CSRD and social issues: how to strengthen your double materiality assessment

Since the Omnibus package took effect in early 2025, the CSRD now applies to fewer companies and requires a lighter level of detail, particularly on social issues. This scaling-back can feel like relief. Yet it changes only one thing: what the law requires you to do, not the real social risks you carry, nor the positive impacts you generate across your value chain. You now face a choice: settle for the new regulatory minimum, or continue to assess these issues in depth.

 

That choice plays out against a backdrop of growing unpredictability, in which a social risk once considered under control can turn into a reputational or operational crisis more quickly than before. This unpredictability is, almost mechanically, sharpening the attention certain stakeholders pay to how these issues are managed. Your largest clients and principals are themselves subject to the CSRD and accountable for their own value chains. Your investors and insurers, meanwhile, are increasingly factoring social risk into their decision criteria. In both cases, their interest has nothing to do with a regulatory obligation weighing on them directly; it stems from their own exposure, which depends directly on yours.

 

That leaves one simple question: where, concretely, do these risks and opportunities sit within your value chain? Double materiality assessment is meant to answer it. The real question is whether it can actually do so on the social dimension.

 

Why does the social dimension resist double materiality?

 

A framework that sets criteria, without a method for applying them

 

On paper, double materiality assessment is clearly mapped out: it requires you to identify your stakeholders, take their perspectives into account, and then assess your company's positive and negative impacts. Financial risks and opportunities linked to your activities and dependencies are added on top of this.

 

For both positive and negative impacts, materiality is assessed against several criteria:

• the scale of the impact;
• its scope;
• for negative impacts, whether it is irremediable;
• where the impact is potential rather than actual, the likelihood of its occurrence.

 

One exception structures this framework, however: for a potential negative impact linked to human rights, severity takes precedence over likelihood. A severe but unlikely risk then carries the same weight as a severe and certain one: the issue cannot be downplayed on the grounds that it remains hypothetical.

 

Regulation therefore sets out the criteria to consider. What it does not provide is a common method for measuring them: it is up to you, or the firm advising you, to build and defend your own assessment framework in front of an auditor.

 

Several questions follow: how do you determine that an impact is "severe" rather than "moderate"? What scale should you use, and on what basis? How do you translate a stakeholder's viewpoint into data that can be compared across issues? Which topics fall under human rights, and which do not?

 

A difficulty magnified on social issues

 

In practice, this absence of a shared method leads to divergent assessments. Each company or consultancy builds its own framework, and two people analysing the same situation can reach different conclusions.

 

Take the issue of "inadequate wages": your employees and your HR department will not necessarily see it the same way. Objectified data (average wage, minimum wage, local benchmarks, changes in the wage bill over the past three years) helps bring these two readings back to a common basis.

 

This difficulty is not unique to social issues: thresholds themselves, whether they concern tonnes of CO₂ or an accident frequency rate, remain partly conventional and open to challenge. What genuinely sets social issues apart is access to data.

 

Environmental issues rely on standardised units of measurement and data-collection chains that are already in place across most of your suppliers. Social data, by contrast, is far harder to trace back through a value chain that is often long and opaque beyond the first tier.

 

The comparison becomes even trickier when the assessment extends across the value chain. How do you apply the same framework to a social impact occurring in a country where labour law, economic context and social norms differ significantly from those at your headquarters? The same fact (excessive working hours, inadequate safety conditions, gender inequality) can be assessed very differently depending on whether it is measured against local law, an international reference framework, or your group's internal rules.

 

Two cases where context changes the scoring

• Child labour: its severity is beyond question, and international reference frameworks rank it among the most severe impacts requiring priority action. In certain socio-economic contexts, however, it can also contribute to a family's subsistence where access to education, social protection or other alternatives remains limited. This makes it neither acceptable nor justifiable. It does raise a genuine methodological question, though: how do you assess it consistently across contexts, and how do you end it without proper support, at the risk of worsening the very situation you are trying to correct?
• Corruption: in some countries, an informal payment made to unblock an administrative procedure may be seen as common practice, even as a social norm, even though it is strictly prohibited under your group's standards. The question then becomes which reference framework to apply: local law, international law, or your own internal rules. That choice is yours to make, and to justify should an auditor or a stakeholder challenge it.

