Our impact materiality analysis involves scoring potential impacts based on their scale, scope, remediability and likelihood, using a systematic approach that quantifies these aspects.

Those aspects are assessed at several areas of the value chain : own activities, suppliers (upstream) and final clients (downstream).

Financial materiality is determined by assessing how environmental and social issues could affect the company’s financial performance, generating risks and/or opportunities. This evaluation considers the severity and likelihood of such effects, as well as the expectations of stakeholders and the company’s reliance on natural and human resources. This methodology is the official approach suggested by EFRAG in Implementation Guidance on Double Materiality. That means Greenly system proposes 2 kind of questions to assess all risks and opportunities of each sub-topic: - Stakeholders Reactions to company’s ESG impacts: additional questions of each positive and negative impact question (activated if impact score exceeds 50%) - Resources dependencies: systematically proposed for all sub-topics, “risk-oriented” formulated (the company can then adapt the formulation of its IROs depending on if they want to qualify it either as a risk or an opportunity

The Likelihood score ranges from 0 to 1. In the materiality assessment, the combined scale, scope, and remediability of an impact are multiplied by the likelihood score to calculate the final materiality score. In this way, the likelihood score serves as a weighting factor, representing the probability of an impact occurring. It helps refine the assessment by considering both the magnitude of the impact and the likelihood that it will happen.

For positive impacts, remediability is not assessed in the DMA questionnaires because the ESRS advises focusing on the scale, scope, and likelihood of the positive impact rather than its reversibility. Unlike negative impacts, where remediability plays a key role, positive impacts are considered based on their potential to create benefits, without the need for a remediation assessment.

Dependencies are defined as the company’s reliance on natural, human, and social resources for their business process.

To determine the materiality of a dependency, Greenly's DMA system identifies how changes in the current conditions of access to resources (price increase, quality decrease, etc.) would be expected to affect business continuity and financial performance over different time horizons, generating material risks or opportunities for the company.

Greenly uses benchmark data from public sources like SASB and GRI, as well as internal research based on our ESG expertise and data from previous DMA assessments conducted for other clients.

Sectoral information is sourced from a combination of industry databases, expert analyses, and the latest regulatory frameworks, which are continuously updated and integrated into our advisory services.

Greenly’s questionnaires account for impacts, risks, and opportunities (IROs) before considering any actions to manage them. This approach ensures that gross IROs are assessed in their entirety, without being influenced by any mitigating or enhancing measures. By focusing on gross IROs, we capture the full scale of potential effects. To avoid any confusion, we clearly outline this methodology in our guidance material, making it explicit that the assessment reflects the total, unadjusted IROs.

The Greenly financial materiality system is based on the methodology recommended by EFRAG in its ESRS Implementation Guidelines on Double Materiality. According to this methodology, the EFRAG states that companies may determine whether a specific sub-topic or IRO is material, even if its financial impact cannot be reliably quantitatively measured at the time of reporting. However, the company can still align the proposed financial materiality scores in the Greenly system with financial metrics and explain these connections in the comment box for each question.

For more details, refer to pages 33, paragraphs 131, 132, and 134 of the EFRAG's Implementation Guidance on Double Materiality.

No, it is not required for a company to systematically deploy a quantitative methodology to assess materiality in the context of CSRD reporting. The official EFRAG documentation clearly states that the assessment of materiality should be based on both quantitative and/or qualitative thresholds, and there is no obligation to rely mostly on quantitative metrics such as EBITDA for risk severity or GHG emissions benchmarks for climate impact.

In particular:

• Materiality assessment is based on severity and likelihood, which includes both qualitative and quantitative considerations.

• ESRS 1 does not prescribe specific thresholds for materiality, meaning that companies must apply judgment and determine appropriate criteria based on their specific facts and circumstances.

• While supportable evidence and objectivity should be prioritized when setting thresholds, the EFRAG’s implementation guidance explicitly acknowledges that reasonable quantification may not always be possible to support materiality assessments.

This means that companies have the flexibility to use a combination of qualitative insights, stakeholder feedback, expert judgment, and industry context alongside quantitative data when assessing the materiality of impacts, risks, and opportunities. Auditors cannot impose a rigid requirement for purely data-driven methods if the ESRS does not mandate it.

Thus, companies should develop a balanced approach to materiality assessment that aligns with both EFRAG’s official guidance and their business context, rather than defaulting to purely financial or numerical evaluations.

The core source that Greenly used to design all its questionnaires is the AR16 of CSRD Delegated Act, which proposes a comprehensive list of ESG sub-topics, spread accross all ESRS.

