A guest article by Lutz Hammer, architecture enthusiast and managing director of RECKLI GmbH, who carried out a double materiality analysis with Code Gaia.

You can watch Lutz Hammer’s detailed interview with our sustainability expert Leonie Stumpf by clicking on the button.

Contents

• RECKLI’s path to CSRD compliance
• Our first steps in CSRD reporting
• Our path to double materiality with Code Gaia
• The workshops focus on practice
• Stakeholder analysis with Code Gaia
• Stakeholder feedback & response rate
• Recognizing risks and exploiting opportunities
• Consolidated CSRD reporting
• Support from the Code Gaia module
• What I tell other companies
• CSRD as an opportunity and an ongoing process

RECKLI’s path to CSRD compliance

RECKLI manufactures elastic molds for the design of exposed concrete. Our field of activity includes the production of plastic molds for architectural projects.

As the sustainability aspect of the two building materials – concrete and plastic – is often a challenge, we have been working intensively on this topic for some time, both from a social responsibility and an economic perspective. Even if we do not work directly with concrete, we consider this building material when it comes to sustainability, as it is part of our value chain. It is our firmly established goal to make our products and their use more sustainable.

The topic of CSRD/ESRS and thus the double materiality analysis is relevant for us at RECKLI, on the one hand because we feel intrinsically obliged to do so, but also because we are subject to the sustainability reporting obligation. Like many medium-sized companies, we have limited resources and time and were initially somewhat overwhelmed by the complex legislation.

However, it can be a great opportunity to take a closer look at this topic. In this post, I would like to share my insights and describe how we are currently implementing the double materiality process with Code Gaia as a first step towards CSRD compliance.

Our first steps in CSRD reporting

RECKLI employs just under 130 people at the Herne site, while we are represented in five production facilities worldwide, from Dubai to Australia and the USA. Rodenberg AG, our sister company that manufactures door panels, has an even larger workforce in Germany. Despite this complexity, we consolidate and report our data jointly.

We have a special working group that deals with the topic of sustainability on a regular basis. As our resources are limited, it was a challenge to deal with this topic for the first time. There were concerns about how we should approach it, especially as we do not come from this area and do not have a specialized sustainability department. So we got together within the holding structure and looked at the ESRS guidelines together. It was overwhelming to figure out where to start and what was really important for us.

Our path to dual materiality with Code Gaia

It was clear to us from the beginning that we would need support with the double materiality analysis, as there was no one who already had experience in this area. The individual aspects of production, financial risks, HR, etc. are so deeply rooted in our company that we couldn’t just send someone out to deal with them. It was a real challenge to figure out what was expected of us and how best to proceed. So we chose Code Gaia, with whom we have already completed the third workshop on double materiality. The graphic below illustrates the process of double materiality analysis with Code Gaia, which is described in detail in this blog post .

Focus on practice in the workshops on dual materiality

It was crucial for us to be able to put the theory of double materiality into practice by providing us with clear guidelines. That’s why I think it’s important for workshops to have a clear, practical focus. What we really liked about the workshops with Code Gaia was that we were first given a brief theoretical introduction and then quickly moved from theory to practical implementation.

How we mastered the stakeholder analysis with Code Gaia

First, we specifically identified the stakeholders and assigned them clear contact details to ensure that we collected all relevant information. It was interesting to realize how many stakeholders there actually are and how important it is to consider them all in the process of identifying key stakeholders

Once we had identified the stakeholders, it was a question of how we could involve them. It was not necessary to survey all stakeholders, but we were able to make a representative selection. For example, we selected 10 architecture firms and sent them a survey to get their perspectives. This gave us feedback on which aspects seemed important to them.

After the workshop, we knew exactly who was looking after which stakeholders and how we could involve them. This gave us the confidence that we had completed an important step and reached milestones. It was a very good and reassuring feeling to see our progress in black and white and to achieve concrete results.

Stakeholder feedback as an important contribution to improving sustainability and quality

If I am identified as a stakeholder in a particular area and asked for my feedback, I can select the points that are relevant to me and explain why they are important, for example sustainable or environmentally friendly products.

