Exploring Double Materiality under CSRD: Early Implementation in Practice and Stakeholder Perceptions - A Case Study of Bulten AB

Abstract

Background and problematization: Since the introduction of the Corporate Sustainability Reporting Directive (CSRD), the concept of double materiality (DM) has become a core concept in corporate sustainability reports. However, there is limited empirical understanding of how DM is construed and operationalized by organizations internally and how external stakeholders value DM. While regulators highlight both financial and impact materiality, early adopters of DM are attempting to reconcile compliance, stakeholder expectations, and organizational readiness hurdles. Understanding how these issues take place in practice is still lacking.

Purpose: This study aims to explore how double materiality is perceived from the internal implementation perspective within a Swedish manufacturing company and how it is interpreted by external stakeholders, specifically investors and auditors.

Method: The study employs a qualitative single case study analytical approach focused on Bulten. Semi-structured interviews were conducted in the data collection stage with internal employees, investors and auditors, to collect primary data. Thematic analysis was performed to synthesise and understand typical patterns and trends which will reflect over how perspectives, issues and organizational practices of DM implementation were perceived.

Conclusion: The research concludes that Bulten uses an iterative and collaborative approach to double materiality implementation. However, there are internal limitations imposed on the implementation by a variety of personnel constraints. There are varied levels of interest among stakeholders and fellow participants; for auditors their interests are in internal controls, while investors choose to ignore non-financial materiality resulting in an interest primarily with financial materiality. The findings highlight DM as a complex reporting framework and strategic management tool, nevertheless there is an expectation of effective policy language and adequate organizational capabilities. Also emphasize that successful integration requires organizational commitment, clear communication, and stakeholder engagement.