Materiality Assessment 2024: Everyone's doing it – but how well?
How companies implement Materiality Assessment in their 2024 CSRD reports – and where there is still room for improvement.
- Almost all Wave 1 companies conducted a materiality assessment in 2024, but quality varies considerably.
- Many reports lack methodological transparency: few companies visualize results or share scoring logic.
- The average CSRD report lists around 40 IROs, but more is not better without clear prioritization.
- Opportunities are consistently underrepresented: only 12% of IROs relate to positive opportunities.
- Companies that embed materiality assessment into strategy, risk management, and KPIs get the most value from it.
The materiality assessment is more than just an entry point into the sustainability report. It determines what companies have to report on in the first place. According to the CSRD and European Sustainability Reporting Standards (ESRS 1), it is the formal filter through which all sustainability topics must pass.
The defining feature here is double materiality. Companies must assess both how environmental and social factors affect their financial success (outside-in, i.e. financial materiality) and what impact their business activities have on the environment and society (inside-out, i.e. impact materiality).
For Wave 1 companies reporting on 2024 financials, this dual perspective was mandatory. Following the Omnibus package (in force since 18 March 2026), the scope of who must report has narrowed significantly. The new threshold requires companies to have more than 1,000 employees AND more than €450m net turnover (both criteria cumulatively). Many companies that would have been in scope under the old rules are no longer obligated.
But how well does this work in practice?
This article is part of the "Inside CSRD" series. It takes an in-depth look at the quality of materiality assessments in 2024 reports, drawing on analysis of more than 200 CSRD reports examined in studies by EY, Deloitte & DRSC, PwC (webcast), Horváth, KPMG, KEY ESG, European Issuers and others.
The Materiality Assessment 2024 is an integral part of almost every report. Methodological maturity, transparency, and strategic embedding differ considerably, though.
1. Status quo: everyone is doing it, but how well?
First, the good news: almost all companies whose reports were examined have conducted a Materiality Assessment, as required by the CSRD.
The studies also show that the quality and maturity of these analyses vary considerably. In some cases, there is a world of difference between a formal tick-box exercise and a transparently documented, strategically embedded analysis.
Duty fulfilled, but room for improvement
Several studies identify typical weaknesses:
- KEY ESG found that the methodology for Materiality Assessment is hardly comprehensible in many reports. Few companies use a materiality matrix, and almost none present numerical evaluation methods.
- According to Horváth, only 20% of companies visualize the results of their Materiality Assessment, for example in the form of a matrix as recommended in ESRS 1 (Appendix F).
- EY reports that stakeholder engagement was addressed by all companies, but often only superficially: 26% of companies described their engagement in text form only, without visualization or further detail.
Some reports also remain vague when it comes to the link with strategy, risk management and target systems. That link is precisely where dual materiality delivers its real value.
Numbers without context
Some companies list a large number of "Impacts, Risks & Opportunities" (IROs) without any recognizable prioritization or comprehensible selection logic.
EuropeanIssuers points out that 77% of companies used external support for the methodology. That helps with getting started, but does not automatically lead to strategic depth.
Materiality assessment is near-universal in 2024 CSRD reports. Methodological maturity is lacking in many cases, though. Companies are closely aligned with minimum regulatory requirements, but genuine transparency, stakeholder involvement and strategic prioritization are still rare.
2. One analysis, many levels of maturity
A key output of materiality assessment under the CSRD is the identification of IROs (Impacts, Risks & Opportunities). They form the backbone of the sustainability report: only topics with at least one material IRO require disclosure.
The studies show that the range of reported IROs is enormous, and so is their quality.
Average: around 40 IROs per report
| Study | Average IROs | Range |
|---|---|---|
| Horváth | 39 (median: 36) | Not specified |
| Deloitte / DRSC | 42 | 5 to 118 |
| KEY ESG | 38 | 11 to 102 |
These figures show that while some companies cover a broad range of topics, others greatly reduce their analysis. Reasons vary from data availability to strategic caution.
Content distribution: risks dominate, opportunities are missing
The qualitative composition of IROs is particularly revealing. According to Horváth, the average distribution is as follows:
- 63% of IROs relate to negative impacts
- 25% relate to risks
- Only 12% relate to opportunities
This imbalance is striking. Reports focus heavily on problems, while potential opportunities remain underrepresented. Business models for the energy transition, circular economy, or sustainable innovation exist in many companies but are rarely named as strategic opportunities.
