GLOBAL ESG MONITOR 2025: MATERIALITY ANALYSIS WIDELY ADOPTED – INTEGRATION INTO RISIK MANAGEMENT SHOWS GAPS

GLOBAL ESG MONITOR 2025: MATERIALITY ANALYSIS WIDELY ADOPTED – INTEGRATION INTO RISIK MANAGEMENT SHOWS GAPS

Wiesbaden, December 17, 2025 – 87 percent of DAX companies have conducted a Double Materiality Analysis – an increase of 37 percentage points compared to the previous year. Yet application alone is not enough: the latest Global ESG Monitor (GEM) study reveals significant discrepancies between companies’ own materiality assessments and external stakeholder expectations, as well as gaps in integration into risk management.

Double Materiality Analysis (DMA) reshapes risk awareness

An analysis of 151 companies within the DAX family concludes that the DMA is a key strategic instrument capable of elevating risk management to a new level. The extent of development becomes clear in comparison with the previous year: more than half of the companies expanded the scope of material topics through the DMA, thereby identifying impacts and risks that had previously not been on their radar. Nearly a quarter were able to actively reduce the scope – a sign of deliberate prioritization.

Chemical sector: Pollution as a blind spot?

In practice, there is ongoing debate about how complete material topic lists actually are and how well the results of the DMA align with stakeholder expectations. A reality check using the chemical sector as an example revealed discrepancies in the area of pollution between companies’ self-assessments and external risk evaluations by stakeholders, e.g. from the financial sector. A database that banks and insurers can use to identify nature-related risks to which they are exposed through lending, underwriting, and investments in high-risk industries and sub-sectors identified 21 material pollution impacts for the sector. However, around half of chemical companies did not classify pollution as material. Why this is the case cannot be clearly determined based on the reporting.

Ariane Hofstetter, Co-Founder of the Global ESG Monitor, explains:

"Those who identify discrepancies early can contextualize them in their report or clarify them through stakeholder dialogue.“

Time horizons and indirect impact pathways as structural barriers

Nature-related risks materialize over the long term, while traditional risk systems measure short-term impacts. According to the database, 60 percent of nature-related risks have medium- to long-term effects, whereas established risk systems tend to cover shorter time horizons. In addition, some of these risks act indirectly – through supply chains, regulatory changes, or market shifts. These indirect impact pathways are more difficult to quantify and require different approaches than traditional financial risks. Integration therefore does not mean building parallel systems, but translating long-term and indirect risks into early indicators that can be measured in the short term.

Integration Gap: 23 percentage points between ambition and reality

More than half of DAX companies state that they have fully integrated sustainability risks into risk management. Yet just over one-third demonstrate this through consistent risk descriptions across both reporting sections.

This reduces traceability for external stakeholders: for instance, if water scarcity in the sustainability statement and production interruptions in the risk report are not clearly linked, cascading effects remain hidden between the lines.

Three maturity stages of materiality analysis

The study identifies three maturity stages: Adopted, Complete, and Integrated. Most companies are at stage 1. Stage 2 is where the real work begins. 

About the Global ESG Monitor:

The Global ESG Monitor (GEM) is an independent think tank dedicated to analyzing and comparing the quality of sustainability reports. Since its founding in 2020, GEM has examined more than 1,400 reports from over 500 companies worldwide. Further information is available at www.globalESGmonitor.com.

Contact:

Michael Diegelmann
Phone: +49 61120585512
Email: michael.diegelmann@globalESGmonitor.com 

Ariane Hofstetter
Phone: +49 61120585521
Email: ariane.hofstetter@globalESGmonitor.com