Double Materiality Assessment Tool for CSRD Impact Reporting

This report is a technical document detailing the Double Materiality Assessment (DMA) tool developed by Morningstar Sustainalytics. It focuses on supporting investors in compliance with the Corporate Sustainability Reporting Directive (CSRD) established by the European Union. The CSRD mandates companies to disclose their material impacts on environmental, social, and governance (ESG) aspects while also considering financial implications. The DMA tool evaluates the material impacts of 135 subindustries across 10 ESRS topics, offering a clear binary assessment of whether these subindustries generate significant impacts. The report outlines that a substantial number of subindustries exhibit material impacts on multiple ESRS topics, particularly highlighting the significance of climate change, water resources, circular economy practices, and consumer impacts. The report further emphasizes the importance of direct impact assessments while excluding indirect impacts to ensure clear attribution. This provides a framework for stakeholders to understand and navigate the complexities of sustainability reporting requirements effectively.