Lesson Overview
Seeing both sides clearly
Double materiality can sound technical, but the basic idea is straightforward. It asks us to look at how sustainability issues affect a company and how a company affects the world around it.
This lesson cuts through the jargon and focuses on the two perspectives at the heart of the concept.
In this lesson, we explore:
- The outside-in perspective: how sustainability issues can affect a company’s financial position and performance
- The inside-out perspective: how a company’s activities can affect the environment, society and broader stakeholders
- Why regulatory focus often leans toward the external view
- Why materiality needs to be considered thoughtfully, not only through a short-term financial lens
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A practical explanation of double materiality and why both perspectives matter in sustainability reporting.
Vincent McCarthy, CFA
Founder, Responsible Investment Institute®