CSRD double materiality in SAP Analytics Cloud: structuring ESRS datapoints

Double materiality is the methodological foundation of CSRD reporting — and the concept most often misunderstood by teams preparing their first ESRS disclosure. It is not a checklist; it is an assessment that determines which sustainability topics your organization must report on, and why. This guide explains what double materiality means in practice, how the ESRS framework uses it, and how to structure the assessment and its outputs in SAP Analytics Cloud.

What double materiality means

Traditional financial materiality asks one question: does this topic affect the financial position of the company? Double materiality asks two. Impact materiality asks: does the company's activity have a significant impact on people or the environment — positive or negative, actual or potential? Financial materiality asks: does a sustainability topic create significant financial risks or opportunities for the company — through regulation, market shifts, physical climate risk, or reputational effects? A topic is material under CSRD if it clears either threshold, not both. This double lens is what makes CSRD broader than TCFD or GRI alone — a company may need to report on a topic (say, biodiversity loss from its supply chain) even if that topic has no current financial impact, because the impact on the environment is significant.

How the ESRS uses the assessment

The European Sustainability Reporting Standards (ESRS), developed by EFRAG and adopted by the European Commission, are organized around the double materiality assessment. ESRS 1 and ESRS 2 are mandatory for all in-scope companies. The topical standards — E1 (Climate change), E2 (Pollution), S1 (Own workforce), S2 (Workers in the value chain), G1 (Business conduct) and so on — are only required if the topic is material for your company. The double materiality assessment is therefore the gateway to the rest of the disclosure: it determines your reporting perimeter.

Structuring the assessment in SAC

A double materiality assessment produces a set of scored topics — typically a matrix with impact materiality on one axis and financial materiality on the other. In SAC, this translates naturally into a planning model: Topic as a dimension (the ESRS sustainability matters), Materiality type (impact vs financial), Score as a measure (severity × likelihood, using the EFRAG methodology), and Status (material, not material, under review). A Story then visualises the materiality matrix, tracks stakeholder inputs, and produces the disclosure-ready output — the list of material topics and the rationale for each.

The link to ESRS data collection

Once the material topics are identified, the data collection begins. Each material ESRS topic maps to a set of disclosure requirements (quantitative metrics and qualitative narrative). In SAC, a separate data collection model — often connected to the same model that holds the GHG emissions data for Scopes 1, 2 and 3 — captures the metrics by topic, entity and period. The CSRD/ESG reporting guide covers the Scope emissions structure in detail. The double materiality output feeds directly into the disclosure index: which ESRS apply, which data points are required, and which are not.

Practical challenges

The double materiality assessment involves stakeholder engagement (internal and external), scoring methodology decisions, and documentation of the rationale for each topic — all of which must be defensible to an external auditor. SAC helps with the quantitative scoring and the data trail, but the qualitative judgements (what counts as "severe", what is the boundary of the value chain) require subject matter expertise in sustainability reporting. The assessment is not a one-time exercise — it must be updated as the business and its context change.

Where to start

Our ESG carbon footprint template gives you the emissions data structure for the quantitative side of CSRD reporting, and the CSRD/ESG guide covers the full Scope 1/2/3 model. For the regulatory context and the 2026 Omnibus reform that revised the CSRD scope, see our CSRD in SAC article. Not sure which template fits your ESG reporting process? Let the assistant recommend one.

Sources

European Sustainability Reporting Standards (ESRS): EFRAG; CSRD Directive (EU) 2022/2464 and Omnibus reform Directive (EU) 2026/470.