Screenshot 2023 11 06 at 11 18 57

Unveiling Double Materiality: Transforming Impact Data into Actionable Business Insights

The Impaakt Team

8 min Read Time | November 6th 2023

With sustainability issues becoming part of global dialogues, business reporting has transitioned to recognize the dual significance of these concerns. This brings us to the concept of double materiality – an approach that harmonizes the intricate interface between sustainability concerns and their tangible repercussions on businesses.

What is Double Materiality?

Double materiality is a concept in financial and non-financial reporting that acknowledges two dimensions of material issues. The first pertains to the traditional understanding of financial materiality: how environmental and social issues can influence a company’s financial performance, its operations, and its long-term prospects. The second dimension takes a more external lens, examining impact materiality, or how a company's activities and strategies affect the broader societal and environmental landscape.

Together, they form the basis of Double Materiality.

The Imperative for Double Materiality

For years, the limelight has been on ESG metrics. While this marked a notable move towards corporate accountability, a disconnect still exists between reducing the negative impact on society and the environment and a company's business strategies, or better still focusing on creating products and services that have a positive impact.

Double materiality has the potential to close this gap by underscoring not just the challenges but also the opportunities embedded in sustainability. It acknowledges that sustainability isn’t merely a defensive strategy but also a launchpad for innovation, market differentiation, and enriched stakeholder engagement.

Our approach to defining materiality

Instead of relying solely on traditional metrics or self-reported data, Impaakt harnesses the power of collective intelligence. By tapping into a diverse community, Impaakt ensures a more holistic and unbiased assessment of a company's impact.

Impaakt’s community of 50,000 trained members collaborates to document, analyze, and evaluate the impact of various companies. Through this collective effort, we have amassed a database of around 1 million materiality assessments, aggregated into comprehensive company scores and detailed topic scores. This methodology stands in contrast to traditional, one-sided evaluations, providing a multifaceted perspective derived from the voices of our global society.

Further, one of the standout features of this approach is its focus on industry-specific topics that provide a clear picture of each company’s activities. Recognizing that material issues vary across sectors, Impaakt empowers its community to select the most pertinent social and environmental topics for each industry. This approach ensures that assessments are not only relevant but also reflect the real-world concerns and priorities of a diverse group of individuals. For instance, while water conservation might be a critical topic for the beverage industry, data privacy could be more material for tech companies. By allowing the community to weigh in on these topics, Impaakt ensures that the most significant impacts—whether they stem from a company's operations, products, services, or philanthropic efforts—are brought to the forefront.

Using a concrete case study, Coca-Cola’s materiality map highlights how distinct patterns emerge, notably in the form of three prominent bubbles that tower above the rest.

Coca-Cola's Materiality Map
Coca-Cola's Materiality Map

These bubbles signify the most pressing concerns identified by our community, and it comes as no surprise that plastic pollution, greenhouse gas (GHG) emissions, and adverse health impacts are the most material topics concerning Coca Cola.

Plastic pollution, particularly in the form of product waste, presents a significant challenge. Recent data indicates that Coca Cola generated a staggering 5.95 million tonnes of waste, predominantly comprised of packaging. Evidently, Coca Cola stands as one of the major contributors to plastic pollution, consistently ranking among the top offenders for five consecutive years.

Greenhouse gas emissions further exacerbate the environmental impact. Coca Cola's carbon footprint is significant, emitting 64 million metric tons of CO2e. To put this into perspective, this emission volume equates to the exhaust of 13 million cars driven for an entire year.

Finally, Coca Cola’s contribution to health issues is concerning. A substantial 62% of their sales are derived from sugary soft drinks, a significant factor exacerbating global health problems.

By understanding these material concerns, we gain valuable insights into the true impact of Coca Cola on our planet and society. This nuanced assessment, made possible by our diverse and informed community, provides a comprehensive understanding of the company's global footprint.

Through this approach, we empower not only our community but also society at large to make informed decisions, advocating for change and encouraging companies to adopt more sustainable and responsible practices.


Based on the article you've just read, here are some more we think you'd be interested in.

Impaakt new website icons

9 Min read

Impaakt secures close to 8 million USD in latest fundraising round

Ushering in a new era of impact measurement and business transformation

Join us 1

10 Min read

Sustainable Finance Power to the People!

Retail investors - individuals like you and you, hold a significant place in the sustainable finance transition.

Zac ong V3j7yy3 Czq U unsplash

17 Min read

The Evolution of Impact Data: Trends and Innovations

Exploring the latest trends and innovations in impact data, unlocking new possibilities for measuring and driving positive social and environmental change.

Martin adams r8lsgdwn Rp U unsplash

10 Min read

Beyond Net Zero: The Broader Perspective Needed in Sustainable Investing

The net-zero movement has sparked significant climate action, but it shouldn't be seen as a one-size-fits-all solution for identifying environmentally responsible investment opportunities.

Danist soh n 3 Pn7 Ybe s unsplash

13 Min read

7 Key Reasons to Complement ESG with Impact Data

Dive into the importance of using impact data alongside traditional ESG approaches for sustainable investing.

Jonny gios Sqjh KY9877 M unsplash

11 Min read

Overcoming the Challenges of Assessing Sustainability with On-Demand Research

Discover Impaakt's game-changing solution supporting sustainable investors who want to make informed decisions and comply with evolving regulations.

Screenshot 2022 12 15 at 13 55 01

7 Min read

Forbes feature Impaakt "Rating Corporations’ Impact On Society And The Earth"

Read what Forbes have to say about our Global Impact Ranking Report

Web page 01

11 Min read

Global Impact Rankings Report 2022

Our annual Global Impact Rankings Report is out, discover which companies are leading the way on environmental & social impact issues and which need to step up their efforts.

World Green Background Sustainability small

Let’s take action together

With the right investment companies having a positive impact on the planet are able to flourish. Our community forms part of that mission by measuring their impact.

Join Us