Double materiality assessment: Why rigorous ESG risk mapping isn’t optional anymore

Double Materiality Assessment (DMA) has become a central concept in Environmental, Social, and Governance (ESG) frameworks, especially under recent regulatory initiatives like the EU Corporate Sustainability Reporting Directive (CSRD). While implementation of DMA will only become mandatory for many companies over the next few years, there are already discussions at the EU commission in Brussels about simplifying the process to ease adoption. As an early adopter, Trinasolar shares insights on the purpose and benefits of DMA, makes a strong case for full-scope transparency, and reflects on key learnings from the 2024 DMA matrix rollout.

Why is DMA relevant now?

DMA is already required for large EU Public Interest Entities (PIEs) such as financial institutions for their financial reports for FY 2024. Following the stop-the-clock Directive adopted by the EU in April 2025, the assessment will also become mandatory for large EU companies, listed SMEs on EU-regulated markets and non-EU companies in the next three to four years. Renewable energy companies across Europe are therefore now beginning to formalize their DMA strategies and processes.

What is Double Materiality?

Double materiality expands the traditional concept of materiality in financial reporting. Traditional (single) materiality focuses on how ESG issues affect a company's financial performance, while double materiality looks at both:

• Financial Materiality – how ESG risks and opportunities impact the company
• Impact Materiality – how the company affects society and the environment

This dual perspective provides a more holistic view of sustainability risks and opportunities – critical for industries at the heart of the energy transition.

Why was DMA introduced?

DMA bridges the gap between:

• Investor demands for ESG-related risk data information,
• Stakeholder expectations around corporate accountability
• The urgency of global climate and social challenges.

Specifically, the EU Green Deal & CSRD embed DMA to ensure companies are accountable not only for their risks but also for their role in climate and societal issues. Stakeholder pressure has moved ESG from being a “nice-to-have” to core expectations in corporate behavior and reporting.

What risks does DMA help address?

A Double Materiality Assessment helps organizations address a wide range of interconnected risks. It captures strategic and operational risks such as climate transition challenges (like carbon pricing or stranded assets), physical threats from extreme weather, and supply chain vulnerabilities linked to human rights and biodiversity. It also mitigates reputational and legal risks, as stakeholders can hold companies accountable for negative impacts, and stricter ESG disclosure standards make greenwashing a legal liability.

On the compliance front, failure to conduct proper Double Materiality Assessments under frameworks like the CSRD can lead to non-compliance, fines, or eroded stakeholder trust. From an investor and market perspective, poor impact disclosures can restrict access to capital, as investors increasingly integrate ESG data into decision-making.

Finally, it addresses systemic and societal risks by encouraging alignment with broader goals such as the Paris Agreement and the UN Sustainable Development Goals, recognizing companies' roles in tackling global issues like climate change, inequality, and ecological degradation.

Simplification versus rigorous tracking and full transparency

While DMA isn’t yet mandatory for many renewable energy companies in Europe, Brussels is already considering ways to simplify compliance – e.g. by reducing some annual assessment and reporting requirements to every 5 years. But can industries such as solar and energy storage afford shortcuts?

At Trinasolar we believe the renewables industry should lead by example. Demonstrating that sustainability and profitability can go hand-in-hand is essential. Advancing the transition to a net-zero future is part of our DNA. That’s why we’ve committed to Level 5 traceability for high-risk raw materials and full-scope DMA—both to strengthen our business and to build trust with customers and stakeholders.

Experiences from the DMA implementation in 2024

We have provided comprehensive ESG reporting since 2012 and formalized double materiality matrix in the 2024 Sustainability Report, aligned with Shanghai Stock Exchange (SSE) and upcoming EU standards. The SSE sustainability reporting standards that require companies to conduct Double Materiality Assessment will become mandatory from 2025 and were voluntarily applied by Trinasolar for the current year.

We followed the steps of “Identification-Assessment-Analysis-Confirmation” to conduct its materiality assessment, combining insights from stakeholder surveys and internal management interviews. This process enabled the assessment and confirmation of the impact and importance of issues from both the “financial materiality” and “impact materiality” dimensions. The materiality assessment results were then integrated into the Enterprise Risk Management (ERM) process. The company distributed impact materiality assessment questionnaires to both internal and external stakeholders, administered online surveys, and ultimately collected 338 valid questionnaires. Top management and management representatives of business departments were invited to participate in financial materiality assessment surveys. Following discussions and interviews with external experts and company management, Trinasolar finalized the 2024 Double Materiality Analysis results of ESG issues.

The full matrix and many examples of the implementation are included in our most recent 2024 Sustainability Report. They are available to support partners and companies looking to formalize their sustainability programs and DMA rollout.

Key pillars and achievements

The key pillars of the company's initiative include compliance and risk management, green lifecycle management, corporate governance and labor practices, as well as clean energy innovation.

Examples for the results already achieved within the program include a focus on sustainable product design with measurements such as:

• Reduction of environmental footprint: Less energy and water consumption, less waste, higher efficiency with less materials, PFAS-free PV modules
• Raw materials optimization: Reduction of silver content, reduction of lead content, thinner glass, less plastics by replacing back sheets with a focus on dual glass
• Quality & reliability for a longer product lifecycle: Dual-glass structure, climatic adaptation to system level, higher lifetime yield
• Circularity: Easier separation of materials, industry-leading RD&I into closed-loop recycling approaches

Responding to one of the most crucial sustainability criteria of our time, GHG emissions, Trinasolar is putting significant effort into reducing our carbon footprint at operational level too. The on-site renewable electricity generation of 223,794 MWh, a reduction of GHG emissions intensity of –65.55% for modules and -36.44% for cells, the reduction of integrated energy consumption intensity of cell -39.51% for cells and -40.19% for modules and a reduction of water consumption intensity -86.85% for cells and-67.68% for modules (2024 vs 2020) reflect the success of the program rollout.

Trinasolar has also become the first company in the solar industry to have its factories successfully third-party certified against the Environmental, Social, and Governance (ESG) standard of the Solar Stewardship Initiative (SSI).

We strongly believe DMA pushes manufacturers to think beyond compliance and financial risk, and toward strategic ESG leadership — helping them anticipate regulations, reduce impact, and build more sustainable business models.

Pia Alina Lange, serves as EU Public Affairs & Policy Director for Trinasolar in Brussels. She also serves on the board of the Solar Stewardship Initiative (SSI), is actively involved in the Global Alliance for Sustainable Energy, and is a member of the board of SolarPower Europe. Lange also sits on the board of the Global Solar Council.