The detailed content was then derived from a detailed review of ESRS disclosure requirements, expert consultations, and user feedback, ensuring that each questionnaire comprehensively covers all relevant aspects of the standards.

The company is advised to refer to our comprehensive Double Materiality Guidance document for a detailed explanation of this process. Below is the link to the latest version of the document.

Navigating through the Double Materiality assessment can sometimes be challenging, especially when you encounter questions that are not based on physical or scientific evidence. Our double materiality system, designed to comply with CSRD regulation, consists of a set of forms that ask high-level, qualitative, closed-choice questions covering all ESG topics. Here’s how you can effectively answer these questions even if you are not an ESG expert.

When faced with a challenging question on a Double Materiality form, consider the following strategies to guide your response:

Start by reviewing any existing information within your company. This could include internal reports, previous assessments, or data collected for other purposes. Using available resources can provide a solid foundation for your answer.

Use your judgement and common sense to interpret the question and provide a reasonable response. Think about how the question relates to your company’s activities, impacts, and operations.

Be honest and transparent in your responses. If there are uncertainties or gaps in information, acknowledge them. Sincerity in your answers helps build credibility and trust in your ESG reporting.

Engage with colleagues or relevant departments to gather diverse perspectives and reach a consensus on the answer. Collaborative discussions can offer valuable insights and lead to more comprehensive responses.

Refer to sector-specific information and benchmarks. Understanding industry standards and practices can help you frame your response in the context of common sectoral trends and expectations.

Look for relevant articles, research papers, and documentation in the media. External sources can provide additional context and support for your answers, especially for complex ESG issues.

When specific data or evidence is lacking, trust your intuition. While it is essential to base answers on solid information when possible, sometimes intuition guided by professional experience and understanding of your company’s values can be valuable.

If you are still lost after following this process, don't hesitate to contact our Support Team via the chatbot, they can link you to one of our ESG experts for guidance!

Currently, Greenly’s system doesn’t allow adding extra sub-topics or sub-sub-topics. We made this decision because we’ve based our topic definitions on the official ESRS text, and the EFRAG has not yet released final industry-specific standards. As a data-driven company, we also want to maintain a consistent structure of sub-topics across all clients. This consistency ensures data comparability and enables the creation of benchmarks that improve materiality analyses over time. Allowing each company to define its own sub-topics and criteria would make this much harder to achieve.

All actions in the DMA questionnaires are logged with timestamps, creating a detailed record that can be reviewed and audited to track decision-making and any changes made.

The system allows users to attach supporting documents and external links, and provides space for explanatory notes, ensuring that all answers are fully supported.

The value chain assessment identifies all key activities, from sourcing raw materials to delivering the final product. It evaluates the impacts at each stage using tools within our platform that connect these activities to potential material issues.

According to EFRAG guidelines, companies are not strictly required to consult all stakeholders when assessing materiality. However, stakeholder engagement is strongly recommended as a best practice. Engaging stakeholders helps companies understand the significance of various environmental, social, and governance (ESG) issues from multiple perspectives, which aids in identifying and prioritizing material matters. This can include input from employees, customers, suppliers, local communities, and investors.

Our philosophy aims at limiting the amount of efforts to collect information for materiality assessment.

That being said, the standard offer does not include direct external stakeholder engagement tools. Instead:

It's worth noting that Greenly is considering future enhancements to their value chain engagement feature, which could potentially include more direct external stakeholder input⁠.

External stakeholders are not systematically involved in the Greenly DMA system. Instead, our questionnaires are designed to help assess materiality across different areas of the value chain. The company can then answer based on its existing knowledge or, if needed, deploy appropriate means to gather additional information. If input from external stakeholders is necessary, they can be engaged using the "DMA for External Stakeholders" questionnaire, provided by Greenly.

According to EFRAG guidelines, companies set their own thresholds for financial and impact materiality based on their specific context and operational dynamics. These thresholds determine which ESG topics are significant enough to require reporting, using a combination of qualitative and quantitative assessments.

The company is responsible to define the materiality thresholds that suit best its understanding and visions about what should be the important topics and sub-topics to treat in its ESG reporting perimeter.

No mandatory guidelines are to be followed to define those thresholds, which may rely on either qualitative insights (internal opinion, agreed common sense, etc) or quantitative insights (% of revenue/EBITDA/expenses, amount of waste, number of incidents, etc).

By default, Greenly considers an activity material if either its impact or financial score exceeds 75% when scores are normalized to 100. This approach simplifies the materiality assessment, ensuring significant topics are flagged for action and reporting​. The 75% value comes from internal Double Materiality benchmark (use of past double materiality analysis carried out with other Greenly clients and public DM analysis of major companies).

