Dual materiality requires companies to assess and disclose not only how sustainability issues affect their business, but also how their business activities impact society and the environment.

It is already the basis of new mandatory disclosure requirements under the EU’s Corporate Sustainability Reporting Directive (CSRD) and is also a central element of new guidelines published in China last month.

As a result, dual materiality is likely set to become the de facto global standard for sustainability reporting, meaning companies should prepare for and embrace it, whether they fall within the scope of the mandatory requirements or not. (More on lexology.com)