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Sustainability expectations have changed; high-level commitments and generic ESG statements no longer carry much weight on their own. What stakeholders increasingly want to see is progress and proof that organisations understand where their real impacts and risks sit.
A materiality assessment provides that clarity. It helps organisations distinguish between what is important and what is merely visible, grounding sustainability strategy in evidence rather than assumption. As reporting requirements tighten and scrutiny increases, materiality has shifted from a supporting exercise to a foundational one. This guide explains what a materiality assessment is, why it matters now, and how it supports credible climate strategy and reporting.
What is a materiality assessment?
A materiality assessment is a structured way of identifying which sustainability topics are most significant from both a business and stakeholder perspective. In practice, it answers a simple but critical question: which environmental, social, and governance issues are important enough to influence decisions, performance, or risk? In the context of carbon management, this often centres on greenhouse gas emissions, energy use, supply chain impacts, and exposure to climate-related risks.
A topic is considered material when it has the potential to affect financial performance, operational resilience, regulatory exposure, or stakeholder decision-making. Materiality assessments help organisations focus their time, data, and resources on the areas that genuinely matter, rather than spreading effort across an ever-growing list of topics.
Why materiality matters now
Materiality has always played a role in sustainability reporting, but its importance has grown significantly in recent years. Regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD) have formalised expectations around materiality, requiring organisations to disclose not only what they consider material, but how those conclusions were reached. This has raised the bar for transparency and consistency, particularly around climate-related impacts and risks.
At the same time, climate strategies are under greater scrutiny. Targets, transition plans, and emissions disclosures are expected to reflect real operational footprints and supply chain realities. Without a clear view of what is material, climate commitments risk being incomplete, misaligned, or difficult to defend.
What does double materiality mean in practice?
Double materiality looks at sustainability issues from two perspectives:
- How sustainability and climate issues affect the organisation itself. This includes physical climate risks, transition risks, regulatory exposure, and impacts on costs, supply chains, and long-term resilience.
- How the organisation’s activities affect the environment and society. For climate, this includes greenhouse gas emissions, resource use, and the wider environmental consequences of products and operations.
Under CSRD, both perspectives must be assessed. This ensures organisations do not focus solely on risks to their own performance, while overlooking their contribution to broader environmental challenges.
How materiality assessments strengthen climate reporting
Materiality assessments turn climate reporting into a decision-making tool. By identifying the most significant emissions sources and climate-related impacts, organisations can define clearer boundaries for carbon accounting. This improves data quality, avoids unnecessary complexity, and makes reported results easier to interpret and maintain over time.
Materiality also plays a central role in target setting. Frameworks such as the Science Based Targets initiative (SBTi) require targets to reflect the emissions sources that drive the majority of impact. A materiality-led approach ensures targets are anchored in reality, rather than shaped by convenience or data availability. The result is climate reporting that is clearer, more defensible, and easier to maintain over time.
How materiality fits into sustainability standards and frameworks
Materiality sits at the core of today’s sustainability and climate disclosure landscape, even where it is not always explicitly named. The International Sustainability Standards Board (ISSB) uses materiality to determine what sustainability information is relevant for investors, with climate-related disclosures now formalised under IFRS S1 and IFRS S2. These standards have absorbed the former TCFD recommendations, meaning materiality assessments are central to identifying which climate risks, opportunities, and emissions data must be disclosed.
At a more technical level, standards such as ISO 14067 rely on materiality to define system boundaries and data requirements for product carbon footprints. Newer standards governing climate and neutrality claims, such as ISO 14068-1, also depend on identifying which emissions sources are significant and must be addressed. A robust materiality assessment helps organisations navigate these overlapping requirements without duplicating effort or collecting data that adds little strategic value.
What makes a materiality assessment credible?
A credible materiality assessment is grounded in evidence and designed to be used. It draws on real data where available, including emissions inventories, operational metrics, and supply chain information. It aligns with recognised frameworks rather than creating bespoke definitions. Stakeholder engagement is targeted and purposeful, not a box-ticking exercise.
Most importantly, the outputs inform action. Material topics should shape sustainability priorities, carbon reduction plans, reporting scope, and internal decision-making. If the assessment does not influence what happens next, it has limited value.
How often materiality should be reviewed
Materiality is not static. As organisations evolve, so do their impacts, risks, and data quality. Best practice is to review materiality regularly, often every one to two years, or sooner when there are meaningful changes. These may include new regulations, changes in operations, supply chain shifts, or improved visibility across emissions data. Revisiting materiality allows climate strategies and reporting to mature alongside the organisation’s understanding of its footprint.
From materiality to better carbon management
A well-executed materiality assessment brings focus to carbon management. Rather than treating all emissions sources equally, it helps prioritise those that drive the majority of impact. This improves data accuracy, supports more realistic reduction planning, and makes it easier for internal teams to understand why certain actions matter more than others. Materiality creates a clear link between emissions data and strategic decision-making.
Getting started with a materiality assessment
Starting a materiality assessment does not require perfect data, but it does require structure. Recognised frameworks provide a strong starting point for identifying relevant topics. Existing carbon data, even if incomplete, helps ground the assessment in reality. Stakeholder input should be proportionate and focused on the perspectives that genuinely influence decisions.
At Zevero, materiality assessments are part of how we help organisations move from high-level ambition to practical, defensible climate action. By combining robust emissions data with expert guidance, we support teams in identifying what truly matters and turning that insight into decisions they can stand behind. If you are reviewing your materiality approach or preparing for evolving disclosure requirements, get in touch with the our team to discuss how we can support you.
