Scholarly record

DOUBLE MATERIALITY UNDER ESRS: EVIDENCE FROM FIRST-YEAR CSRD DISCLOSURES OF EUROPEAN COMPANIES

Eleonora Stancheva-Todorova

Abstract

The introduction of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) represents a major transformation in sustainability reporting in the European Union. A key innovation of the ESRS framework is the concept of double materiality, which requires companies to disclose both the financial implications of sustainability issues and their impacts on society and the environment. This study investigates how European companies operationalize double materiality in the first cycle of CSRD implementation, based on sustainability disclosures for the financial year 2024. Using qualitative content analysis of reports from seven large European companies across different sectors, the study identifies implementation patterns, levels of methodological transparency and key challenges. The study combines qualitative analysis with structured evidence-based assessment to enhance analytical robustness. The findings reveal significant variation in the maturity of double materiality implementation. While some companies demonstrate advanced integration of financial and impact materiality into strategy and risk management, others remain at intermediate or less explicit stages of implementation. Key challenges include limited methodological transparency, insufficient integration of dual perspectives and uneven linkage to strategic decision-making. The study contributes to the literature by providing early empirical evidence on ESRS-aligned reporting practices and offers insights into the evolving implementation of double materiality in the European regulatory context.

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