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Business owners and materiality: What is “double materiality” and does it matter?

Private business owners and entrepreneurs know that having timely, decision-useful data is vital to the growth and performance of their business. Too much data can drain time and resources, which is why it’s crucial to identify what matters most.

The concept of materiality can help business owners pinpoint, measure, and manage the most relevant data for their firm. Materiality also matters for customers, stakeholders, and investors.

Recently, UBS considered materiality and why it matters today, particularly increasingly extends to cover sustainability metrics around environmental, social, and corporate governance (ESG)

Performance. Read the full report here. 

In another article, they took a deep dive into sustainability materiality by

examining how ESG factors in the outside world can affect

an entrepreneur’s business. Read the full report here. 

Today, they explore how sustainability materiality is increasingly focused on so-called “double materiality,” investigate why entrepreneurs may have to pay closer attention to their firm’s impact on the wider world and suggest how business owners can make an impact in the most financially efficient way.

So, firstly, what is double materiality?

The “double materiality” approach considers that sustainability trends have two broad types of influence on a company and society. On one hand, companies are affected by sustainability issues, and on the other, companies drive sustainability effects that consumers, society, employees, and investors increasingly care about.

Find out more about double materiality, how it affects businesses, and what it means for sustainability. Download the latest report from UBS here.