Sustainalytics Insight: ESG in Conversation - Morningstar Experts Weigh in on Double Materiality
As we enter 2025, new double-materiality reporting rules as part of the EU’s Corporate Sustainability Reporting Directive (CSRD) are affecting thousands of companies domiciled in Europe and beyond. And, while investors may benefit from information on how companies impact the world around them in addition to the specific environmental, social and governance risks to their businesses, referred to as "double-materiality," the jury is still out on the utility of impact measures.
Morningstar Indexes & Morningstar Sustainalytics President Ron Bundy recently convened a diverse panel of experts to review the double materiality issue from a wide range of perspectives.
Matthew Gray – Associate Director, Stewardship, Morningstar Sustainalytics: “The sustainable development goals, or SDGs, introduced by the UN were viewed as a promising framework for measuring impact. Yet when the SDGs were originally set up, companies were marginally included and absolutely no investors were consulted.”
Gabriel Presler – Head of Enterprise Sustainability, Morningstar: “As investors, we love measures. But the blast effects, or impact, are still legendarily hard to measure, so impact materiality is a very new frontier. Fortunately, a lot in the ESG financial materiality data is extremely meaningful and comparable when it comes to addressing this investor desire to measure impactful performance.”
Hilary Wiek – Senior Strategist, Sustainable Investing, PitchBook: “There are real opportunities to make an impact in private markets, especially in private equity, where you can buy the whole company and control its path for years. In the public markets, you buy the company and hope for the best.”
You can find the full transcript of the conversation here. To speak in more detail with Ron or any of our experts, reach out to Tim Benedict at [email protected] or (203) 339-1912.
Media Contacts
