The most underrated business strategy tool you’re not using yet

Every so often, a strategic tool quietly enters the scene that changes how businesses operate and reshapes how leaders think, act, and compete. Not through disruption or hype - but by revealing something fundamental that’s been overlooked.

For boards, CFOs, and executive teams navigating the complex terrain of growth, risk, and regulation in 2025, that shift is being powered by a strategy tool that few are using to its full potential.

That tool is a double materiality assessment

Double materiality gives boards a way to make smarter strategic bets, see risk more clearly, and unlock sustainability’s potential for growth - not just governance. If you're still treating sustainability as a disclosure requirement, you're missing the real opportunity: using it to sharpen your entire business strategy. 

In every boardroom, there’s a growing pressure to see around corners. Markets are shifting, investors are watching, and the resilience playbook is being rewritten in real time. Every leadership team wants to make smarter capital bets, sharpen their value proposition, and future-proof operations. Double materiality helps them do exactly that - not by adding complexity, but by cutting through it.

What is double materiality?

Double materiality is built on a dual premise: that your company both affects the world and is affected by it. It requires business leaders to examine, with discipline, how social and environmental forces are likely to influence financial performance - and how their own operations, supply chains, and value propositions impact the world around them. It’s a two-way diagnostic of exposure, influence, and consequence.

Why is it urgent now?

In short - because strategy needs a new lens.

Traditional planning models are built around internal efficiency, external opportunity, and known financial risk. But what happens when value is eroded - or created - by things outside the frame? Like shifting expectations on labour practices, biodiversity impact, or climate adaptation costs?

In a world where supply chains, customers, investors, and regulators are all recalibrating around sustainability, business-as-usual strategy no longer holds. Few leaders can say with certainty which sustainability issues deserve real boardroom attention.

Double materiality forces a fundamental shift: from asking “What should we report?” to “What actually matters?”

This shift creates strategic leverage. It shows which issues carry real financial risk, and which create brand, operational, or market opportunity. It illuminates where your business model may be exposed, and where you can lead - through innovation, supply chain design, capital allocation, or resilience planning.

Directly connect sustainability to commercial outcomes

When sustainability sits at the margins of strategy, companies tend to focus on what’s easy to measure, not what’s most important. They miss where risk is quietly accumulating. They misread where momentum is building - in markets, regulation, and society. 

So what happens when sustainability is embedded into the strategic core? 

• Boards gain clarity on the issues that will shape their licence to operate - not just tomorrow, but five years from now. Double materiality provides a lens to understand long-term resilience: Are we ready for social licence scrutiny? Will our supply chain hold up to human rights regulations? Are we ahead of upcoming climate-related disclosures?

• CFOs are better equipped to understand how sustainability-linked risks and opportunities directly affect cost of capital, margin pressure, and valuation. 

• C-suite executives get a clearer mandate for where to act, and why it matters commercially, not just ethically. Double Materiality offers alignment - a way to bring sustainability into strategic planning and market positioning without overextending resources or drowning in data.

  
  

They can all connect sustainability to the balance sheet, and non-financial signals to financial consequence. They have a language to navigate complex trade-offs - without resorting to soft metrics or vague commitments. And in doing so, they get something rare: clarity on where to focus leadership attention for strategic gain.

Increasingly, this is not optional

Financial institutions, partners, customers, and regulators are aligning fast. Companies that can't articulate how their business models impact the world - or are impacted by it - will lose credibility, access, and market position.

By 2027, ESG due diligence will be a default part of doing business in most global supply chains. And despite a few setbacks posed by the recent EU Omnibus proposal, the Corporate Sustainability Reporting Directive (CSRD) continues to roll out. 

The organisations using double materiality to its full potential aren’t waiting for mandates and they’re not doing it for optics. They’re embedding sustainability into strategy, because they know that’s where future value lies - through a clear lens of long-term impact, risk and opportunity.

The companies that embrace double materiality now will be ahead on data, on disclosures, AND on strategy.

Confidently know what matters most

One of the most dangerous assumptions in business today is that you already know what matters.

Double materiality challenges that assumption. It reveals what’s material in ways that your financial model alone can’t. And it ensures your strategy is built not just on what’s profitable, but on what’s durable.

The future of business leadership lies in understanding where sustainability and performance intersect. That’s why at Drova, we’re offering a free personalised Sustainability & Business Strategy Report - your first stepping stone to a comprehensive Double Materiality Assessment. 

Powered by AI and data from MSCI, GRI, SASB and ESRS, the report focuses on the sustainability topics most relevant to your company's size, industry, and location. Cover areas of risk and opportunity, including potential ROI improvements, benchmark against peers, and make informed decisions for long-term value creation.

Request your free Sustainability & Business Strategy Report below.

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