Materiality Assessment Benchmark: Insights from the field
The results of the materiality assessment benchmark studies provide exciting insights for your own CSRD reporting.
- Two benchmark studies reveal how DAX 40 and STOXX Europe 600 companies approach double materiality under ESRS.
- Climate change (ESRS E1) and own workforce (ESRS S1) are material at virtually every company surveyed.
- The number of material topics varies widely: from 12 to 86 per company in the DAX 40 study.
- Most companies have not yet reached best-practice level, especially when it comes to quantitative impact assessment.
- These benchmarks help you calibrate your own materiality process and identify where to focus effort.
Companies face the challenge of presenting their environmental, social and governance (ESG) performance in a transparent and comprehensible manner. A central component of the requirements for reporting in accordance with the European Sustainability Reporting Standards (ESRS) is double materiality. This analysis helps companies to identify relevant sustainability issues and assess their impact on the company and society.
In this article, we highlight the results of two recent benchmark studies on materiality assessment. The first study is the short survey of the German Accounting Standards Committee (GASC), which was conducted in June/July 2024 among the DAX 40 companies. The second study, conducted by the University of Cologne, examines the early application of CSRD materiality analysis in STOXX Europe 600 companies.
These analyses provide valuable information for companies wishing to optimize their sustainability reporting and meet the requirements of the ESRS.
This Excel template guides you step by step through the double materiality assessment and automatically generates your materiality matrix.
1) Materiality assessment benchmark study of the DRSC among DAX 40
In June/July 2024, the German Accounting Standards Committee (GASC) conducted a short survey on the status of the materiality assessment in accordance with the ESRS among the DAX 40 companies. Of the 40 companies, 34 participated, which corresponds to a high response rate of 85%.
Background to the benchmark study
The aim of the DRSC survey was to gain an overview of the implementation status of the double materiality assessment in the leading German companies. This analysis is particularly relevant for large public interest entities. These companies had to prepare a sustainability report in accordance with the Corporate Sustainability Reporting Directive (CSRD) as early as the 2024 financial year and apply the concept of double materiality.
Key results
The survey focused on several key aspects of the double materiality assessment, including the topic-specific ESRS, the number of sustainability topics identified and the auditor review process.
1. Application of the ESRS standards
All participating companies stated that they apply ESRS E1 (Climate Change) and ESRS S1 (Own Workforce) as part of their sustainability reporting. Almost all companies (33 out of 34) also plan to apply ESRS G1 (Business Conduct).
Other ESRS standards such as ESRS E2 (Environmental Pollution), ESRS E5 (Circular Economy) and ESRS S2 (Workforce in the Value Chain) were also identified as relevant by several companies.
2. Number of sustainability topics identified
The participating companies identified between 12 and 86 material sustainability topics on the basis of ESRS 1 AR 16. The wide variation in the number of topics shows that companies apply different approaches and priorities when assessing materiality. On average, 42.2 topics were classified as material, with a median of 40 topics.
3. Further topic-specific ESRS
| ESRS standard | Number of companies applying it |
|---|---|
| ESRS E2 (Pollution) | 20 |
| ESRS E3 (Water and marine resources) | 16 |
| ESRS E4 (Biodiversity and ecosystems) | 18 |
| ESRS E5 (Circular economy) | 26 |
| ESRS S2 (Workers in the value chain) | 25 |
| ESRS S3 (Affected communities) | 15 |
| ESRS S4 (Consumers and end users) | 23 |
4. Company-specific topics
32% of the companies plan to report no company-specific topics; 50% plan one to two company-specific topics; 15% plan three to seven topics; one company plans 19 company-specific topics.
5. Process review of materiality assessment
Another focus was the status of the process review by auditors. 41% of the participating companies (14) had already received a preliminary assessment from their auditors that their process is in line with the requirements of the ESRS. 44% (15 companies) were in intensive discussions with their auditors about the selected process at the time of the survey.
Discussion of challenges and findings
The results of the DRSC survey show that most DAX 40 companies have already made significant progress in implementing the ESRS standards. The broad application of ESRS E1 and S1 reflects a shared recognition of the most critical sustainability topics. However, the wide variation in the number of topics identified indicates different interpretations and approaches to the implementation of the double materiality assessment.
Close cooperation with auditors is also a key issue. It ensures that materiality assessment processes comply with regulatory requirements. This underlines the complexity and the high demands placed on transparency and traceability in sustainability reporting.
