Double Materiality Assessment
Identify the ESG topics that truly matter — to your business and to the world. Our materiality assessments combine impact materiality (GRI/ESRS) and financial materiality (ISSB/IFRS) to deliver a robust, stakeholder-validated foundation for BRSR reporting, sustainability strategy, and ESG rating improvement.
Why Materiality Assessment Matters for Indian Companies
Materiality assessment determines which ESG topics deserve attention, resources, and disclosure. Without it, companies either report everything superficially or miss the topics that investors, regulators, and rating agencies care about most.
BRSR Requirement
BRSR Section B requires companies to disclose which NGRBC principles are material and how material topics are identified. BRSR Principle 4 (Stakeholder Engagement) specifically asks about materiality processes. ESG rating agencies evaluate whether companies have a documented materiality assessment process. Without one, you lose points across CRISIL, MSCI, and Sustainalytics.
Strategy Foundation
A sustainability strategy without materiality is directionless. Materiality tells you where to set targets, allocate resources, and focus disclosure. It also prevents greenwashing accusations — by demonstrating that your priorities are stakeholder-validated, not cherry-picked.
CSRD Readiness
Indian companies with EU operations, subsidiaries, or significant EU revenue will face CSRD obligations from FY 2028. CSRD’s European Sustainability Reporting Standards (ESRS) mandate double materiality — assessing both impact and financial dimensions. Starting now builds readiness.
Three Lenses of Materiality
The concept of materiality has evolved. We apply the right lens depending on your reporting obligations and stakeholder needs.
Impact Materiality
GRI 2021 | NGRBC
What are the most significant impacts of your company on people and the environment? Outward-looking. Considers both positive and negative impacts, actual and potential. Required for GRI-aligned reporting and BRSR.
Best for: All listed Indian companies (BRSR alignment), GRI reporters
Double Materiality
CSRD/ESRS | Integrated
Combines impact materiality and financial materiality. A topic is material if it has significant impact on people/environment or could reasonably affect enterprise value. The emerging global standard under EU CSRD.
Best for: EU-exposed companies, CSRD-scoped entities, forward-looking strategy
Financial Materiality
ISSB/IFRS S1-S2 | SASB
Which ESG topics could reasonably affect enterprise value, cash flows, or financial condition? Inward-looking. Investor-decision-useful. SEBI is studying ISSB adoption for India.
Best for: Investor-focused reporting, financial institutions, ISSB adopters
Materiality Assessment Process
A structured four-phase process that delivers a defensible, stakeholder-validated materiality assessment.
Topic Identification
Map the universe of potential ESG topics relevant to your sector, value chain, and operating context. We use multiple reference sources to ensure comprehensive coverage:
- BRSR/NGRBC — All 9 principles and their Essential/Leadership indicators
- GRI Sector Standards — Industry-specific topics (e.g., GRI 11 Oil & Gas, GRI 12 Coal, GRI 13 Agriculture)
- SASB Standards — Industry-specific financial materiality topics
- ESG Rating Criteria — Key issues evaluated by CRISIL, MSCI, Sustainalytics
- Peer Analysis — Material topics disclosed by sector peers (domestic and global)
- Regulatory Horizon — Emerging regulations that may create material risks/opportunities
Deliverable: Long list of 30–50 candidate ESG topics with source mapping and preliminary categorisation.
Stakeholder Engagement
Structured engagement with internal and external stakeholders to capture diverse perspectives on topic significance. Methods tailored to each stakeholder group:
- Investors/analysts — Structured interviews, ESG expectations survey
- Board/management — Strategy alignment workshop, risk assessment interviews
- Employees/workers — Online survey, focus groups (including contract workers)
- Customers — Sustainability expectations survey, procurement requirements review
- Suppliers — Value chain ESG survey, critical supplier interviews
- Communities/NGOs — Community dialogues, civil society input
- Regulators — Regulatory trend analysis, policy horizon scanning
Deliverable: Stakeholder engagement report with methodology, participation, key findings, and response analysis.
Assessment & Prioritisation
Score each topic on two dimensions — impact significance (severity, likelihood, irremediability) and financial significance (magnitude, likelihood, time horizon). Apply quantitative thresholds and peer benchmarks. For double materiality: a topic is material if it meets the threshold on either dimension.
