Financial Materiality Compass

 

As part of the new sustainability reporting (CSRD), companies will in future have to report on all sustainability issues that are material to them financially or in terms of their impact. Conducting an individual materiality analysis poses major challenges, especially for smaller companies. In order to offer an aid here, we have developed the Financial Materiality Compass (FMC) from panel regressions, analyses of sustainability reports and expert interviews. It indicates which standard ESRS reporting topics are highly (dark green, 2), weakly (light green, 1) or not (white, 0) financially material for companies in different sectors and thus covers one of the two materiality dimensions.

 

The FMC cannot replace an independent analysis of the significance of individual sustainability aspects for a company. However, based on a robust scientific analysis, it provides an informed starting point for an individualized materiality analysis. More detailed information on the preparation of the Financial Materiality Compass can be found here.