As financial institutions and asset managers navigate a complex web of global reporting requirements, Montreal-based ESG software provider Novisto has introduced Novisto Materiality. This newly integrated module seeks to transition double materiality assessments from isolated, point-in-time consulting exercises into continuous, platform-native workflows.
The launch coincides with a rapidly hardening regulatory landscape. Under the European Union’s Directive (EU) 2022/2464—commonly known as the Corporate Sustainability Reporting Directive (CSRD)—qualifying entities are legally bound to apply the European Sustainability Reporting Standards (ESRS). These EFRAG-developed standards cement double materiality as a mandatory filter, requiring firms to evaluate sustainability topics through two lenses: the financial effects on the business (outside-in) and the enterprise’s impact on the environment and society (inside-out). Beyond European borders, the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 frameworks, alongside the Global Reporting Initiative (GRI), similarly compel companies to systematically quantify climate and sustainability exposures.
Transitioning away from static snapshots
Historically, mapping these impacts and financial risks involved a fragmented web of decentralized spreadsheets, qualitative stakeholder interviews, and static advisory reports. While these conventional methods generated baseline snapshots, they lacked the persistent, audit-ready data lineage required by modern assurance protocols. As business footprints expand, markets change, or supply chains shift, retracing the logic of past manual assessments often proves cumbersome.
To counter this, Novisto Materiality integrates a science-based analytical layer driven by GIST Impact. Instead of relying strictly on subjective survey feedback, the platform applies quantitative scoring logic anchored in concrete evidence, such as geographic vulnerability to water scarcity or a facility’s proximity to sensitive ecosystems.
Core workflow capabilities of Novisto's Materiality solution
The new tool offers an end-to-end digital infrastructure for conducting these critical assessments, whether to satisfy EFRAG’s rigorous reporting steps or global ISSB investor demands. Key features include:
- Centralized Data Aggregation: Guided workflows channel both qualitative insights and quantitative primary data into a unified hub.
- AI-Assisted Scoring & Ingestion: The system extracts data from unstructured documents—including handwritten notes and PDFs—and leverages artificial intelligence to generate objective impact and financial materiality scores for distinct sustainability topics.
- Native Stakeholder Collaboration: Organizations can conduct validation surveys directly within the application, eliminating the need for disconnected third-party tools
- Transparent Decision Tracking: Sustainability teams can meticulously document the rationale behind each materiality threshold decision, ensuring a highly defensible record.
- Assurance-Ready Architecture: The platform establishes a clear data trail between the underlying evidence, the resulting scores, and the final public disclosures, streamlining the auditing process.
A strategic foundation for ESG
Ultimately, treating double materiality as a biennial compliance hurdle fails to capture its broader business value. According to Novisto CEO Charles Assaf, managing ESG data requires the identical rigor historically reserved for financial accounting. By hardwiring the assessment phase into a broader sustainability management system, firms and advisory consultants can continuously monitor material risks, ensuring their reporting architecture remains highly responsive to both internal strategic pivots and external regulatory shifts.
About Novisto
Novisto is the all-in-one enterprise system for sustainability performance management. Founded in 2019 and headquartered in Montreal, the company provides the digital infrastructure that large organizations need to manage sustainability data, disclosures, and performance with the same rigor as their financial data. Novisto helps sustainability leaders move beyond compliance and support long-term business resilience through reliable, actionable insights.
