Conducting a robust Double Materiality Assessment (DMA) is crucial for your CSRD reporting journey. A well-executed DMA can save you considerable time and effort later on. Remember, DMAs are subject to audits, and they are more complex than you might think.
A classical DMA involves identifying potential impacts, risks, and opportunities (IROs) across a wide range of domains—from climate change to biodiversity, from social topics like diversity and inclusion of employees (including those at suppliers and distributors), to governance issues such as whistleblower policies. This requires a thorough review of internal documents, industry reports, competitor information, and analysis of suppliers and distributors to identify blind spots. Creating a shortlist of potential IROs is critical; if you get this step wrong, the entire process could be compromised.
Once you’ve identified the relevant topics, the next step is stakeholder engagement. You need to engage with stakeholders to validate which IROs are material and which are not. This involves translating each IRO into a relevant question for your stakeholders. If you fail to select the right IROs or formulate clear questions, the results might surprise you. You could end up with IROs being classified as material when they aren’t, or worse, non-material when they should be.
Even if you successfully engage with your stakeholders and reach a statistically relevant sample size, you’re still left with thousands of scores and comments to sift through to determine material topics. As you can see, a DMA is an involved process. However, if done correctly, you’ll ensure that your CSRD report focuses on truly relevant topics.
Enter Karomia. We recognized these complexities early on and designed a solution that supports you through the entire DMA process, from A to Z. Our solution is built on the concept of AI-first. It’s not just a product with an integrated AI chatbot; it’s a comprehensive AI engine at its core.
Instead of manually identifying relevant IROs, you simply input your activities and documents, and our AI engine determines your relevant impacts, risks, and opportunities.
Our AI generates the best questions for your IROs, complete with relevant context, helping stakeholders provide more accurate and relevant responses.
Our software constructs and manages surveys, interviews, and focus groups. Data flows into a central database, making it easy to track. Our survey engine dynamically selects questions based on respondents’ self-assessed interest and expertise, shortening surveys while improving engagement quality.
Instead of manually consolidating scores and comments in Excel, our AI engine determines material topics. You can steer the process by applying higher weights to more important or knowledgeable stakeholders.
We generate a compliant report that you can download and adjust to your liking. Karomia boasts a flawless track record with a 100% compliance rate.
We’ve worked with businesses like yours. If you have a lot of documents to screen, our solution allows you to upload and validate what’s generated efficiently.
We cater to pragmatic SMEs that want quick and efficient results. Even if you lack necessary documents, we leverage public reports, industry reports, and competitor documentation to identify the right IROs.
This is the first article in a four-part series. Next blog, we’ll zoom in on how our AI extracts insights from your documents, surpassing typical DMA processes to provide extra meaningful strategic insights. Stay tuned!
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