Keep in mind that this value is relevant in particular for SME and small groups (under 1500 employees), and should be lower in case your company is bigger (the more a company is bigger, the bigger are the impact and risks consequences in absolute).

If necessary, the user is able to modify the thresholds in case the quantitative scores may be biased and additional adaptation is needed to represent more faithfully the material sub-topics of the company.

Greenly provides a set of predefined thresholds based on industry standards, which the undertaking can customize. The industry standards we use come from public sources such as SASB, and also come from Greenly own R&D efforts to produce more detailed benchmarks, using ESG reports of many companies, and accumulated DMA data from our other CSRD clients.

The company's management is responsible for deciding the materiality of issues and information, including climate-related matters, under the oversight of the certifier/auditor. The information published by listed companies regarding their materiality analysis and results is also within the regulator's supervision scope.

Most companies currently contribute to climate change to varying degrees due to their consumption or production of fossil energy. Additionally, climate change will increasingly affect business activities and their ability to create value, whether due to physical risks induced by climate change or the political and commercial responses to mitigate climate change in line with the Paris Agreement. In this context, few European companies will be able to justify the non-materiality of climate issues given their contribution to climate change relative to European objectives (-55% by 2030 compared to 1990, carbon neutrality by 2050) and their exposure to physical and transition climate risks within the EU and beyond.

To justify that the consequences of climate change on the company are not material, it is necessary to conduct a physical and transition risk analysis to demonstrate that the company's assets, products, and services will not be significantly exposed in a high-emission scenario and in a scenario limiting global warming to 1.5°C.

To justify that the company's contribution to climate change is not material, it must be shown that the magnitude of its GHG emissions is negligible. An approximate inventory across all three scopes is necessary. This inventory should then be compared with relevant magnitudes, which depend on the company's activities and specifics. Here are some benchmarks that can be used to understand these magnitudes: emissions of countries, sectors, different types of installations, or per person, or relative to revenue.

It would depend on the package selected by the Company. with "ESG Hero" package, all completed analyses undergo a review by Greenly’s team of experts to ensure the quality and relevance of the findings, providing a layer of human oversight to complement the automated processes.

Greenly uses different sources to advise its clients on how to identify important questions/sub-topics/ESRS.

- SASB materiality benchmarks : high level materiality benchmark defined for 77 sectors

- Greenly own DMA database : with dozens of double materiality analysis carried out through our system, some of them having been approved by Auditors, we also use that information to advise clients that have similar sector and size than other clients of our portfolio.

Though, we insist on the fact that we only provide advise about our own opinion of what should be material or not for our clients, in order to help them properly size their reporting perimeter, with the highest Content Relevance VS Deployed Resources for their sustainability report. In the end, we clearly communicate that it is the client’s responsibility to use our advise or not.

The Greenly DMA questionnaires provide detailed insights, organized by ESRS and sub-topics, helping the company identify relevant ESG issues for its IRO list. Using our materiality scoring (impact and financial), the company can prioritize these issues and refine the language to frame them as specific impacts, risks, or opportunities.

So basically the company can deduce its IROs from the detailed questions of each DMA form of the Materiality Assessment module, which are already categorized as "Positive impact", "Negative impacts" (+ additional "Stakeholders reactions beneath) and "Dependencies".

To further support this process, Greenly plans to develop an additional module for IRO management that will use the results of the Double Materiality analysis to generate an automatic list of potential IROs. The company can then customize or adjust this list as needed. Currently, however, this process must be done manually.

The final IRO is intended to be disclosed by the company in the appropriate questions of the Data Collection module ("Description of Impacts", "Description of risks", "Description of Opportunities").

Currently, our DMA system does not allow for the direct management of IROs. However, we are developing an IRO Management module that will categorize each IRO in our database according to a specific ESRS, DR, sub-topic, and sub-sub-topic. This will allow the company to explore these categories and choose the ones that best describe its ESG issues. The company will also be able to add new items to the database, with mandatory categorization under these dimensions.

When a company conducts a double materiality analysis at the group level, it can still break down relevant IROs (Impacts, Risks, and Opportunities) in the following ways:

- Our questionnaires account for scope, helping to differentiate results for different activities and entities.

- A comment box is provided in the questionnaires, allowing the company to add contextual details about where specific impacts, risks, and opportunities occur within the organization.

- During the data collection process, the company is encouraged to define its custom list of IROs in detail and to break them down appropriately, reflecting the diverse behaviors across its value chain.

