Double Materiality Assessment Tool for CSRD

This document is a technical report detailing the Double Materiality Assessment Tool developed by Morningstar Sustainalytics, which supports investors in conducting double materiality assessments as required by the EU Corporate Sustainability Reporting Directive (CSRD). The tool evaluates 135 subindustries against 10 European Sustainability Reporting Standards (ESRS) topics, providing a consolidated approach to assess materiality from both financial and impact perspectives. The report outlines the complexity of sustainability reporting under the CSRD, emphasizing the importance of the double materiality principle. It presents findings from 1,350 individual assessments, revealing that 87% of subindustry-topic combinations are deemed material. The report also discusses the significance of specific ESRS topics, such as Climate Change and Business Conduct, which are identified as material across all subindustries. Furthermore, it highlights recent regulatory updates aimed at simplifying the double materiality assessment process while maintaining compliance with evolving standards.