Double materiality analysis

By engaging with stakeholders and assessing how we impact – and are impacted by – various ESG matters (environmental, social and governance), we ensure that we focus on the right things and that sustainability is embedded in everything we do.

Billerud’s double materiality assessment is the basis for our 2024 Sustainability Report and is aligned with the European Sustainability Reporting Standards (ESRS). The process for the double materiality assessment involved collaboration with a wide range of stakeholders as well as interviews and desktop research.

Key steps of the process are listed below:

Identification of key sustainability matters and stakeholders
We identified key stakeholders to identify and assess impacts, risks and opportunities. To ensure that all sustainability matters were covered by a stakeholder interview, we conducted a mapping of all relevant sustainability matters and ensured that such sustainability matters were covered in each interview.

Identification and assessment of impacts, risks and opportunities
We collected information on already identified impacts, risks and opportunities related to environmental, social and governance (ESG). This included incorporating data from our previous materiality assessment, our Task Force on Climate-Related Financial Disclosures (TCFD) assessment, other sustainability disclosures, ISO risk assessments, as well as topics highlighted by external databases such as ENCORE and SASB. During the interviews, stakeholders provided input to already identified topics as well as new insights on sustainability matters.

Impact prioritization
Impacts were assessed by severity (scale, scope and irremediability) and likelihood. A threshold was established that gave precedence to severity over likelihood. Adjustments were made for human rights-related impacts by applying a lower threshold. Actual impacts were given a 100% likelihood. Potential impacts were categorized from unlikely to almost certain using a five-step scale.

Risk and opportunity prioritization
Risks and opportunities were scored based on financial magnitude and likelihood and classified by nature of the financial effects. The financial magnitude was built on the existing scale in our Enterprise Risk Management (ERM) framework. The scale for likelihood was the same as outlined for impacts. For climate risks and opportunities, our TCFD assessment was incorporated within the assessment.

Sign-off by management
The result of the double materiality assessment was presented to members of Billerud’s Group Management Team for sign-off. Billerud’s Audit Committee and Board of Directors have also been presented with the result of the double materiality assessment during the year and accepted the results.