The 2026 ESRS revision significantly reduces reporting volume, but double materiality remains the gateway to deciding which sustainability matters require disclosure. Simplification makes a disciplined assessment more important, not less.
A strong double materiality assessment identifies material impacts, risks, and opportunities using evidence and documented judgement. It should be proportionate to the company and stable enough to update, challenge, and assure.
Confirm which ESRS text applies
The European Commission adopted revised ESRS on July 3, 2026. The delegated act was then submitted to the European Parliament and Council for scrutiny. As of August 10, the revised standards were not legally effective pending completion of that process and publication in the Official Journal.
Before updating the assessment, record the ESRS edition, reporting period, national law, and transition provisions used. Do not delete the prior mapping until the legal effective date and crosswalk are confirmed.
Start with a complete universe
Build an initial list of potential impacts, risks, and opportunities from operations, products, workers, business relationships, geographies, and the value chain. Use prior assessments, due diligence, enterprise risk, incidents, grievances, transition planning, supplier analysis, and stakeholder input.
Avoid beginning with the disclosure checklist alone. The assessment determines which topics are material; the desired size of the report should not determine the conclusion.
Assess impact and financial materiality separately
Impact materiality considers actual or potential positive and negative impacts on people and the environment. Financial materiality considers sustainability matters that can affect the company’s financial performance, position, cash flows, access to finance, or cost of capital over relevant time horizons.
Use distinct criteria and then connect the results. An issue can be material under either perspective or both. Preserve the rationale when the two perspectives produce different outcomes.
For each candidate matter, record:
- The affected people, environment, business activities, and value-chain stage.
- Whether the impact is actual or potential, positive or negative.
- Severity, likelihood, and time horizon where applicable.
- Financial effects, dependencies, and business pathways.
- Evidence sources, uncertainty, and owner.
Set thresholds through governance, not convenience
Document scoring scales, thresholds, aggregation rules, and qualitative override criteria. Explain how severe human-rights or environmental impacts are handled even where likelihood or financial value is uncertain.
Management should challenge the method and results, and those charged with governance should approve the material topics and reporting implications. Retain meeting records and changes made through challenge.
Connect the conclusion to disclosures
For every material topic, map the related impacts, risks, and opportunities to policies, actions, targets, metrics, and topical ESRS disclosures. For non-material topics, retain enough rationale to show how the conclusion was reached.
Entity-specific information may still be necessary when material information is not captured adequately by prescribed datapoints. A shorter standard does not permit omission of information required for fair presentation under the applicable criteria.
Make the process assurance-ready
Keep source evidence, interview records, stakeholder inputs, scoring changes, approvals, and the final disclosure mapping in version-controlled form. The IAASB’s ISSA 5000 materiality FAQ specifically addresses quantitative and qualitative information and double materiality where required by the reporting framework.
Run an independent internal challenge over a sample of material and non-material conclusions. Ask whether another informed reviewer can reproduce the path from evidence to score to disclosure.
Carbon Impact’s CSRD solution helps teams manage ESRS readiness and evidence, while the ISSA 5000 solution supports the controlled assurance trail.
This article reflects information available on August 10, 2026. Confirm the legally applicable ESRS text for the reporting period. This is general information, not legal or assurance advice.
Sources
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