The Strategy Hiding in Your Materiality Assessment
In the past month, not one but two sophisticated regional businesses have told us that their double materiality assessments (DMA) had done everything they thought they were supposed to. They had identified material topics and the processes were well structured. And yet, by their own admission, the assessments had not changed a single decision. They had not influenced investment priorities, clarified an operational trade-off or moved accountability between leadership teams. The DMA process had become highly effective at supporting disclosure and far less effective at shaping business strategy.
This is not uncommon, and this gap is both a key disconnect and lost opportunity for aligning sustainability with business strategy and resilience.
Global standards have done something genuinely valuable: they have made sustainability harder to ignore. The ISSB’s IFRS S1 and S2, the GRI Standards and CSRD’s ESRS have brought structure and discipline to a field long criticised for being too vague and too voluntary. They now give boards, finance teams and risk leaders a common language for accountability and performance. That is real progress, and the floor they have raised is welcome.
But a misconception has settled in alongside it: the belief that the process towards better reporting automatically produces better action. If the materiality matrix is complete, the strategy must be sound. If the disclosures are robust, the direction must be right.
The reality is more complicated. Many organisations now have stronger disclosures, better data and more sophisticated assessments, while the work has not yet crossed from reporting intelligence into business and brand decisions, and ultimately corporate resilience.
It is worth being precise about what a materiality assessment is for. Double materiality combines two lenses: financial materiality, the basis of the ISSB standards, which asks what affects enterprise value; and impact materiality, the basis of GRI, which asks how the business affects economies, the environment and people, including human rights, across its own operations and value chain. ESRS requires both. Whichever standard an organisation works from, the assessment is meant to be a strategic intelligence tool: it should show where impacts (both positive and negative), risks and opportunities are emerging and where leadership attention is most needed. Above all, it should help an organisation decide what to stop, start and evolve.
A material topic should not simply appear in a report. It should show up in capital allocation, procurement, incentives, board conversations and risk management. If it does not, the organisation is reporting on sustainability in a silo without fully managing it. This is where many companies are now stuck: they have completed the process but not unlocked the strategy hiding inside it.
From Assessment to Action
The next stage of maturity is not another framework. It is translation: turning material topics into decisions, ownership and investment priorities. Boards and the C-suite need to see how sustainability connects to enterprise value and resilience, finance to fold it into capital allocation, supply chain to understand where there is exposure and/or resilience and operations to know what a target means day to day.
Communications face a sharper test too, because the market has less patience for aspiration unsupported by evidence.
The difficulty is that most materiality processes are still designed as linear exercises: gather the inputs, prioritise the impacts, risks and opportunities (IROs), determine the material topics, produce the matrix, publish, repeat. That may satisfy a reporting timetable, but in its common form, it rarely helps leadership make better decisions.
Seeing the Whole Picture: Why Value Chain Mapping and Scenario Thinking Matter
This is why detailed value chain mapping and scenario thinking belong at the centre of a serious assessment, not at its edge. The question is no longer only “what matters today?” but “where across our value chain, and under what future conditions, could resilience and competitiveness be affected?”
Mapping answers the first half. A material issue rarely sits where you expect. It may be concentrated upstream in the supply chain, downstream in how a product is used and disposed of, or in your own operations. Knowing where the exposure actually lives is what makes the rest of the analysis real. Scenario thinking answers the second half, pressure-testing those exposures against plausible futures rather than freezing them in this year’s conditions.
Take three examples.
Water stewardship is not only an environmental topic; under different scenarios it may surface as a production risk, a community concern or a capital allocation question, but also as a source of advantage in water-stressed markets where others are exposed.
Packaging waste is not only a disclosure category; it may reach into procurement and market access, and open opportunities in redesign, cost reduction and customer loyalty. Climate change is not only relevant for emission reduction targets and adaptation; it may reshape asset resilience, logistics and financing costs, while opening access to green capital for those positioned early.
Double materiality is built to capture impacts, risks and opportunities. Only focusing on risk misses the upside. Mapped across the value chain and tested against the future, materiality helps leadership see these connections before risks become crises and before opportunities are missed, and it prompts sharper questions. Where are we exposed, and where could we have an advantage? Who owns the response?
The Work Only People Can Do
At Sedgwick Richardson, we call this approach DMA+. It combines the technical assessment with scenario-based leadership workshops, cross-functional dialogue and practical action planning aligned with corporate priorities and strategy.
The workshop is the point, and increasingly it is the part that matters most. The value concentrates in the part no model can do for you: getting the right people in one room and breaking down the silos between them. Finance, operations, risk, procurement, HR and brand rarely see a material issue the same way, and individually they almost never see it whole. The work is putting them together to reach a shared understanding of what an issue means for the business, and what it means for each of their functions, budgets and responsibilities.
That conversation is where ownership is actually created. Each IRO leaves the process with a name/s attached, a decision made and a place in the operating rhythm of the business: which issues enter the next capital plan, which trade-offs the board must confront, what changes in procurement or operations and how progress will be tracked. The assessment is the input. The action plan is the output. The conversation in between is the work, and it is irreducibly human.
Standards can define what must be disclosed and they have made sustainability reporting more rigorous. But rigour in a report cannot create ownership, resolve a trade-off or decide where investment flows. Those things depend on judgement, and judgement happens between people in meetings, workshops and board meetings.
The real value of materiality is not the matrix. It is the movement from matrix to meaning: it is what people do with it. The strategy is often already there, hiding inside the assessment. The work, the human work, is reading it together, testing it and turning it into action.
Whether you are revisiting an assessment that never moved the business, or about to start your first, the goal is the same: not a better matrix, but better decisions. Let’s talk.
