From Double Materiality to Performance: Conceptualizing Reporting Under the European Sustainability Reporting Standards

ABSTRACT As social and environmental challenges intensify, the EU has introduced the Corporate Sustainability Reporting Directive (CSRD), mandating sustainability reporting through the European Sustainability Reporting Standards (ESRS). The standards mandate a double materiality assessment but leave uncertainty about the structure and contents of the reporting process and whether its implementation will ultimately improve sustainability performance. This study adopts a design science research methodology, combining a thematic analysis of the ESRS with a qualitative survey of 20 sustainability reporting practitioners from across Europe. Based on this approach, the study develops a flowchart that conceptualizes the ESRS reporting process and its potential links to performance measurement and management (PMM). Grounded in institutional theory, the study argues that such a linkage creates a feedback loop that institutionalizes sustainability within companies' continuous improvement efforts. The flowchart offers practitioners a prescriptive tool for reporting and connecting the activity to PMM, while contributing theoretically by showing how institutional pressures are operationalized in practice. For researchers, the flowchart provides a foundation for examining the connections between double materiality assessments, PMM and strategy, clarifying how reporting can go from a compliance exercise to a driver of sustainability performance.