Overall, the DRSC study offers valuable insights into the current status of materiality assessments in leading German companies and serves as an important benchmark for other companies that will also have to deal with this topic as part of CSRD reporting.
2) Materiality assessment benchmark study of the STOXX Europe 600
The second study, conducted by Prof. Dr. Maximilian Müller and Nina Valkyser of the University of Cologne, focuses on the early adoption of the materiality assessment in accordance with the ESRS in the companies of the STOXX Europe 600 Index. This study provides in-depth insights into materiality assessments and reports on best practices and common challenges in the implementation of the new standards.
Background to the benchmark study
The study examines the early adoption of materiality assessment by companies in the STOXX Europe 600 Index for the 2023 financial year. Around 8% of the companies in the index adopted the CSRD standards early. The study categorizes the companies into "early adopters" and those that have implemented double materiality according to CSRD. A total of 48 companies were analyzed, representative of the index in terms of their sectors and size.
Results of the materiality assessment benchmark study
1. Materiality of subject standards
- Climate change and workforce: All companies surveyed classified ESRS E1 (Climate change) and ESRS S1 (Own workforce) as material. Most (39 out of 45) also considered ESRS G1 (Company Policy) material.
- Environment: ESRS E2 (Pollution), ESRS E3 (Water), ESRS E4 (Biodiversity) and ESRS E5 (Circular Economy) featured across multiple companies.
- Social: ESRS S2 (Workers in the value chain) and ESRS S4 (Consumers and end users) were identified as relevant by several companies.
2. Distribution and relevance of company-specific topics
More than half of the companies identified company-specific issues. Cyber security and data protection were the most frequently mentioned. Other common topics were product safety and financial stability.
The most common sub-topics across all companies included working conditions (69%), climate change mitigation (60%) and equal treatment and opportunities for all (60%).
3. Benchmarking: best practices and common methods
The study shows that none of the companies surveyed fully complies with best practice standards. Many are on the right track, particularly with regard to the step-by-step approach to materiality assessment. However, implementing a quantitative assessment of sustainability issues remains a challenge. Only 8% of companies currently use quantitative approaches to assess the impact and financial relevance of topics.
The study provides practical recommendations for companies wishing to improve their CSRD reporting.
Together with the results of the DRSC short survey, this study provides a comprehensive basis for companies to evaluate and further develop their own practices. It highlights the importance of systematic and well-documented materiality assessment as a basis for transparent and credible sustainability reporting.
Discussion: differences and similarities between the studies
The benchmark studies among STOXX Europe 600 and DAX 40 companies show clear similarities. Both groups flag climate change and workforce issues as universally material. Both studies emphasize the importance of CSRD audits and the need for clear, comprehensible reporting processes.
A key difference lies in the broader application of specific topic standards by the STOXX Europe 600 companies. While the DAX 40 companies show a wide spread in the number of topics reported, the early adopters in the STOXX Europe 600 focus more strongly on certain core standards and company-specific topics.
The CSRD study by the University of Cologne also highlights the importance of benchmarking to help companies improve their materiality assessment. This is especially relevant as many companies are still in the process of fully understanding and implementing the new requirements.
Carry out your double materiality assessment step by step. The Excel template automatically generates your materiality matrix and guides you through stakeholder analysis and topic scoring.
Frequently asked questions about materiality assessment benchmarks
Which ESRS topics are material at virtually every company?
ESRS E1 (Climate Change) and ESRS S1 (Own Workforce) were classified as material by all companies in both the DAX 40 and STOXX Europe 600 studies. ESRS G1 (Business Conduct) was also material at most companies. These three topics are a safe starting point for any materiality assessment.
How many material topics should my company typically identify?
The DAX 40 study shows a range of 12 to 86 material topics per company, with an average of around 42. There is no single right answer. The number depends on your industry, size and business model. Focus on quality and traceability rather than maximizing or minimizing the count.
Do auditors review the materiality assessment process?
Yes. In the DAX 40 study, 41% of companies had already received a preliminary assessment from their auditors, and another 44% were in active discussions at the time of the survey. Involving your auditor early reduces the risk of having to revise your process later.
How can I support my materiality assessment with a practical tool?
Our materiality analysis Excel template guides you step by step through the double materiality process and automatically generates your materiality matrix. For a more guided approach, the Materiality Master software offers additional support for digital stakeholder engagement and scoring.
