This week’s reading time: 5 minutes & we have a new spotlight, see below

Welcome to another edition of The Green Executive Briefing. In under 10 minutes, you’ll be fully updated on the latest happenings in Sustainability and ESG every Tuesday at 8am EST. 🌎

We sift through a vast array of articles and data from trusted sources, distill the information, and present it to you in simple, bite-sized pieces every week. 🌍

Subscribe Today 🌍

Here are some key takeaways:

• Europe's Corporate Sustainability Reporting Directive (CSRD) explicitly mandates a double materiality approach

• The IFRS International Sustainability Standards Board (ISSB) is establishing a global baseline focused on financial materiality

• Approximately half (48%) of large companies worldwide now embrace both impact and financial considerations in their materiality assessments

More Readings

1. 5 Fields to Launch Your Sustainability Career 

2. Navigating the Sustainability Revolution 

3. Policy Shifts Legal Battles Market Impacts

🌟 Spotlight: Shaping Sustainability & Elyssa Pergola

Shaping Sustainability continues to make waves in the sustainability sector with their mission to build a connected community of professionals driving collective action. Through shared knowledge, resources, and relationships, they empower changemakers across industries to turn climate ambition into real-world impact.

Here is the website: https://shapingsustainability.com

Their Slack group has become a vital hub for sustainability professionals looking to collaborate, share insights, and create meaningful change. With a growing member amount, this New York-based non-profit is quickly becoming an essential network for anyone working in the sustainability space. Contact Elyssa below if you would like to join.

This month, we're excited to spotlight Elyssa Pergola, a rising star in sustainable development. Elyssa brings valuable expertise as a Sustainability Manager at Everest, where she contributes to the company's ambitious sustainability initiatives.

Elyssa exemplifies the kind of cross-industry collaboration that Shaping Sustainability promotes—connecting corporate sustainability practices with academic research to develop innovative approaches to our most pressing environmental challenges.

Connect with Elyssa on LinkedIn to learn more about her work and perspectives on building a more sustainable future.

Follow & contact Elyssa on LinkedIn here.

Want to get featured in the spotlight? Reply to this email: [email protected]

LIMITED TIME OFFER!

Streamline Your Carbon Accounting with the Ultimate GHG Conversion Factors Spreadsheet Bundle

Accurately Calculate and Report Your Greenhouse Gas Emissions with Ease - In today's business landscape, understanding and managing your organization's carbon footprint is not just a regulatory requirement but also a commitment to sustainability. Our GHG Conversion Factors Spreadsheet Bundle is meticulously designed to assist professionals like you in simplifying the complexities of greenhouse gas (GHG) emissions calculations.

• Comprehensive Coverage: Encompasses all major GHG emissions scopes, including Scope 1 (direct emissions), Scope 2 (indirect emissions from electricity), and Scope 3 (other indirect emissions such as business travel and waste disposal).​

• User-Friendly Interface: Designed in Excel for intuitive navigation, allowing both novices and experts to utilize the tool effectively without extensive training.​

• Up-to-Date Data: Incorporates the latest GHG conversion factors for 2025, ensuring your calculations are aligned with current standards and regulations.​

• Versatile Applications: Suitable for various sectors, including manufacturing, services, and transportation, providing tailored calculations for specific industry needs.​

• Detailed Documentation: Comes with a comprehensive user guide and step-by-step instructions to facilitate accurate data input and interpretation.

Get it now for $49.

Intro

🌍 The Materiality Landscape Is Shifting

The concept of what constitutes "material" ESG information is undergoing a fundamental transformation globally. This shift carries significant implications for U.S. companies with international operations or stakeholders.

For U.S. organizations accustomed to a strictly investor-focused lens on ESG issues, understanding these evolving definitions has become essential for effective compliance and stakeholder engagement.

Main

📌Understanding the Three Materiality Approaches

Different sustainability frameworks define "material" issues through distinct lenses:

1. Financial Materiality: How sustainability issues affect the company

Key frameworks:

• Task Force on Climate-related Financial Disclosures (TCFD)

• Sustainability Accounting Standards Board (SASB, now under ISSB)

• ISSB standards

These frameworks assess how environmental and social issues might impact a company's financial performance and enterprise value. Financial materiality reflects the traditional U.S. approach to corporate disclosure—centered on what reasonable investors would consider important in making investment decisions.

The SEC's pending climate disclosure rule aligns with this perspective, focusing on ESG factors that pose financial risks to the reporting company. Financial materiality is often described as an "outside-in" perspective: how external sustainability factors affect the organization's performance, risk profile, and valuation.

Real-world application: A technology company might disclose climate-related physical risks to its data centers (potentially impacting business continuity and capital expenditures) but might not report on biodiversity impacts from its operations if those impacts don't currently affect financial outcomes.

