15 October 2025 – Cleerit ESG

AMF, the French Financial Markets Authority assessed a sample of ESRS statements published by French listed companies under the CSRD for financial year 2024.

This report is very valuable as it gives you information on what the financial marketplace is expecting from your sustainability reports.

We will send you the information regrouped by subject.

Below you will a summary of the key findings related to the Double Materiality Assessment outcome and description of IROs (ESRS 2 SBM-3).

Reporting on materiality assessment outcomes (SBM-3)

There is an increased comparability with a widespread use of the ESRS 1 AR16 list of topics and sub-topics (standardized terminology), even if the mapping with these ESRS topics is sometimes unclear

The format, granularity and location of these disclosures are very heterogeneous.

Several companies present both a brief overview of the material IROs in the general section and a more detailed description of IROs in the topical sections, which seems to be a balanced approach to avoid duplications and increase overall readability of the report.

Many companies present the results of the DMA in tables or with narrative information.

Only a few companies presented a matrix that maps IROs on financial and impact materiality axes (in addition to other narrative information).

One common evolution is the replacement of the “stakeholders’ view” axis by the broader “impact materiality” axis.

As a good practice, a few companies provide a comparison of the DMA results with previous reporting periods (with more or less details on the changes). Others explain that the results were not comparable because of changes in methodology.

Examples of common shortcomings:

While most companies report on all their material topics, a few companies only report on most material/critical topics (which is not in line with ESRS requirements).
The nature of IRO is unclear (e.g. to distinguish risk vs impact or « positive » vs. « negative ») or the description of the IRO is missing or boilerplate (e.g. for impacts, not possible to understand the effect on people or the environment, as required by SBM-3).
Missing information on associated time horizons or location in the value chain. Few companies explain difficulties to evaluate IROs on different time horizons.
Unclear mapping between material IROs and sustainability topics (listed in ESRS 1 AR 16) and unclear identification of entity-specific subtopics.
Mitigation of a negative impact is sometimes presented as a positive impact (or a potential sustainability risk is presented as an opportunity).
Inconsistencies in the list of material IROs presented in different parts of the statement.
Presentation of materiality matrix with no precise axes (line drawn for materiality threshold with no figure/explanation on the construction of the graph).

Distinction of gross vs. net IROs and their description

Not all companies clearly distinguish between gross and net IROs when presenting the result of the DMA (if prevention and mitigation actions were taken into consideration or not), although several companies explain that the aim of the DMA process is to identify gross IROs.

We sometimes noted some confusion: some companies present their mitigation efforts (net IROs) within their IRO-1 sections, which should be focused on gross IROs in line with the ESRS.

A good practice identified was that several companies establish a link between the DMA results and risk factors identified in the management report.

Most refer to the sustainability statement in the risk factors section. However, the difference with the ESRS approach is not explained.

Some companies make the connection within the sustainability statement itself and explain the differences with risk factors (ESRS based on gross assessment, vs. risk factors based on net risks assessment).

Current financial effects (SBM-3, 48d)

Many companies do not disclose information on current financial effects required by SBM-3.

For other companies, the methodology used is often not presented (for example: how net effects are assessed).

Some companies explain that they do not have current financial effects, without explaining the methodology.

Some companies provide generic narrative disclosures (only describing the nature of the risk or very brief explanation on both financial effects and impacts on people of an IRO in the same paragraph).

Few provide more specific information by referring to the current financial effects presented in the notes in the financial statement.

Anticipated financial effects (SBM-3, 48e)

Most companies do not disclose this information, and some companies explicitly state that they are relying on the phase-in option.

Among the few companies that report that they have assessed anticipated financial effects, only one provides quantitative estimates on a voluntary basis but restricted to short term horizons.

There is not always a clear distinction between current and anticipated financial effects in the disclosures.

Source: https://www.amf-france.org/sites/institutionnel/files/private/2025-10/amf_study_csrd_reporting_the_way_forward_2025.pdf

When you use Cleerit ESG to structure and document your IROs and double materiality assessment you increase both ESRS compliance and make CSRD useful for your business as it will help you identifying issues material for your resilience and competitiveness. Contact us if you want to know more >>>

AMF, the French Financial Markets Authority assessed a sample of ESRS statements published by French listed companies under the CSRD for financial year 2024.

This report is very valuable as it gives you information on what the financial marketplace is expecting from your sustainability reports. We will send you the information regrouped by subject. Below you will a summary of the key findings related to the Double Materiality Assessment (DMA) process (ESRS 1 & ESRS 2 IRO-1).

Presentation of the DMA process (in IRO-1)

Overall, a heterogeneity was noted with regard to the level of detail and degree of compliance with the required data points on the presentation of the DMA process (IRO-1 data points).

Some companies provide detailed explanations per topic while others present more generic information on how the process was conducted.