 

These situations do not show that social issues are inherently harder to assess than environmental ones. They show that, under the CSRD, no shared, standardised framework currently exists for assessing them, unlike the position for many environmental issues. In the absence of such a framework, assessment inevitably involves interpretive choices shaped by context, the reference framework selected, and the information available. It is this absence of a shared method, not social assessment itself, that undermines the consistency and comparability of your double materiality assessments.

 

It also raises the question of how traceable your decisions are. To be credible, you must be able to explain why an impact was deemed material or not, which sources were used, and how any disagreements between stakeholders were resolved.

 

The goal, then, is not to eliminate subjectivity altogether (an illusory aim for any double materiality issue), but to frame it. This means formalising assessment criteria, documenting the choices made, and drawing on shared tools to make your results more consistent and comparable.

 

How does Social LCA provide a framework for assessing your social footprints?

 

Social Life Cycle Assessment (Social LCA) is the method EVEA uses most to assess your social footprints, the positive and negative impacts generated across your value chain. Where double materiality reaches its limits on the social dimension, Social LCA allows you to assess these impacts more effectively across that same chain.

 

Within the CSRD framework, it lets you draw on documented data, prioritise your issues more effectively, and make your assessment choices more explicit. It does not replace dialogue with your stakeholders; it complements it with a more structured, more documented approach.

 

Data to objectify perceptions

 

As a first approach, Social LCA can draw on databases such as SHDB or PSILCA. These databases aggregate statistical data from numerous internationally recognised sources (WHO, ILO, World Bank, UNICEF, UNDP, among others). For each country-sector pairing, they characterise average exposure to certain social risks (child labour, forced labour, freedom of association, corruption) and also document certain opportunities, such as local job creation or access to training. The SHDB, for instance, covers 244 countries and territories, 65 economic sectors under the GTAP model, and 130 social indicators across 30 sub-categories and 5 categories.

 

This remains a proxy-based approach: in the absence of data specific to your value chain, it builds a hypothesis from sector- and geography-based statistics. It does not replace the assessment carried out in workshops with your stakeholders; it complements it.

 

It helps correct a common bias: underestimating a risk simply because no stakeholder has raised it, or, conversely, failing to give credit for a positive impact that no one had previously thought to measure. In neither case does this prove that the situation exists at a specific supplier: it provides a documented starting point, to be refined through more specific analysis.

 

This approach lets you identify potential impacts, and therefore issues relevant to your company. You can then define indicators to assess your actual impacts, and put action plans in place where relevant.

 

A less subjective way to prioritise

 

The social life cycle performance assessment approach (S-LCPA) set out in ISO 14075, the standard governing Social LCA, defines a scoring method based on rating scales. For each issue, indicators are assessed against thresholds, or "performance reference points", used to assign a score. These thresholds are generally drawn from national or international regulation, or from your organisation's own level of ambition.

 

Human judgement remains essential to interpret, contextualise and adjudicate complex issues shaped by differing contexts and remediation pathways, such as child labour or corruption. But it now bears on "how to interpret an objectified piece of data", rather than "on what basis to argue for this issue's score".

 

Defensible choices, thanks to traceability

 

Social LCA requires you to make explicit the reference framework used, the sources drawn upon, and the underlying calculation logic. Faced with an auditor or a critical stakeholder, you can rely on a documented method rather than "this is what came out of our workshops".

 

The relationship also works the other way: the CSRD imposes a governance framework (management involvement, stakeholder consultation, a disclosure requirement) that reinforces the integration of Social LCA into your decision-making processes, and improves its visibility.

 

Above all, it compels teams that rarely work together (HR, procurement, sustainability, finance, legal) to pool information that no single function holds in full.

 

In short: the CSRD structures your approach and creates the conditions for collective work. Social LCA supplies the data and the method to objectify your social footprints.

 

What does Social LCA change in your decision-making on social risk?

 

A more robust method is only worth having if it genuinely changes what gets decided afterwards. Here are the concrete levers, relevant regardless of your sector, for making that happen.

