Why Espresso House built its double materiality assessment into enterprise risk management

The floor

The regulatory floor is straightforward. A double materiality assessment identifies which sustainability topics are financially material to the business, and which represent the business’s material impacts on people and the environment. Complete it, document the methodology, and disclose the results. That satisfies the reporting requirement.

The ceiling

Espresso House went further by routing the DMA’s output through the same governance channel as every other enterprise risk: reviewed by the Leadership Team, challenged and refined, then presented to the Board for approval. The material topics didn’t get a separate track. They competed for the same attention as other enterprise risks, because that’s ultimately what they are.

Several distinct mechanisms explain why this pays off:

• Risk aversion: A DMA that never touches ERM tends to identify risks that then go unmanaged, because no one owns the follow-through outside the sustainability team. Folding the results into ERM means a material topic gets the same escalation path, ownership, and board visibility as any other flagged risk, closing that gap.
• Value creation: Feeding DMA results into Leadership Team discussions gives the business a shared, evidence-based view of which sustainability topics actually matter financially, rather than leaving that judgment fragmented across functions that each hold a partial picture.
• Resilience: A DMA treated as an annual compliance exercise ages quickly, the topics it flagged can drift out of relevance within a year. One embedded in ongoing risk management gets revisited every time the business reviews its risk register, keeping the material topics current rather than frozen at the moment of assessment.
• Efficiency: Running sustainability risk through the existing ERM process avoids building and maintaining a parallel governance structure just for material topics, work that would otherwise duplicate what ERM already does.

Who actually owns this

Espresso House’s model is a useful template for dividing ownership without collapsing into “one person is accountable for everything.”

• General Counsel led the process. At Espresso House, this is where the ERM process itself sat, and it was General Counsel who drove the DMA’s integration into it from the legal and governance side.
• Sustainability provided the underlying expertise and support. They held the topic knowledge and the assessment methodology throughout, working alongside General Counsel rather than being asked to personally push the results through governance.
• The Leadership Team reviewed, challenged, and refined the risks before anything reached the Board, meaning the material topics were tested against business judgment, not accepted as-is from the assessment.
• The Board approved the final view, giving the material topics the same sign-off any other enterprise risk would require.

The coordinating role here, General Counsel, wasn’t expected to produce every input personally. The job was to make sure the DMA’s findings actually reached the people who needed to act on them, and that they came back out the other side tested and owned.

The reflection that matters most

“For us, the real value of the double materiality assessment was never just the assessment itself, but what we could do with the results. By bringing the findings into our existing enterprise risk management process, sustainability-related risks became part of the same business discussions, governance and decision-making as other enterprise risks. That helped us move from identifying what is material to creating clearer ownership and making the findings actionable across the organization.”

— Espresso House

Espresso House’s own framing is worth sitting with: the value of a DMA isn’t in the assessment itself, it’s in what happens afterwards. A DMA that ends as a reporting exercise stays exactly that, a snapshot, disconnected from the decisions the business actually makes. One folded into ERM becomes an input those decisions can’t ignore.

Signs a DMA isn’t actually feeding into risk management

• The DMA results live in a sustainability report but never appear on a risk register or Board risk agenda.
• No single function is accountable for translating a material topic into an owned, tracked risk.
• The same material topics get re-identified year after year with no visible change in how they’re managed.
• Sustainability and enterprise risk processes run on separate calendars, owned by separate teams, with no shared review point.
• Leadership can describe what the DMA found but not what the business has done differently because of it.

Espresso House’s model works because the DMA itself was solid enough to build on, a rigorous, well-evidenced assessment is what gave the Leadership Team and the Board something worth challenging and acting on in the first place. That’s the step that has to hold up before any of this integration is possible.

Position Green’s ESRS solution has built-in support for running that assessment under the simplified ESRS requirements, so the output is ready to feed directly into a process like the one Espresso House built, rather than needing to be reworked before it can be trusted by risk owners.