The CSRD (Corporate Sustainability Reporting Directive) came into effect on January 1, 2024, for companies already subject to the NFRD. Starting with fiscal year 2025, more than 50,000 European organizations will publish a sustainability report in compliance with the ESRS, the new continental reporting standard.
At the heart of this framework lies the concept of CSRD double materiality, which combines impact materiality and financial materiality to deliver comprehensive sustainability information.
For finance departments, this is not a regulatory burden but a strategic turning point that redefines performance management and long-term value creation by fully integrating the environmental, social, and governance dimensions.
Understanding double materiality: beyond compliance
Definition and regulatory origin
Introduced in 2019 by the NFRD and reinforced by the CSRD, double materiality requires companies to assess each issue from two perspectives:
- Its environmental, social, and societal impact — impact materiality;
- The risks and opportunities that this issue presents for financial performance — financial materiality. (Goodwill-management)
In May 2024, EFRAG published the IG 1 Materiality Assessment guide to help CFOs structure the process in line with ESRS standards. (EFRAG)
The two dimensions, one decision-making lens
- Impact materiality: measures the positive or negative effects of the company on climate, biodiversity, pollution, employees, customers, and communities.
- Financial materiality: assesses how these same ESG factors influence cash flows, cost of capital, or asset valuation.
The intersection of these perspectives within a double materiality matrix highlights priority issues and helps allocate resources effectively.
Such an analysis is only meaningful if it addresses both the environment and society simultaneously, revealing systemic issues that affect performance.
Why CFOs must take ownership
The CSRD positions the CFO as the conductor of non-financial reporting: collecting reliable data, integrating it into the ERP/EPM system, linking it with IFRS accounts, and overseeing sustainability audits. Finance departments thus have a unified dashboard combining P&L, cash flow, and ESG indicators.
A new management tool for finance departments
The double materiality matrix as a decision-making tool
Beyond regulatory compliance, the matrix enables companies to:
- Test scenarios (carbon price increase, regulatory changes, resource scarcity);
- Align CAPEX and OPEX with high-impact priorities;
- Define integrated KPIs (ROCE adjusted for carbon cost, margin linked to sustainable revenues, etc.).
Integration into KPIs and dashboards
Next-generation EPM solutions link materiality indicators with financial reporting: for instance, an improved DSO can be correlated with supplier ethics scores.
The result: real-time management of both economic and sustainable performance, consolidated within the annual sustainability report.
Use case: a major energy group
In 2024, a CAC 40 energy company identified electrical network security as one of its “doubly material” issues. By integrating this risk into its maintenance budget, the group reduced critical incidents by 15% and gained 30 basis points on its green debt cost.
Organizational impacts and governance
Evolving role of the CFO and collaboration with CSR
The CFO becomes a Chief Value Officer (CVO), coordinating CSR, procurement, risk, and IT to ensure data reliability, prioritize issues, and translate externalities into financial impacts. The entire value chain, from upstream operations to the end customer, is covered.
New processes and upskilling
- ESG data governance within the accounting framework.
- Audit workflows: the CSRD requires limited, then reasonable assurance by an independent auditor (OTI).
- Upskilling of finance teams: understanding ESRS, climate scenarios, and long-term value modeling.
Bpifrance emphasizes that these initiatives strengthen CSR culture and competitiveness, even for fast-growing mid-sized firms. (Bpifrance Big Media)
Governance challenges and greater accountability
Boards of directors must now approve both financial and impact materiality assessments; investors demand quantified objectives and aligned variable remuneration. A dedicated Finance–Sustainability committee is increasingly common to monitor implementation.
Long-term value creation and investor relations
Financial valuation: transparency and risk reduction
The greater the transparency, the lower the risk premium: a 2024 Deloitte study shows that companies anticipating double materiality report a weighted average cost of capital (WACC) that is 40 basis points lower. (DART)
Stakeholder dialogue and ESG credibility
SaaS tools facilitate data traceability (Scopes 1–3, human rights, taxation) and enable ad hoc reporting to rating agencies, thereby strengthening trust.
CSRD as a source of strategic differentiation
Companies capable of demonstrating a positive correlation between ESG performance and financial performance stand out in tenders and access to green bonds. They turn an obligation into a sustainable competitive advantage.
Ginesis Finance supports finance departments of CAC 40 and SBF 120 companies in implementing double materiality matrices, configuring ESRS in EPM tools, and managing the associated change process. Our approach combines regulatory expertise, financial modeling, and project management for reporting that is both reliable and truly strategic.
Conclusion and next steps
The CSRD double materiality shifts the finance function from compliance control to integrated value creation. By structuring data governance, revising KPIs, and aligning investments, CFOs can turn a regulatory requirement into a strategic lever:
- Map ESG-financial impacts, risks, and opportunities.
- Build a structured double materiality matrix.
- Integrate these issues into budgeting processes and dashboards.
- Train teams and establish a Finance–Sustainability governance committee.
- Communicate transparently with investors and stakeholders.