 

Prioritise action based on actual risk, not internal visibility

 

Without objectified data, the temptation is to address social issues in the order they surface from operational teams, or according to whatever is most sensitive at the time.

 

A company might spend several months on a local issue well documented by its teams. Meanwhile, a risk of forced labour may exist somewhere in its supply chain, never mentioned because no one internally has direct visibility of it.

 

Sector- and geography-specific data helps restore the right order of priority: cross-referenced with company context and stakeholder input, it surfaces what is genuinely most pressing, not merely what is most visible internally.

 

Defend your supplier or site-location choices to a demanding third party

 

When a company decides to maintain, suspend or audit a supplier relationship, that decision increasingly rests on a documented case. Built on documented data, an explicit reference framework and a traceable calculation logic, such a case can justify the choice to a demanding client, an investor, or in the event of a dispute. A case built on "our impression after several exchanges" is far harder to defend.

 

Anticipate rather than react

 

An objectified score, updated over time, lets you track a trajectory: a country whose score is deteriorating on freedom of association, a sector where child labour is declining. This does not predict a specific incident at a given supplier. It does, however, let you adjust your vigilance priorities upstream, focusing on the regions or sectors coming under strain, rather than discovering the problem once it has already become a media or contractual crisis.

 

The same indicators can also be used to measure the effect of your action plans over time, and to document that progress in your reporting rather than leaving it as an impression.

 

Give visibility to what is already positive but unseen

 

A company that creates stable local jobs, trains its suppliers, or improves working conditions across its value chain generates a real social impact, one that rarely gets seen for lack of data to substantiate it. A score documenting this kind of impact lets you put it in front of clients and investors, or use it in tenders that increasingly include social criteria, rather than leaving that advantage dormant for want of proof.

 

Is your sector exposed to these social risks?

 

This methodological fragility is not a theoretical problem. It plays out differently from one sector to another, but it affects all of them.

 

Two examples:

• Textiles: value chains often run across three or four tiers of subcontracting, with documented exposure to child labour and excessive working hours. A score based solely on your own workshops underestimates the risks at tiers 2 and 3, for lack of direct visibility. A supplier investing in training or worker safety, conversely, holds an asset rarely substantiated or communicated to clients.
• Electronics: mineral sourcing (cobalt, tin) combines child labour, mining safety and local corruption within a single supply chain. Without an objectified hierarchy, these issues get addressed as a block, or not at all. Material choice then becomes as much an R&D decision as a procurement one, and more responsible sourcing becomes a genuine commercial argument, provided you can prove it.

 

In both cases, the same finding holds: this methodological fragility only becomes visible once it turns into a problem. The stakes go beyond image or compliance: a supplier struggling with its own social issues (turnover, disputes, sanctions) can simply become unable to deliver, putting your own supply chain at risk.

 

The same fragility can limit the usefulness of your assessment for due diligence purposes under the CSDDD (the Corporate Sustainability Due Diligence Directive, sometimes referred to in France as the "CS3D") and France's duty of vigilance law (devoir de vigilance). Both frameworks were also revised under the Omnibus package: a poorly documented mapping exercise will need supplementing with analyses and measures specific to these instruments. An assessment that is already objectified and traceable, however, gives you a solid basis to build on rather than starting from scratch.

 

Double materiality in the service of strategy

 

Omnibus has eased the regulatory burden. It has changed nothing about the fact that companies carry social risk exposure across their value chains: exposure that matters to their clients, their investors and, increasingly, their insurers.

 

On paper, double materiality remains the tool designed to map these issues: risks, impacts, opportunities. But a framework without a harmonised scoring method produces a fragile map, especially on the social dimension, for lack of shared, comparable indicators.

 

Social LCA does not replace human judgement, nor the governance framework the CSRD imposes. It gives them a foundation: data to complement and put perceptions into perspective.

 

One question remains, specific to each company: where, in your value chain, do impacts and opportunities that you have not yet identified, or correctly prioritised, actually lie?

 

By Telma Daheron, CSR consultant This topic is followed at EVEA by Laurence Beck and Julien Larrenduche, LCA and eco-design consultant