Compliance with all IRO-1 data points was generally partial. For instance, a large number of companies do not disclose the topical IRO-1 associated with their non-material topics, although these are always to-be disclosed data points.

Specific information on the DMA process related to social topics is provided only in very rare cases.

Input parameters, sources/assumptions

Some companies provide incomplete or boilerplate disclosures on the input parameters used (for instance, only focusing on material topics or providing broad references applicable to all topics such as “industry benchmarks”).

Others disclose very specific information on the sources/assumptions that informed the DMA process.

For social-related topics information on input parameters is often not specified, contrary to other environmental topics.

Some companies provided interesting contextual information on the methodology used in relation to certain materiality criteria. For example, they explain that

the “scale” of the impacts is assessed in relation to % of people concerned vs. environmental parameters, or
pollution impacts’ severity is assessed via concentration metrics vs. volume metrics only.

Duplicating the content of ESRS 1

Many provide extensive explanations on the definition of impact materiality and financial materiality and the different criteria that must be considered in application of the ESRS (often by duplicating the content of ESRS 1).

These elements can be useful for non-expert readers in the context of the first ESRS application.

However, in some cases, the IRO-1 disclosures have little informative value as they reproduce the content of ESRS 1 with no or few methodological explanations specific to the issuer (for instance, only boilerplate disclosures stating that judgements were applied).

Therefore, it is sometimes difficult to understand how the two processes for impact and financial materiality are designed in practice.

Unclear distinction between a risk and an impact

In some cases, the distinction between a risk and an impact is not clear due to misuse of terminology (e.g. use of the term « risk » associated with the description of an impact) or because the company explains that the same materiality threshold is used for both impact and risks.

Information on materiality thresholds

Information on impact materiality thresholds is very often generic or missing, limiting the understanding of the DMA methodology used and demonstrating the need for further guidance in this area.

Example of generic disclosures are:

boilerplate disclosure on the existence of a threshold
theoretical quantitative threshold (such as: “on a scale from 1 to 5 in terms of materiality score, the impact materiality thresholds is set at 3”), which does not inform on the parameters specific to the entity that define materiality.

Companies may have had difficulties identifying relevant thresholds at consolidated level and only defined generic thresholds at macro level.

A focused assessment of E2 and E4 disclosures showed that the information on how impact thresholds are determined is generally not provided at the topic-level although materiality depends on the nature of topics.

Good practices

Conducting an assessment at the level of IRO (vs. at the higher level of topics only) is important since companies should present their IROs and how they manage them, in line with CSRD objectives.

It is key to maintain the assessment of actual and potential impact as well as risks before taking into consideration mitigation efforts, to provide a complete overview of the company’s sustainability profile (meaning not a net assessment).

The most useful data points in IRO-1 are information on the input parameters and their link with the materiality thresholds specific to sustainability topics, as well as information on the nature of financial thresholds (several good practices were identified in 2025).

These disclosures are most useful when the company specify which inputs (sources, tools) were used in relation to a particular sustainability topic (e.g. mention of databases such as UNEP’s ENCORE, WWF’s Water Risk Filter in relation to specific environmental topics or mention of specific rating tools for the business conduct topic). Many companies also cited the Aqueduct water risk tool from the Word Resources Institute to assess water-related risks.

Good practices include the following information in IRO-1:

a brief explanation on how criteria for impacts or risks are assessed, with concrete examples of input parameters taken into account (e.g. for the “scope” criteria: % of sites or financial expenditures related to the impact)
information on the difference between the assessment methodology for risks and for opportunities (cases were rare)
specific information on impact vs. financial materiality thresholds (see below on thresholds)
precise explanations on the alignment or partial alignment between financial materiality assessment and the ERM (enterprise risks management) process.

Good practices already observed for financial thresholds include:

Explaining the articulation with the company’s overall risk management process and ESRS thresholds (either to explain alignment or differences).
- However, some companies provided boilerplate explanations on the alignment with the financial statement thresholds.
Specifying the nature of the thresholds used (e.g. based on EBITDA or revenue) or even giving the threshold itself: e.g. “critical if >27% of EBITDA”, “threshold set at a probable risk of €50 million.

Limits and difficulties identified by companies or auditors on the DMA

As a good practice, several companies explicitly report challenges related to the execution or scope of their materiality assessment

However, the consequences of these difficulties are not always clear (reliability of data? limited scope/coverage? etc.) and the reasons for limitations were not always given.

Examples of challenges and limits identified by companies are:

Difficulties in defining materiality thresholds
Lack of value chain data or reliability of value chain data. As a consequence, several companies focused their DMA this year on their own operations and tier-1 value chain – a company mentions in particular the lack of upstream data to assess negative biodiversity impacts and water-related IROs.
Difficulties in quantifying sustainability risks (translating qualitative risks into measurable financial or impact terms).
Risks associated with certain topics were not assessed (limited scope/coverage of the DMA assessment)

Very few auditors specifically point out limits in the company’s DMA process.