Main

📌Impact Materiality: How the company affects society and the environment

Key frameworks:

• Global Reporting Initiative (GRI)

• Climate Bonds Initiative (CBI)

These focus on an organization's external impacts, regardless of whether they currently affect the financial bottom line. Impact materiality represents an "inside-out" perspective: how the company's activities, products, and services affect people and the planet.

This approach often captures issues that may not yet have clear financial implications but are nonetheless important to a company's overall sustainability footprint and social license to operate. Impact materiality typically encompasses a wider range of issues and stakeholder concerns than financial materiality alone.

Real-world application: An apparel manufacturer might report on labor practices throughout its entire supply chain—including in regions where labor standards don't currently pose regulatory or reputational risks—because these impacts are significant to workers and communities, even if not yet financially material.

Main

📌 Double Materiality: Both financial risks AND societal/environmental impacts

Key frameworks:

• EU's Corporate Sustainability Reporting Directive (CSRD)

• European Sustainability Reporting Standards

• Sustainable Finance Disclosure Regulation (SFDR)

• CDP (formerly Carbon Disclosure Project)

Double materiality requires companies to assess both "outside-in" financial risks and "inside-out" impacts on the world. This approach recognizes that a complete picture of corporate sustainability performance must include both dimensions.

The EU has formally codified this perspective in its reporting requirements, demanding that companies disclose not only ESG issues that affect enterprise value but also how their activities impact people and the environment. This reflects a view that companies have responsibilities to a range of stakeholders beyond shareholders.

Real-world application: An energy company using double materiality would report both on transition risks to its fossil fuel assets (financial materiality) and on the climate impacts of its greenhouse gas emissions (impact materiality), regardless of whether those emissions currently pose financial risks.

Main

📌 Strategic Implications for U.S. Companies

The materiality divide isn't just a compliance issue—it's a strategic opportunity:

Compliance challenges:

• U.S.-based multinationals with EU operations must apply double materiality under CSRD

• Companies reporting only financially material issues risk compliance gaps in jurisdictions requiring broader disclosure

• Inconsistent approaches across regions can create mixed messages to investors and stakeholders

Strategic opportunities:

• Adopting a broader materiality lens can uncover risks and opportunities that a narrow financial focus might miss

• "Immaterial" sustainability issues often become financially material over time (e.g., carbon emissions, labor practices)

• Companies that anticipate these shifts can respond proactively, building resilience and competitive advantage

• Enhanced credibility with investors increasingly attentive to comprehensive ESG performance

As the Business Roundtable affirmed in 2019, companies should deliver long-term value to all stakeholders, not just shareholders. A double materiality mindset operationalizes this principle.

Main

📌 Action Plan: Navigating the Materiality Divide

1. Map Your Requirements and Audiences

• Identify which disclosure frameworks apply to your business and investor base

• Determine if your operations trigger EU reporting laws like CSRD

• Understand what your investors expect in ESG disclosure

• Identify gaps between current reporting and stakeholder expectations

2. Conduct a Double Materiality Assessment

• Even if not explicitly required in the U.S., assess both financial and impact materiality

• Identify where sustainability issues affect your financial position and where your activities significantly impact society/environment

• Use this broader lens to future-proof against emerging risks

• Remember that today's "immaterial" issues can quickly become tomorrow's material risks

3. Leverage Complementary Frameworks

• Rather than choosing one approach, use the best of both worlds

• Consider using GRI Standards for impact disclosures alongside SASB/ISSB for financially material metrics

• Take advantage of guidance on using these frameworks in tandem

• Create a comprehensive picture that satisfies both capital markets and broader stakeholders

4. Break Down Internal Silos

• Integrate finance, compliance, sustainability, and communications teams

• Educate leadership and boards on the dual materiality concept

• Embed this thinking in risk management and strategy discussions

• Communicate your approach clearly to investors and regulators

WRAPPING UP

🔮 CLOSING THOUGHT: LOOKING AHEAD

The convergence of standards is underway. The ISSB and GRI have announced a collaboration to help companies meet the needs of both financial audiences and broader stakeholders more efficiently. For forward-thinking U.S. companies, mastering the dual nature of materiality is becoming a hallmark of ESG leadership.

In a world where financial performance and sustainability impact are increasingly intertwined, organizations that understand and embrace these nuances will be better positioned to meet global expectations and drive long-term value—for both shareholders and society.

P.S. When you’re ready, here’s how I can help you:

1. Download our Dashboard GHG Accounting Scope 1, 2 & 3. Customize it with your organization's numbers to build a compelling business case.

2. Refer 2 other sustainability leader (see “Click to Share” button below)

3. Book a Consultation: Click HERE

   1. GHG Accounting Strategies (Scope 1, 2 & 3) 

   2. ISO 14001 Compliance (Environmental Management)