everything – This makes the process repeatable, auditable, and useful over time.



Final thought: DMA as a tool for strategy, not just reporting


DMA isn’t just about fulfilling a requirement. Done well, it becomes part of your decision-making process. It can guide product development, sourcing, employee engagement, and risk planning.


Even if you’re reporting under VSME and not CSRD, understanding what truly matters to your business and stakeholders will always be valuable.


If you’re unsure where to start or want to integrate DMA into your sustainability platform, we’re here to support.


Helpful resources:


Interested in getting support with your DMA? We are happy to help! Reach out to schedule a meeting.

Let's accelerate change for better business - better planet!

Let's accelerate change for better business - better planet!

Let's accelerate change for better business - better planet!

Let's accelerate change for better business - better planet!

SustainLab is a SaaS Sustainability Management platform that automates collection, processing and visualization of sustainability data, to help companies spend less time on data-handling and more on accelerating change.

Newsletter

Copyright @2020-2025 SustainLab Sweden AB.

SustainLab is a SaaS Sustainability Management platform that automates collection, processing and visualization of sustainability data, to help companies spend less time on data-handling and more on accelerating change.

Newsletter

Copyright @2020-2025 SustainLab Sweden AB.

SustainLab is a SaaS Sustainability Management platform that automates collection, processing and visualization of sustainability data, to help companies spend less time on data-handling and more on accelerating change.

Newsletter

Copyright @2020-2025 SustainLab Sweden AB.