Integrating Double Materiality Into the Criteria of European Sustainable Finance Labels

Nathalie Lévy () and Derick Moukoumia
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Nathalie Lévy: IRJI - Institut de recherche juridique interdisciplinaire - UT - Université de Tours
Derick Moukoumia: Derick Patrimoine

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Abstract: The integration of double materiality—combining financial and impact perspectives—has become pivotal in the European regulatory framework for sustainable finance labels (SFDR, CSRD, Taxonomy). Yet, its operational implementation remains inconsistent due to divergent national approaches, conceptual ambiguities, and a lack of standardization. This systematic review analyses how impact measurement mechanisms—such as Principal Adverse Impacts (PAI), green share, and sectoral exclusions—are applied, and highlights risks linked to regulatory fragmentation, transparency gaps, and comparability challenges. The findings reveal significant heterogeneity affecting the credibility and effectiveness of these labels. Reinforcing harmonization, standardized criteria, and oversight is recommended to ensure double materiality is meaningfully embedded in sustainable finance labeling. This study offers a valuable framework for policymakers, researchers, and practitioners working to strengthen the role of labels in supporting the transition to a sustainable economy.

Date: 2025-08-01
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Published in Rosella Carè. Social and Sustainable Finance for Social Innovation and Sustainable Development Goals (SDGs), IGI Global Scientific Publishing, pp.263-284, 2025, ⟨10.4018/979-8-3693-9551-6.ch009⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05268263

DOI: 10.4018/979-8-3693-9551-6.ch009

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