Materiality Assessment: Excel vs. software?
Find out whether you should use Excel or specialized software to carry out the double materiality assessment.
- The double materiality assessment is a core requirement under the CSRD, and companies must decide between Excel and specialized software.
- Excel is cost-effective, flexible, and easy to start with. It works especially well for smaller companies using a proven template.
- Specialized software offers automation, better data visualization, and a clear audit trail, but comes at a higher cost.
- The right choice depends on your company size, data volume, budget, and long-term reporting needs.
- Both tools can work; what matters most is choosing a consistent approach and sticking with it each year.
The double materiality assessment has established itself as a key tool within the framework of the Corporate Sustainability Reporting Directive (CSRD). This method enables companies to assess both financial and non-financial aspects of their business activities in order to focus on their material topics.
But how do you carry out a double materiality assessment? EFRAG has published a guide on how to do this materiality assessment. Many companies face a choice between traditional methods such as an materiality assessment Excel template and specialized ESG software solutions. Both approaches have clear advantages and disadvantages, which matter especially in the context of CSRD.
Double materiality assessment with Excel
Advantages of using Excel
Excel offers real benefits for companies carrying out a materiality assessment, particularly for smaller organizations.
- Flexibility and adaptability: Easily adapt templates and formulas to your specific needs and ESRS requirements.
- Low cost and easy setup: Most companies already hold Excel licenses, so no additional software purchase is needed. The only cost is a materiality assessment template.
- Familiar to your team: Many employees use Excel daily. That familiarity shortens the learning curve and keeps the process running smoothly.
Disadvantages of using Excel
Despite its benefits, Excel has some real limitations for double materiality assessment.
- Higher risk of manual errors: Typing mistakes, wrong formulas, or inaccurate data can compromise results. Using a proven Excel template reduces this risk.
- Text-heavy guidance is hard to display: Templates often guide users step-by-step through the process, but Excel is not well suited for displaying large amounts of instructional text clearly.
- Limited data analysis capabilities: Excel offers basic functions, but struggles with complex data models and interactive dashboards.
- Template updates require manual migration: When a template is updated, any previously entered data must be transferred manually to the new version.
According to this CSRD software study by PwC, Excel remains one of the most popular tools for sustainability reporting. For companies looking for a simple and cost-effective solution, Excel can be a strong choice. Larger companies or those with extensive sustainability requirements may want specialized software instead.
This Excel template guides you step by step through the double materiality assessment and automatically generates your materiality matrix.
Double materiality assessment with software
Advantages of using specialized software
Specialized materiality assessment software, such as Materiality Master, offers several advantages that matter in the CSRD context.
- Automation and precise data analysis: Automated data processing reduces errors and ensures consistent, accurate results. This is critical for CSRD compliance.
- Data visualization and reporting: Interactive dashboards, charts, and graphs let you interpret and present complex data at topic or sub-topic level.
- Auditability: Software typically provides a traceable audit trail, which supports the CSRD audit by auditors.
- Access permissions: Role-based user permissions allow you to manage sensitive data securely.
- AI support: AI features can increase accuracy and efficiency. We have compiled a list of helpful materiality assessment AI prompts for use with either software or Excel.
Disadvantages of using specialized software
- Higher licensing and implementation costs: Acquisition, implementation, and ongoing maintenance can be significant. For smaller companies with limited budgets, this is a real hurdle, especially when combined with CSRD consulting fees.
- Training time required: New software often requires a familiarization period that can temporarily reduce productivity.
- Vendor dependency: Companies relying on CSRD software depend on the provider for support, updates, and regulatory alignment. Watch for good export functions and interoperability.
- Complex selection process: A CSRD study by Ubirch confirms a fragmented software landscape. We have developed a CSRD software guide to help you identify the right tool for IRO (Impacts, Risks and Opportunities) identification. The growing number of ESG reporting solutions makes this choice increasingly important.
Comparison: Excel vs. software for the CSRD
Performance and efficiency
Software solutions have a clear edge over Excel in automation and error prevention. Automated processes handle large data volumes quickly and accurately, which matters a lot when you are working with extensive sustainability datasets. Excel requires manual input and calculations, which takes more time and carries more risk. If you do use Excel, proven templates are well worth the investment.
For data visualization, software is also ahead. It handles complex data models and flexible dashboards well. Excel can display a basic materiality matrix, but hits its limits with more advanced analysis needs.
User-friendliness and training
Excel is widely known. Most teams already use it, which keeps the learning curve short. Specialized software sometimes requires a longer onboarding period, though intuitive tools like Materiality Master reduce that burden. Purpose-built interfaces tend to be more efficient for sustainability analyses, especially when navigating complex instructions or visualizing results.
Costs and resources
| Dimension | Excel | Specialized software |
|---|---|---|
| Initial cost | Low (existing licenses + template) | Higher (licenses, possible implementation) |
| Ongoing cost | Minimal | Maintenance and support fees may apply |
| Training effort | Low (familiar tool) | Moderate to high depending on complexity |
| Accuracy | Depends on template quality | Higher through automation |
| Scalability | Limited for large data volumes | Strong |
| Audit trail | Weak | Strong (traceable history) |
| ROI | Positive short-term | Higher long-term through efficiency gains |
When to choose Excel vs. software
Excel is the better choice when:
- You have a limited budget: Excel uses your existing Office licenses. The only added cost is a quality template.
- Your team already knows Excel: Familiarity keeps training short and integration smooth.
- You need flexibility: Excel adapts easily to your specific requirements.
- You want a quick start: Buy a template and begin immediately, without a software selection process.
Software is the better choice when:
- You have large data volumes: Automation handles high data complexity without manual workarounds.
- Precision is critical: Automated processes reduce human error, especially when identifying ESRS data points to report.
- You need advanced visualization: Software dashboards present complex findings clearly for stakeholders and auditors.
Recommended steps for companies
- Conduct a needs analysis: Assess your specific requirements and available resources before deciding.
- Run a cost-benefit analysis: Weigh implementation costs against efficiency gains and long-term accuracy.
- Factor in training: Account for onboarding time, especially with more complex software solutions.
- Think long-term: The sustainability report is published annually. Scalability and future-proofing matter.
The double materiality assessment is an important strategic tool for companies. Choosing between Excel and software affects not just your efficiency, but your ability to produce transparent, CSRD-compliant sustainability reports. Looking at materiality assessment benchmarks from other companies can give you useful real-world context for your decision.
At a time when sustainability is becoming a key factor in business strategy, picking the right tool is a meaningful step toward responsible and future-proof corporate governance.
Frequently asked questions about materiality assessment Excel vs. software
Can I really do a CSRD materiality assessment in Excel?
Yes. Excel works well for many companies, especially when you use a structured, proven template. The key risks are manual data entry errors and limited visualization options. A high-quality template like the materiality assessment Excel template mitigates these risks significantly.
When does it make sense to switch from Excel to software?
Consider switching when your data volumes grow, when multiple people need to collaborate simultaneously, or when auditors require a more traceable process. For most large companies with complex supply chains, software offers a better long-term return.
What is Materiality Master and how does it compare to Excel?
Materiality Master is a specialized software tool for double materiality assessment. Compared to Excel, it offers automation, better data visualization, built-in audit trails, and role-based access. It is particularly useful for companies that want to reduce manual effort and produce results that stand up to external audit.
Does the choice of tool affect the CSRD audit?
Yes, it can. Auditors reviewing your sustainability report will also assess how the materiality assessment was conducted. Software solutions typically provide a clearer audit trail than Excel. If auditability is a priority, this is a strong argument for specialized software.
