UNDERSTANDING THE CONCEPT OF DOUBLE MATERIALITY
In 2019, the EU’s Sustainable Finance Disclosure Regulation (SFDR) came into law, requiring investors to disclose their adverse impacts on planet and people. Double materiality speaks to the fact that risks and opportunities can be material from both a financial and non-financial perspective. In this briefing paper, Ksapa clarifies the concept of double materiality.
Understanding the Concept of Double Materiality
Tackling the climate crisis will require transformational change and substantial effort within the corporate sector, the investment sector and in society at large. And not just the climate crisis: biodiversity loss, global water scarcity, deforestation, inequalities, and human rights. If the corporate community and the financial sector are to play their parts in addressing these interlocking social and environmental crises, challenging new legal requirements that set a level playing field are both necessary and inevitable.
Key Takeaways?
In 2019, the EU’s Sustainable Finance Disclosure Regulation (SFDR) came into law, requiring investors to disclose their adverse impacts on planet and people. Double materiality speaks to the fact that risks and opportunities can be material from both a financial and non-financial perspective. In this briefing paper, Ksapa clarifies the concept of double materiality.
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