This summer, within a few weeks of each other, two of the most significant frameworks in sustainability changed. While the changes could be seen as pulling in different directions in fact, they reflect very different purposes. Read together, they tell us something useful about how requirements around materiality are shifting.
Summer of reform
Two things happened in the summer of 2026 which, on the face of it, present a contradiction for sustainability practitioners.
On 3 July, the European Commission adopted the delegated act revising the European Sustainability Reporting Standards, now in a scrutiny period before it formally comes into force (financial years from 1 January 2027, with early adoption for FY2026 permitted once in force). It is one of the final steps of the Omnibus simplification package, and its headline is a cut of roughly 61% in the mandatory datapoints required for CSRD disclosure.
For materiality specifically, the revised ESRS 1 does something more interesting than a simple trim, it reframes the assessment. Companies may now take a top-down approach, starting from strategy, business model, sector and geography rather than testing every impact, risk and opportunity from the ground up. The previous, softer instruction not to report immaterial information has hardened. Undertakings (ESRS-speak for companies) shall not report information that is not material. Double materiality survives intact, but the direction of travel is clear: assess less, report less, and concentrate on what is genuinely material.
Three weeks earlier, on 16 June, the first cohort of companies were certified under B Lab’s new standards, which represent the largest overhaul of B Corp certification in its twenty-year history. B-Lab’s changes to the standards appear to point in an opposite direction to the changes made to the ESRS. The previous standards allowed a company to accrue 80 points across five areas and play to its strengths within those areas. For instance, a weak score on the environment could be offset by a strong one on governance. Now that à la carte model has gone.
Every B Corp must now clear a minimum threshold across all seven Impact Topics: Purpose & Stakeholder Governance, Fair Work, Justice/Equity/Diversity/Inclusion, Human Rights, Climate Action, Environmental Stewardship & Circularity, and Government Affairs & Collective Action.
There is no longer any offsetting of weakness in one area against strength in another. Independent third-party verification replaces self-assessment, and continuous improvement is checked at years three and five. Together, these set out a rigorous framework. The direction of travel for B Corps is equally clear, nothing important is optional, high standards across the board are required.
Does everything matter, or only what’s material?
It is tempting to read the two reforms as different answers to the same question. They are not. They are built for different purposes, and the more useful question is what they tell us, together, about how the requirements around materiality are changing.
B Corp asks a fundamental question: are you a good company, and if so, how good? Its revised standards set minimum standards on the core issues any responsible business should be getting right. ESRS asks something quite different. It requires you to take a strategic approach to disclosing what is important to your business and how you manage it.
So where does materiality sit?
Once you consider the two purposes, the apparent contradiction dissolves, and something more interesting is evident. The two frameworks place an emphasis on materiality in different places.
Under ESRS, materiality retains a central, pivotal role. The entity runs its own double materiality assessment, and that assessment governs what gets disclosed. The Omnibus reform makes the technical requirement lighter, now requiring fewer datapoints and making a top-down approach explicitly permissible, leaving the company responsible for making judgements on materiality.
B Corp V2 does something quite different. It does not remove materiality, rather it relocates it. The decision about which topics matter for a responsible business has been taken away from the individual company and made once, centrally, by B Lab (based upon multi-year consultation with thousands of stakeholders), and then fixed as the seven mandatory Impact Topics, meaning that the company no longer gets to make topic-level judgements. Under the old points model, choosing where to score well was itself a materiality judgement, and perhaps a self-serving one. This is precisely what B Lab set out to end.
What remains at company level is narrower and more disciplined. The requirements within each topic are tailored to your size, sector, industry and geography with B Lab pre-deciding what is material for a business of your type. A risk profile in the Foundation Requirements scales your due-diligence obligations to your actual exposure. Under Purpose & Stakeholder Governance, larger companies are explicitly required to run stakeholder engagement and an impact materiality assessment, one that feeds strategy and governance and shapes the requirements across several other topics. Materiality has not been removed. It has been relocated and repurposed.
Worth doing even when you don’t have to?
So, what matters for sustainability practitioners?
Materiality assessment remains most useful as a strategic management tool, something worth doing even if you had no obligation to report at all. If you are obliged to do it, we’d typically suggest that you do it well and get real value from it, and to do so, it shouldn’t just be treated as a compliance exercise.
Value from effective and rigorous materiality arises from identifying, and then actively managing, the handful of things that genuinely drive risk, impact, opportunity and value. In many cases the process of doing this provides wider benefits for engagement and buy-in across the organisation.
Different purposes, different places for the judgement
The two reforms are not opposite answers to the same question. They are different frameworks, built for different purposes, that place materiality at different points in the chain of judgement and management.
ESRS trusts the reporting organisation to make the materiality call itself, entity by entity, and those judgements govern disclosure. By putting materiality at the heart of disclosure, this approach arguably demands greater rigour than the pre-Omnibus framework. With fewer datapoints available to mask weak prioritisation, organisations must demonstrate a clear connection between their strategy and the issues they choose to prioritise.
In contrast, B Corp V2 has arguably removed the company’s topic-level materiality call, because that to some extent allowed inconsistent performance across categories to still achieve certification. Now it confines the company’s own materiality work to two bounded areas: a risk profile that scales its obligations, and an impact materiality assessment that feeds conduct and governance.
In B Corp, materiality no longer decides whether you must act on a topic. It decides how much, and on what, with a minimum requirement that is non-negotiable.
For the fuller case on why we treat materiality as continuous management rather than a one-and-done compliance exercise, see Materiality Matters. If you are running a double materiality assessment under the revised ESRS, or developing one for B Corp (re)certification, that reconciliation is exactly the work our double materiality assessment service has been developed to help you with.
Materiality: the most misunderstood word in sustainability?
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