Should companies focus solely on how ESG issues affect their bottom line, or should they also be cognisant of their broader impact on society and the environment?

This question revolves around the double materiality concept, which acknowledges that materiality can extend further than what is financially material to a company and encompass a business’ wider impact on the world.

In fact, a company’s impacts on the planet and society (outward impacts) often evolve into financially material impacts (inward impacts). This process is explained by the term dynamic materiality.

In 9fin’s latest ESG Educational, we delve into how double materiality and dynamic materiality are interlinked; we look into what these concepts really mean, their importance, and sustainability standards’ diverging approaches to the topic of materiality.