Novisto launches tool for double materiality assessments

Novisto has launched Novisto Materiality, a new tool within its sustainability platform for companies carrying out double materiality assessments for sustainability reporting.

The Montreal-based company said the product is designed to shift materiality assessments from periodic, consultant-led reports to a process managed within a single software system. It is integrated into Novisto's broader platform for sustainability data, disclosures and performance management.

Double materiality assessments have become a central part of sustainability reporting requirements for many large organisations. Under the European Union's Corporate Sustainability Reporting Directive, companies must assess both how sustainability matters affect the business and how the business affects people and the environment.

Novisto said the same broad concept is also relevant under standards developed by the International Sustainability Standards Board and the Global Reporting Initiative. That has increased pressure on companies to produce a documented, auditable basis for deciding which environmental, social and governance issues are material.

Integrated process

Organisations have often relied on surveys and consultant analysis to carry out these exercises. In many cases, that has made materiality reviews one-off projects, producing reports that were hard to update and difficult to connect to ongoing disclosure work.

Novisto Materiality is intended to bring those steps into a single workflow. The company said teams can collect qualitative and quantitative inputs, generate scores for topics and risks, engage internal and external stakeholders through surveys, record decisions and maintain evidence for assurance and audit.

The product's scoring approach uses methodology from GIST Impact. Novisto said the system is intended to provide a standardised framework for comparing sustainability issues and documenting the rationale behind decisions.

Because the tool sits within the wider Novisto platform, users can link assessments more directly to disclosures, the company said. That would allow businesses to keep a clearer record of how conclusions reached during the materiality process flow into reported sustainability information.

One use case cited by Novisto is the assessment of a potential acquisition. Rather than waiting for a scheduled review cycle, sustainability teams could run a new assessment when a business decision requires it.

Reporting demand

The launch reflects a broader shift in the sustainability software market as regulation pushes companies to formalise reporting processes. Materiality assessments have moved from a strategic exercise used to guide corporate responsibility programmes to a more structured reporting requirement with audit implications.

That has created demand for systems that can preserve evidence, show approval trails and connect decisions to reported metrics. Software providers are increasingly positioning their products as the operational layer between sustainability teams, finance functions, auditors and external stakeholders.

Founded in 2019, Novisto focuses on sustainability performance management for large organisations. Its platform is used to manage sustainability data and disclosures, and the new product expands its role into the earlier stage of determining which issues should be prioritised.

Novisto also said the tool could be used by consulting firms carrying out assessments for clients. That suggests it is seeking to serve both in-house sustainability teams and advisers supporting companies through compliance and reporting programmes.

One customer highlighted the appeal of closer links between assessment and disclosure. "Materiality assessments involve a significant amount of stakeholder input, analysis and judgement," said Katherine Bruce, ESG Reporting Lead, Emirates Group.

"Embedding materiality directly within Novisto will help us maintain a clear connection between those decisions and the resulting disclosures, improving transparency, traceability and consistency throughout the reporting process," Bruce said.

For Novisto, the launch is also an attempt to redefine materiality as an ongoing management process rather than a periodic reporting task. The company argues that businesses need to revisit materiality more often as regulations change, operations shift and new risks emerge.

Charles Assaf, Chief Executive Officer and Co-Founder of Novisto, set out that position in announcing the product. "Materiality should not be treated as a box to check once every two years," Assaf said.

"We believe the effectiveness and reliability of ESG and risk programs depend on the integrity of their starting point. This launch reflects our vision of giving organizations the confidence to manage sustainability information with the same discipline as financial information," he said.