Few charts are as closely associated with sustainability reporting as the materiality matrix. Almost every first-wave CSRD report contained one, and many teams still assume it is a mandatory part of the double materiality assessment (DMA). It is not. This article answers the question once and for all for the revised ESRS, and then shows how to build a double materiality matrix that is actually useful, how to read it, which mistakes to avoid and what to disclose instead.
In short: Neither the 2023 ESRS nor the revised ESRS (Delegated Regulation (EU) 2026/1563) require or mention a materiality matrix. What you must disclose is a description of your materiality assessment process (ESRS 2 IRO-1) and your material impacts, risks and opportunities (ESRS 2 IRO-2). Auditors look at the process, the criteria, the thresholds and the resulting list of material IROs. A double materiality matrix (impact materiality on one axis, financial materiality on the other, threshold lines on both) remains a strong communication tool for the board, as long as it is built from IRO scores, uses the same thresholds as your methodology and follows the revised topic structure without sub-sub-topics.
New to the topic? Our step-by-step guide to the CSRD double materiality assessment explains the basics, and our worked double materiality assessment example shows a complete DMA, including the matrix used below.
Is a materiality matrix required under the ESRS?
No. The word "matrix" does not appear in the requirements of either the 2023 or the revised ESRS. The revised standards, adopted by the European Commission on 3 July 2026 and mandatory for financial years starting on or after 1 January 2027, describe what the double materiality assessment has to achieve and what you have to disclose about it. They do not prescribe a format for presenting the result. (All DMA changes in the revised standards are covered in our article on the double materiality assessment under the revised ESRS.)
What the revised ESRS do require:
| Requirement | Where | What it means for you |
|---|---|---|
| Description of the process | ESRS 2 IRO-1 | A concise, non-boilerplate description of how you identified and assessed IROs, significant changes to the process and when the assessment was last updated |
| Material IROs | ESRS 2 IRO-2 | A description of your material impacts, risks and opportunities |
| Interaction with strategy | ESRS 2 SBM-3 | How material IROs interact with your strategy and business model, including financial effects |
| Only material information | ESRS 1 §24 | You "shall not disclose" information that is not material |
What auditors check under limited assurance is therefore not a chart, but the audit trail behind it: the documented process, the criteria and scales, the thresholds and their justification, and the resulting list of material IROs.
Why so many people think it is mandatory
The matrix comes from a different reporting tradition. For more than a decade, GRI-based sustainability reports used a matrix that plotted the "importance to stakeholders" against the "importance to the business". Many first CSRD reports simply kept the format and relabelled the axes. Add the fact that most DMA templates and consultancy decks end with a matrix, and it is easy to see why it is seen as an obligation. If you are coming from GRI, our comparison of GRI and ESRS materiality assessments explains the conceptual differences.
Why a matrix is still useful
Not required does not mean useless. A well-built double materiality matrix does three things that a table does not:
- It gets board attention. Management and supervisory bodies have to approve the assessment. One chart showing which topics cross which threshold is easier to discuss than a 40-row IRO table.
- It makes "impact only" and "financial only" topics visible. These are the topics that a purely financial or purely impact-driven view would miss, and they are exactly what double materiality is about.
- It supports calibration. Topics close to a threshold line stand out immediately, which helps you decide where a closer look or a calibration workshop is needed.
How to build a double materiality matrix, step by step
1. Score IROs, not topics
The matrix is an output of the assessment, not the assessment itself. Score individual impacts, risks and opportunities first: impacts on severity (scale, scope, irremediable character) and, for potential impacts, likelihood; risks and opportunities on the magnitude and likelihood of financial effects. Only then aggregate to the level you want to plot. "Climate change: high" without IROs underneath is not defensible.
2. Choose the axes
A double materiality matrix has exactly two axes: impact materiality and financial materiality. Which one goes on which axis is a matter of convention. In our example, impact materiality is on the vertical axis and financial materiality on the horizontal axis. Use the same scale (for example 1 to 5) on both axes and label them clearly.
3. Decide the level: topic, sub-topic or IRO
For board communication, the topic or sub-topic level usually works best. Use the revised structure from ESRS 1 Appendix A: topics and sub-topics only, because sub-sub-topics no longer exist (see our ESRS topics list 2026). For internal calibration, an IRO-level plot can be more informative.
When aggregating, use the highest IRO score per dimension rather than the average. This is how our example works, and it ensures that one severe impact is not diluted by several minor ones.
4. Draw the threshold lines
Draw one line per axis at exactly the threshold defined in your methodology, for example 3.0 on a 1 to 5 scale. The thresholds must be set and approved before scoring and their rationale documented. Our help article on adjusting thresholds in a materiality assessment shows how to configure and record them.
5. Use bubble size and colour sparingly
Optional third and fourth dimensions can add insight, but only one or two at a time:
- Bubble size: number of material IROs per topic, or the highest severity score.
- Colour: value chain location (upstream, own operations, downstream), time horizon, or positive versus negative impacts.
If readers need a legend longer than the chart to understand it, simplify.