What the numbers do not tell you
The absolute number of IROs is not a quality indicator. One hundred entries without prioritization offer little practical value. What matters is whether the IROs were selected, justified and prioritized in a comprehensible way. Many reports fall short here:
- KEY ESG criticizes the lack of documentation of the valuation methodology.
- EY notes that some companies list IROs without context or reference to the overall strategy.
- Deloitte finds that IROs in some companies are only formulated very briefly.
A company working with a small number of well-founded IROs may be more transparent than one presenting 100 unsorted entries.
Save over 500 hours with our IRO database. It contains over 850 pre-formulated impacts, opportunities & risks, ready to use for an efficient Materiality Assessment.
3. Comparing maturity levels: minimum standard vs. best practice
While materiality assessment 2024 appears in all reports, quality of implementation varies widely. Some companies simply fulfill their obligations. Others use the analysis as a strategic tool. The studies show clear patterns at different maturity levels.
Major differences between company types
According to Deloitte/DRSC, larger companies, especially DAX companies, report more frequently in full compliance with ESRS. Their average number of identified IROs is also higher, which points to a more structured approach to materiality assessment.
Companies that have previously reported under GRI or TCFD show stronger methodological foundations, based on findings across studies.
What distinguishes best practice
The companies that use their Materiality Assessment most strategically share several characteristics:
- Interdisciplinary teams (ESG, strategy, risk, communications) develop the analysis together
- Stakeholder dialogues are documented with target groups, methods and results
- The assessment is structured and weighted using scoring models or threshold tables
- Results are linked to targets, KPIs and measures, not presented in isolation
- IROs feed into risk reports, strategy processes and target systems
The result: the Materiality Assessment becomes a tool for strategic positioning and consistent communication, not just a regulatory checkbox.
4. Conclusion: from duty to positioning
The 2024 data makes one thing clear: materiality assessment is being implemented by almost all CSRD-obligated companies. How well it is done varies considerably. Some organizations take a methodically sound, transparent and strategically embedded approach. Others treat it as a compulsory exercise.
What many reports currently show
- Methodology remains partially opaque
- Stakeholder perspectives are often still superficial
- Visualizations and evaluation logic are rarely disclosed
- Opportunities are mentioned far less frequently than risks or negative impacts
At the same time, there are positive examples. Companies that treat their Materiality Assessment as a management tool, link it to strategic goals, KPIs and risk analyses, create real value for leadership and report readers alike.
Practical recommendations
- Integrate the Materiality Assessment into strategy and management, not just the report
- Be transparent about methodology, prioritization and stakeholder dialogue
- Include opportunities, not just risks and negative impacts
- Prioritize and contextualize IROs rather than simply listing them
The CSRD creates space for well-founded sustainability communication. The materiality assessment is the gateway. Companies that create clarity, structure and depth here gain a strong position, both regulatorily and strategically.
A structured Excel template for your double materiality assessment under ESRS. Covers both impact and financial materiality, with built-in scoring logic and stakeholder weighting.
Frequently asked questions about materiality assessment
Is the materiality assessment still required after the Omnibus changes?
Yes, for companies that remain in scope. Since 18 March 2026, reporting is required only for companies with more than 1,000 employees AND more than €450m net turnover (both criteria cumulatively). For those still obligated, the double materiality assessment remains the core of the CSRD report.
How many IROs should a CSRD materiality assessment include?
There is no fixed number. Studies show an average of around 38 to 42 IROs per report in 2024. More important than quantity is quality: IROs should be clearly defined, justified and prioritized. A smaller set of well-documented IROs is more useful than a long undifferentiated list.
Why are opportunities so rarely included in materiality assessments?
Studies consistently show that around 63% of reported IROs relate to negative impacts and 25% to risks, while only 12% cover opportunities. Companies tend to focus on compliance and risk mitigation. Opportunities such as circular economy models or sustainable product innovation are often identified but not formally named in the assessment.
What makes a best-practice materiality assessment?
Best-practice companies involve interdisciplinary teams, document stakeholder engagement in detail, use scoring models for prioritization, and link IROs directly to strategic goals and KPIs. The assessment is treated as a management tool, not a reporting formality. See the four-step guide for a practical approach.
