Double Materiality Assessment and Stakeholder Engagement in Finnish Companies : analysing Finnish companies’ double materiality assessment processes

Abstract

The purpose of the thesis was to analyse Finnish companies’ double materiality assessment processes and the stakeholder engagement that supports those assessments. As companies prepare to report on their sustainability activities under the mandatory reporting framework CSRD, it is important to understand if their double materiality assessments have similar methodologies. Furthermore, it is important to understand if these assessment processes align with the recent EU guidelines, and how the stakeholders are engaged in the process.

The thesis discusses the history of ESG, the evolution and policymaking of ESG reporting in the EU, and the different voluntary reporting frameworks used until now. The European Sustainability Reporting Standards (ESRS) and the implementation guidelines for materiality assessment (EFRAG IG 1) are presented and discussed. Three methodologies were implemented in this study. To start, a literature review was made to contextualize the study with research in the field, understand its historical background and discuss relevant theories and concepts used throughout the thesis. The second methodology used was a qualitative analysis of 13 sustainability reports of publicly traded Finnish companies from several industries. It aimed at understanding current practices in materiality assessment and stakeholder engagement. In addition, a semi-structured interview was conducted with an ESG manager from a publicly traded Finnish company and analysed using thematic analysis.

The study’s findings show similarities in materiality assessment processes for the sample companies. However, many still fail to disclose their methodologies with enough detail and clarity. The materiality assessment processes discussed show alignment with CSRD guidelines, indicating possible good preparation for CSRD. Companies show commitment to stakeholder engagement, and disclose using similar methods for implementing it, although at different stages of the materiality assessment process.