The evolution of sustainability reporting demands increased transparency and scope. A pivotal aspect of this process is the determination of materiality for disclosure. The European Union, through its latest enactment, the European Sustainability Reporting Standards (ESRS), has refined the interpretation of materiality criteria. This regulatory development motivates this study, which aims to explore the implications of the double materiality assessment (DMA). Specifically, investigating how the DMA is strategically utilized and if the generated output could lead to change in companies’ governance, operations, and practices. 

To investigate this, the study examines eight Swedish companies across various industries, among the early adopters of ESRS. These companies serve as the focal point of the case study, utilizing a qualitative research approach where insights are derived from semi-structured interviews with key representatives of these firms. A conceptual framework, drawing from dynamic capabilities and institutional theory, help identifying patterns and themes related to dynamic skills and isomorphic tendencies. 

The study reveals how the DMA shapes companies’ sustainability focus and operations. It enhances internal and external discussions, promotes sustainability awareness among colleagues, and facilitates knowledge sharing. The DMA emphasizes supplier transparency, fosters stakeholder engagement, and influences sustainability strategies, leading to organizational restructuring. Additionally, the study highlights the reliance on external consultants for DMA execution, reflecting resource constraints or regulatory complexity. Professional audits expedite compliance efforts but raise concerns about internal resource adequacy for sustainability reporting practices amidst new disclosure mandates.