The result is a prioritised list of 12–20 material topics, typically categorised as High Priority (requires targets, governance, and detailed disclosure), Medium Priority (requires management approach and monitoring), and Monitoring (tracked but not currently material).
Deliverable: Materiality matrix (visual), scored topic register, and materiality determination documentation.
Board Validation & Integration
Facilitated board/management workshop to validate the material topics, approve priorities, and confirm the materiality matrix for publication. We then integrate the results into:
- BRSR reporting — Map material topics to NGRBC principles and indicators
- Sustainability strategy — Inform target-setting and resource allocation
- ESG governance — Align committee oversight with material topics
- ESG ratings — Ensure material topics match rating agency key issues
- Annual reassessment — Establish a cycle for dynamic materiality updates
Deliverable: Board presentation pack, publication-ready materiality matrix, material topic profiles with KPIs and management approach.
Common Material ESG Topics for Indian Companies
While each company’s materiality is unique, certain topics consistently emerge as material across Indian sectors.
Environment
- GHG emissions & energy management
- Water stewardship & scarcity
- Waste management & circular economy
- Air quality & pollution prevention
- Biodiversity & land use
- Climate risk & adaptation
Social
- Occupational health & safety
- Workforce diversity & inclusion
- Human rights & labour practices
- Community engagement & CSR impact
- Supply chain labour standards
- Data privacy & cyber security
Governance
- Board composition & ESG oversight
- Business ethics & anti-corruption
- Regulatory compliance
- ESG risk management
- Responsible tax & transparency
- Executive ESG-linked compensation
RSustain Tools for Materiality
BRSR Compass
120-question assessment that identifies gaps across all 9 NGRBC principles — a natural starting point for materiality topic identification.
Start free →ESG Policy Templates
42 policy templates aligned to BRSR principles. Once material topics are identified, policies need to be in place for each — as required by BRSR Section B.
Download free →Supply Chain ESG
Supplier sustainability assessment to identify value chain material topics — critical for Scope 3, BRSR value chain disclosure, and CSRD.
Launch tool →Complementary Services
Sustainability Strategy
Materiality is the foundation — strategy translates it into targets and action
BRSR Compliance
Map material topics to NGRBC principles for focused BRSR reporting
ESG Governance
Align board oversight structures with identified material topics
ESG Data Assurance
Assure data quality on material topics for credible reporting
Materiality Assessment FAQ
Is materiality assessment mandatory under BRSR?
BRSR does not explicitly mandate a formal materiality assessment process. However, it requires companies to identify which principles and topics are material and disclose their management approach accordingly. BRSR Principle 4 (Stakeholder Engagement) asks about materiality processes. Practically, all ESG rating agencies evaluate whether a company has a documented materiality assessment, and its absence negatively impacts scores across CRISIL, MSCI, and Sustainalytics.
What is the difference between single, double, and dynamic materiality?
Single materiality (impact) assesses a company’s impacts on people and the environment (GRI approach). Financial materiality assesses ESG topics’ effects on enterprise value (ISSB/SASB approach). Double materiality combines both — a topic is material if significant on either dimension (CSRD/ESRS approach). Dynamic materiality recognises that topics can shift between categories over time as societal expectations and regulations evolve. We recommend double materiality as the most future-proof approach.
How many material topics should a company have?
Typically 12–20 material topics, prioritised into 2–3 tiers (high, medium, monitoring). Having too few suggests insufficient analysis; too many dilutes focus. The exact number depends on company size, sector complexity, and value chain breadth. Each material topic should have a defined management approach, KPIs, and governance ownership.
How often should materiality be reassessed?
Best practice is an annual review with a full reassessment every 2–3 years. The annual review checks for material changes (regulatory, market, operational) that may shift topic significance. Major events (acquisitions, entering new markets, new regulations like CBAM or CSRD, significant incidents) should trigger an ad-hoc reassessment. GRI 2021 requires that the materiality process is documented and repeatable.
Do Indian companies need double materiality for CSRD?
If your company has EU operations generating >€40 million in EU net turnover, or is an EU subsidiary of a non-EU parent with >€150 million EU revenue, CSRD may apply from FY 2028 onwards. CSRD mandates double materiality under ESRS. Even if not currently in scope, Indian companies with significant EU exports, EU-listed bonds, or EU institutional investors should start building double materiality capability now to prepare for inevitable requirements.
Know What Matters Most
Book a consultation to discuss materiality assessment for your company — impact, financial, or double materiality.