Impact Materiality

Impact materiality is one of the two dimensions of the double materiality assessment required under the CSRD. It evaluates how a company’s activities, products, and business relationships affect people and the environment.

Impact materiality considers:

• Actual impacts: Effects that are already occurring (e.g., current carbon emissions, existing workplace incidents)
• Potential impacts: Effects that could occur based on the company’s activities (e.g., risk of pollution from a new facility)
• Value chain scope: Impacts across the entire value chain, not just direct operations

Impacts are assessed based on their severity, which combines three factors:

1. Scale: How significant is the impact?
2. Scope: How widespread is it?
3. Irremediability: How difficult is it to reverse?

For potential impacts, likelihood is also considered alongside severity.

A sustainability topic is considered material from an impact perspective if the company’s impacts on that topic meet or exceed the defined severity threshold. This assessment, combined with financial materiality, determines which ESRS topics must be included in the CSRD report.