The concept of ‘double-materiality’ was officially addressed by the European Commission in its ‘Guidelines on Non-financial Reporting: Supplement on Reporting Climate-related Information’ in June 2019. According to these guidelines, companies are encouraged to evaluate materiality from two perspectives, namely:

• the extent necessary for an understanding of the company’s development, performance and position, ‘in the broad sense of affecting the value of the company’, which should be typically of most interest to investors;
• environmental and social impact of the company’s activities on a broad range of stakeholders.

By addressing the need for interconnectivity to exist between aspects 1) and 2)