Double Materiality – It’s Not a Fashion Term, Promise!
- Bonita Labuschagne
- Jul 13
- 2 min read
When you hear Double Materiality, you might picture a super fancy fabric or something you’d hear on a Project Runway episode. But don’t worry—this isn’t about designer clothes.
It’s actually a big deal in the world of sustainability and ESG reporting. And the good news? It’s not as complicated as it sounds.
🎯 What Is Double Materiality?
Let’s break it down.
Materiality in business means: what matters. As in—what issues are so important they could impact a company’s success or reputation?
Now, double materiality just means looking at this from two angles:
How the world affects the company
How the company affects the world
That’s it! Two lenses, one clear picture.
The Two Sides of the Lens:
Inside-Out (Impact Materiality):
What impact does the company have on people and the planet?
Examples:
Are they causing pollution?
Are they helping reduce poverty?
Are they using resources responsibly?
Outside-In (Financial Materiality):
What impact does the environment or society have on the company?
Examples:
Will climate change disrupt their supply chain?
Could new sustainability laws affect their bottom line?
Is public opinion shifting on social justice or diversity?
Together, this gives us the full story. Not just how the world changes business—but how business changes the world.
Why Does This Matter?
Because companies used to only care about what affected their profits. But now? The game has changed.
Customers care. Investors care. Employees care. And governments definitely care (hello again, EU rules 👋).
So being transparent about both sides of the story builds trust and keeps businesses ahead of the curve.
Double Materiality in Action
Let’s say your company sells bottled water.
From a financial lens: You care about droughts, plastic bans, and water prices.
From an impact lens: You should also care about your plastic waste, water use, and fair labour in your supply chain.
See? Two sides. Same bottle. Double the responsibility.
TL;DR
Double Materiality = What matters to you AND what matters to the world.
It's the two-way street of sustainability: you impact the world, and the world impacts you.
If you want to run a future-proof, responsible, and respected business, this lens is non-negotiable.
P.S. Don’t worry if all these ESG terms still feel a bit new—here at the Ecosource
Knowledge Hub, we’ll keep breaking them down, no jargon required.
Next up? We’ll start digging into practical tips for putting ESG into action in your everyday business decisions.
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