Translating sustainability reports now doubly important

These days, sustainability work forms a natural part of day-to-day business life, and double materiality assessment has become an increasingly important process in sustainability reporting. What’s more, it’s a requirement for all companies subject to the new Corporate Sustainability Reporting Directive (CSRD). But what does double materiality assessment even mean? And why can it also be important and useful for companies that are not directly subject to the new reporting requirements? This article takes a look at the term and how it could impact your company's strategy and work in the context of translating your sustainability report.

Just what is a double materiality assessment?

In sustainability reporting, a materiality assessment is a method and process that helps companies identify, assess and prioritise the most relevant areas where their operations have a material impact on sustainability. Previously, this assessment involved only an inside-out perspective, but with the introduction of new reporting requirements, double materiality assessment has become a new feature that takes into account two important dimensions – impact materiality and financial materiality. Thus “double” means that the assessment must now also include an outside-in perspective, i.e. one that not only focuses on how a company impacts its environment, but also on how the environment impacts the company financially in terms of sustainability; this is referred to as double materiality.

Impact materiality relates to the way a company affects the outside world, both environmentally and socially. It includes aspects such as carbon emissions, resource consumption and social responsibility. Financial materiality relates to the way external factors such as climate change and social challenges affect the company's business model and future development. Thus a double materiality assessment takes both of these dimensions into account to create a more nuanced picture and understanding of the impacts, risks, and opportunities linked to sustainability aspects within the business.

Which companies must conduct double materiality assessments?

Double materiality assessment is a requirement under the CSRD, an EU directive that aims to improve the quality and comparability of sustainability reporting, and to form a more relevant, nuanced picture and analysis of sustainability impacts from this dual perspective, thereby creating business value by identifying and engaging the entire value chain and key stakeholders such as employees, customers, suppliers, investors and other business partners.

The CSRD will be implemented in stages for different companies at different times, in brief as follows:

• 2024 (reporting 2025/2026): large companies with more than 500 employees
• 2025 (reporting 2026): large companies with more than 250 employees
• 2026 (reporting 2027/2028): small and medium-sized enterprises on regulated markets

However, this is also contingent upon fulfilment of certain conditions concerning such things as the balance sheet total and net sales. More detailed information on which companies will be subject to CSRD and when, can be found at: Frågor och svar om CSRD | FAR

Not just a legal requirement, more like a business opportunity

Preparing and tailoring reports to CSRD regulations can be time-consuming and resource-intensive, especially in the beginning, but it’s also important to recognise the potential benefits and business opportunities that such work brings, along with the advantages afforded by subsequent translations of the report and other documentation into relevant languages. As a process, the double materiality assessment creates a greater understanding of your company's business model and strategy, its impact on relevant stakeholders and on its own future development. Thus a report provides new perspectives and insights into impact, risks and opportunities – insights that can then be applied and put to use in the formulation of strategies that not only benefit the climate and the environment, but also future business development. The double materiality assessment and the sustainability report provide your company with a relevant basis for decision-making and the creation of competitive advantages and attractive development for your stakeholders.

Translating sustainability reports and other relevant documentation

Språkbolaget is passionate about language and translation, which brings us to the thing we find most rewarding! Once the extensive and important work of preparing the sustainability report and associated documentation is finished, it’s time to consider which of these documents need to be or ought to be translated into other languages. Even if your company is not directly subject to the new reporting requirements, you may well be – or might aim to be – a supplier or business partner with companies and organisations that are required to meet the requirements of the CSRD. In this case, an ability to provide relevant data and appropriate documentation in the right format – and present it in the language required by the recipient – can provide a clear competitive advantage. Publishing this information in multiple languages provides a (double) material advantage and a great way to reach out and inform your stakeholders in different countries about how your company is working and evolving in various sustainability areas.

Don't hesitate to contact us – we’re always happy to help!

Språkbolaget has a network of translators and reviewers who possess the necessary expertise in translating sustainability reports to make sure your company's employees, owners, customers, suppliers and other stakeholders have access to relevant information, no matter the country or language. We’re always available and look forward to discussing your current needs and future planning with you!