6. List top-down conclusions next to the matrix
Under the revised ESRS 1 (§27) you may conclude top-down that a topic is clearly material or clearly not material without scoring individual IROs. Those topics have no scores and therefore no position in the matrix. List them next to the chart with a one-line rationale instead of inventing scores.
7. Date, version and approve it
Add the assessment date, the version and the approving body. Since the revised ESRS only require an update when significant changes occur (§34), the matrix should also show when the assessment was last updated.
Here is the result from our worked example. The two topics concluded top-down (E4 and S3) are not plotted:
How to read a double materiality matrix: the four quadrants
| Quadrant | Meaning | Consequence under the ESRS | Example from the matrix |
|---|---|---|---|
| Top right | Material from both perspectives | Report | E1 Climate change, S1 Own workforce |
| Top left | Material from the impact perspective only | Report | S2 Workers in the value chain |
| Bottom right | Material from the financial perspective only | Report | G1 Business conduct |
| Bottom left | Not material | Do not report (ESRS 1 §24) | E2, E3, S4 |
Two points are often misunderstood:
- All three material quadrants lead to reporting. A topic in the top-left corner is just as reportable as one in the top-right corner. That is the difference from a purely financial (ISSB-style) view.
- Distance from the threshold is not a ranking of reporting obligations. A topic just above the threshold is as material as one in the far corner. The position helps you prioritise management attention, not decide how much to disclose.
Generate your materiality matrix automatically
Materiality Master creates the double materiality matrix directly from your IRO scores and thresholds, always in sync with the assessment and based on the revised ESRS topic structure. No more redrawing charts in PowerPoint.
Six common mistakes with materiality matrices
- Mixing gross and net. The revised ESRS 1 (§43) settles this: potential negative impacts may only be reduced by prevention and mitigation actions that are already implemented and effective. A matrix in which some topics are plotted before mitigation and others after planned measures is not comparable and will not survive an audit.
- Averaging away severe impacts. If one IRO is a severe human rights impact and nine others are minor, the average puts the topic below the threshold. For potential negative human rights impacts, severity takes precedence over likelihood (ESRS 1 §40). Use the highest score or plot the IRO separately.
- Plotting sub-sub-topics that no longer exist. Templates built on the 2023 list (ESRS 1 AR 16) often show 30 or more bubbles at sub-sub-topic level. The revised Appendix A only has topics and sub-topics. Update your templates.
- Thresholds that are not justified. Thresholds set after scoring, or never explained, are the first thing an auditor will question. Document why 3.0 (or any other value) is appropriate for your company.
- Using stakeholder importance as an axis. "Importance to stakeholders" is not one of the two materiality dimensions. Stakeholder input feeds into the scoring; it does not replace it.
- Treating the matrix as the documentation. The chart summarises the result. The evidence sits in the IRO list, the scoring rationale and the approvals. Our DMA audit checklist lists what auditors ask for.
Alternatives to the materiality matrix
| Format | Best for | Limitation |
|---|---|---|
| Ranked list or bar chart | Showing the order of topics by highest impact or financial score | Hides the difference between impact-only and financial-only topics |
| Heat map (topics × value chain stage or time horizon) | Showing where in the value chain and when IROs arise | Does not show the two materiality dimensions at a glance |
| IRO table | Audit file and the basis for IRO-2 and SBM-3 | Too detailed for a board slide |
| Two-column summary (material from impact / financial perspective) | Short management summaries | No information about scores or proximity to thresholds |
In practice, the strongest combination is an IRO table as the audit-ready basis and a matrix or ranked list as the visual summary.
What to disclose instead of a matrix
Under the revised ESRS, your sustainability statement should contain:
- ESRS 2 IRO-1: a concise description of the process: how you identified and assessed IROs (top-down, bottom-up or both), the criteria and thresholds, how stakeholder input was used, significant changes since the last period and when the assessment was last updated.
- ESRS 2 IRO-2: your material impacts, risks and opportunities. If you concluded that climate change is not material, IRO-2 §37(b) only requires the basis for that conclusion.
- ESRS 2 SBM-3: how the material IROs interact with your strategy and business model, including their financial effects.
If you also include a matrix, make sure it shows exactly the same topics, scores and thresholds as the text. An inconsistency between chart and narrative is an easy finding for any reviewer.
Key takeaways
- A materiality matrix is not required under the 2023 or the revised ESRS. Neither standard mentions it.
- What counts is the documented process (IRO-1), the material IROs (IRO-2) and their link to strategy (SBM-3).
- A double materiality matrix plots impact materiality against financial materiality, with threshold lines on both axes.
- Build it from IRO scores, aggregate with the highest score rather than the average, and use the revised topic structure without sub-sub-topics.
- Topics in any of the three material quadrants are reported. Topics in the bottom-left quadrant are not.
- Use an IRO table as the audit-ready basis and the matrix as the summary for the board.
Want the matrix without the manual work? Materiality Master generates it automatically from your IRO scores and thresholds, with the audit trail documenting every change. The ESRS Datapoints Mapping Tool then turns your material topics into the datapoints you need to report. See the plans and pricing.