Greenly’s double materiality assessment uses four time horizons to evaluate impacts, risks, and opportunities. These are: immediate (less than a month), short-term (one month to one year), medium-term (one to five years), and long-term (five years or more). Unlike the ESRS definitions, Greenly includes an additional "immediate" category to capture impacts, risks, and opportunities that may materialize in the very short term, providing a more granular view of potential developments.

You can provide a structured justification explaining how your Double Materiality Assessment was conducted and the basis for your materiality choices. This should include:

Sources Used for Decision-Making

- Regulatory Requirements: Alignment with CSRD requirements (Greenly system has been used and already audited by several auditors in the context of past CSRD porojects → Deloitte, Mazars, EY, etc).

- Stakeholder Input: Consideration of feedback from investors, clients, employees, suppliers, NGOs, and regulators (it is not mandatory to reach out external stakeholders, yet it may be a powerful tool to comfort your choices).

- Industry Benchmarks: Review of peer reports, sector-specific standards (e.g., SASB/ISSB), and best practices.

- Internal Business Priorities: Analysis of corporate policies, strategic objectives, risk assessments, and available data.

Justification of Choices

- The selected material topics reflect the most relevant ESG issues for your company’s operations and stakeholders.

- If some topics were deprioritized, explain that this was based on lower impact or lower financial exposure.

- The chosen focus ensures quality over breadth in reporting, with plans to refine and expand the scope in future assessments.

Future Adjustments

The materiality assessment can be reviewed in the future, periodically, integrating new regulations, stakeholder expectations, and audit feedback.

Understanding how the questions in each ESRS form relate to the final materiality scores is crucial for accurate reporting of your double materiality results. Let's break this down in detail.

In the end, the materiality scores (impact or financial) are computed at sub-topic level (e.g. "energy consumption" is a sub-topic of the "Climate Change" ESRS/topic). With that approach, we would have several scores for each topic/ESGS. To deduce the materiality score at ESRS/topic level, we choose the sub-topic with the highest score.

This means the materiality score is determined by the answer to ONE question, related to ONE sub-topic of the ESRS.

Also, keep in mind that each question addresses the main levels of your value chain, meaning the company's own operations, suppliers and final clients. So the materiality scores will be influenced by both your answer type and the impact / risk / opportunity location in the value chain.

These questions are designed to quickly identify if an ESRS is potentially material to your company. They typically ask about your company's involvement in activities related to the ESRS topic.

These questions delve into specific activities and their potential impacts, contributing to the impact materiality score.

For impacts identified as potentially material (exceed a 50% impact materiality score), you'll be asked about possible stakeholder reactions.

These questions assess your company's reliance on various resources related to each ESRS.

To trace back the origin of the scores, please follow this process:

Following the Double materiality Assessment, either the company did it with Greenly DMA system or on its own, specific forms in the data collection module (in particular in ESRS 2) ask for detailed information about IROs ("Description of Impacts", "Description of risks", "Description of Opportunities").

The results are smoothly integrated into the Data Collection Module, thanks to Greenly's detailed mapping of EFRAG datapoints to specific sub-topics. Each datapoint is assigned to a relevant sub-topic (e.g., "energy") and categorized by materiality type (impact or financial). Based on the impact and materiality score of each sub-topic, the system automatically identifies which datapoints are material.

In addition to this automated process, the company can further refine the materiality of its datapoints directly within the data collection module at the data point level, ensuring they align precisely with the information it intends to disclose in its sustainability statement.

In the Data Collection module, Greenly offers a "Materiality" property for each questionnaire and question, which the company can adjust as needed. This "Materiality" property is set at the start of the data collection process, after the double materiality results are finalized (triggering an update to the materiality of the data points based on the mapping of sub-topics to data points). If the company chooses to change the materiality of a form or question, it can provide a justification in the dedicated comment box.

The results are seamlessly integrated into the Data Collection Module through a detailed mapping Greenly created between EFRAG datapoints and sub-topics. Each datapoint is linked to a specific sub-topic (e.g., "energy") and a type of materiality (impact, financial or both). Based on the impact and financial materiality score of each sub-topic, the system automatically determines which datapoints are material.

In addition to this automatic process, companies can fine-tune the materiality of their datapoints directly within the module, ensuring they align with the scope of information they aim to disclose.

To make data collection more efficient, Greenly designed questionnaires and questions with appropriate guidelines that help clients understand the data needed for each material datapoint. In some cases, Greenly has gone beyond EFRAG's basic definitions or formats to ensure clarity, accuracy, and auditability of the reported information. As a result, Greenly's questions might not strictly reflect the same raw format as EFRAG's data point descriptions, but this isn't an issue. Greenly has set up detailed rules in its system to map and transpose the answers to each of Greenly's questions to the appropriate EFRAG datapoints.