Your double materiality assessment is done. Now what?

Across Europe, the first companies reporting under the CSRD have now completed two full cycles. They have run their double materiality assessments, built their matrices and published their sustainability statements. On paper, it is a success.

But look closer. EFRAG’s July 2026 review of 905 assured sustainability statements found that companies identify an average of 6.4 material topics but set measurable targets for only 3.3 of them. More than a third (37%) do not link sustainability to executive pay at all.

In other words, companies have learned what matters. They have not decided what to do about it.

The matrix is where most assessments stop

For most companies, the double materiality assessment ends with a list of topics and a chart in the annual report. It decides what gets disclosed, and then everyone moves on to next year’s data collection.

That was never the point. Double materiality exists so that companies see both directions of their relationship with sustainability: how sustainability affects the business, and how the business affects people and the planet. The assessment is meant to help them manage both. A chart does not do that. Decisions do.

That gap is why I developed the Double Materiality Navigation Framework.

Two axes, two owners

The framework starts with the two axes every CSRD company already scores, but gives each axis an owner. Financial materiality, meaning how a topic affects the company, is owned by the CFO, because judging effects on cash flows, financing and cost of capital is finance expertise. Impact materiality, meaning how the company affects people and the environment, is owned by the CSO, because judging human rights and environmental impacts is sustainability expertise.

The two sign off together on where each topic lands. That simple rule stops either perspective from dominating, so the assessment cannot shrink into a risk register or drift into a stakeholder survey disconnected from the business.

Four zones, four strategies

Every material topic lands in one of four zones, and each zone tells the company which strategy to adopt.

Helm: Transform. Topics that are material in both directions: they drive the company’s value and its impact. The helm is where a ship is steered, so these topics are steered from the top: the CFO and CSO jointly, overseen by the full board, and built into strategy, budgets, investment cases and executive pay. Example: climate change for a food manufacturer with heavy supply chain emissions and rising carbon costs.

Compass: Pre-empt. Topics with high impact on people or the planet but little financial effect, for now. A compass points true whatever the wind. You act here because you are responsible, not because money forces you, and ideally before law, markets or litigation make the issue financial. The CSO leads, and the sustainability committee oversees. Example: forced labour risk among a few suppliers’ seasonal workers.

Hull: Protect. Topics that can damage the company’s value even though its own impact is small, often because it depends on nature or people. The hull protects the ship from the sea. The CFO leads, the audit or risk committee oversees, and the tools are risk management, scenario planning and impairment testing. Example: two plants relying on groundwater in a drought prone region.

Lookout: Sense. Topics below both thresholds. They are not material and not reported, but they are not forgotten: each carries named triggers that would prompt a fresh look. Example: noise and traffic around plants in established industrial zones.

One point matters here: Helm, Compass and Hull topics are all reported under the ESRS. The zone decides how intensely a topic is governed, not whether it is disclosed.

The Compass zone: where risk hides

The Compass is where the framework earns its keep. Take the forced labour example. It is a potential human rights impact: severe, but judged unlikely. If you let that low likelihood pull the score down, as many assessments do, the topic drops below the threshold and quietly disappears from the report and from management attention. The framework applies the ESRS rule that, for human rights, severity comes first, so the topic stays visible.

Now add one fact: from 14 December 2027, the EU Forced Labour Regulation bans products made with forced labour from the EU market. A “low financial” topic can become a market access crisis almost overnight. A company using the framework has that regulation logged as a named trigger. It sees the shift coming more than a year ahead and acts while acting is still cheap.

Materiality moves, so track it

Materiality is not a snapshot. Issues become financial through a sequence of events: new laws, customer demands, litigation, campaigns, physical events and even the company’s own decisions. The framework gives each topic named triggers from those categories. When a trigger fires, the topic is scored again and, if it changes zone, ownership is formally handed over. The most important path is from Compass to Helm, as an impact on people or the planet becomes a financial risk.

This matters even more now. Under the revised ESRS, adopted by the European Commission in July 2026, companies still review their assessment every year but only need to redo it when something significant changes. Triggers tell you when a topic deserves a fresh look.

One assessment, two uses

This is not another compliance layer. The framework is built on the ESRS rules, so the assessment you already do for reporting becomes the input to your strategy. It also produces the disclosures ESRS 2 asks for, on your assessment process, its results and your governance, from one consistent system, which makes them easier to assure.

It works beyond the CSRD too. Companies reporting under ISSB based standards, or those taken out of scope by the Omnibus reforms, can use the same zones as a strategy tool.

Five questions for your next board meeting

1. For each material topic, who owns it, by name?
2. Which material topics have no target, and why?
3. Which topics matter for their impact but not yet financially, and what are we doing about them now?
4. What would move each topic into a different zone, and who is watching for it?
5. Does our capital allocation actually reflect our materiality assessment?

If those questions are hard to answer, your assessment is working as a reporting filter, not a management tool.

From gateway to starting point

Double materiality can be the gateway to a report, or the starting point of a strategy. The companies that treat it as the second will see their risks earlier, protect their value better and earn the trust that disclosure alone cannot buy.

I first introduced this idea in my book, Sustainability Leadership: The Global Outlook, and I am now developing it further through academic research. I would like to hear how your organisation decides what happens after the assessment. What is working, and what is not?