It is important to emphasize that participants are not limited to selecting just one point. If they take the time, they can identify several relevant points. This is particularly interesting as often points come up that have not been considered before but are still important.

How to improve the response rate

Stakeholders are under no obligation to provide detailed answers. However, if you have stakeholders or suppliers that you work closely with, you can of course contact them directly and ask for their participation. For example, I can call the architecture firm or talk to a client with whom I have a good relationship and explain that we are currently working intensively on this topic and ask them to do us a favor by completing the survey. They may not know exactly what it’s about on a day-to-day basis, so it would be helpful to briefly explain what it’s about and how their participation can help improve the sustainability and quality of our products.

Identifying risks and exploiting opportunities through the double materiality analysis

We recognized from the outset that sustainability reporting is not only a necessity, but also an opportunity for us to address the relevant issues.

Of course, we deal with the concrete economic aspects on a daily basis, such as the impact of rising interest rates on the construction industry. But there are also many more subtle factors that have a major impact on our company and ultimately turn risks into opportunities.

A good example of this is our product relating to the shaping of concrete. Even though we do not produce concrete ourselves, but only supply the molds for it, we can still be affected by developments in the concrete sector. For example, if architects increasingly opt for alternative building materials such as wood and avoid concrete, this could have an impact on our customer base.

Another risk is the possibility of legal changes or decrees that could restrict or ban certain building materials. If, for example, concrete façades were no longer permitted, this would have a direct impact on our business. We are aware of these risks and see them every day in our working environment.

It is important to recognize that industries and consumer habits can change constantly. A good example of this is the food industry, as can be seen from the example of a well-known German meat producer. Changes in food trends or social debates can have a direct impact on the business. It is therefore crucial to identify these risks and exploit potential opportunities, such as diversifying the product portfolio – in this case to include vegan or vegetarian meat substitutes.

Our approach is not only to identify risks, but also to exploit the associated opportunities in order to make our company more resilient and fit for the future.

What you should consider in consolidated CSRD reporting

It is challenging to deal with the different processes and requirements in our two companies, Rodenberg and RECKLI. Especially when it comes to different target groups and business areas, it can be difficult to find a common denominator while taking into account the specific needs of each company.

However, it was very helpful that we conducted the workshops on dual materiality together. This enabled us to identify relevant topics and develop solutions together. The switch from the workshops to the dual materiality module at the beginning of April further supported this process. The module offers a structured and guided approach, similar to booking a flight or answering questionnaires, where the steps are predetermined and you simply follow them.

How the Code Gaia module for double materiality analysis supported us

It was particularly useful to see how the module distinguishes between national and international impacts and identifies relevant points. This made the double materiality analysis process more efficient and transparent. We were able to focus on the important aspects and were supported by the module without having to worry about every detail ourselves.

It was a great relief for all of us to use the module and thereby bring clarity and structure to the reporting process. Ultimately, the aim is to ensure that we are all guided through the process of double materiality from A to Z and can produce a meaningful report at the end.

What I would say to other companies that are now facing the process of double materiality analysis

It’s really important not to worry and not to be overwhelmed by the complexity. The sustainability experts at Code Gaia did a great job of taking a step-by-step approach to the process and holding intensive workshops. They broke down the information into small, digestible bites and approached the topic with us bit by bit, which was really helpful.

Companies should also address the issue at an early stage and set the right course internally to turn employees from those affected into stakeholders. We have already done a lot of internal research and discussion, but it was important to document and structure this process with Code Gaia to ensure that we are all on the right track.

Understanding CSRD as an opportunity and an ongoing process

For smaller companies, it is particularly important to see this opportunity as a chance to address the issues that matter to every business. It’s not just about complying with EU regulations, but also about building business strength and resilience. It’s an opportunity to give businesses an insight and motivate them to look at the opportunities and risks arising from this new directive.

The reporting process should be seen as an ongoing one that is adapted and updated over time. Once we have a solid foundation, it will be easier to update and adapt the report in subsequent years, even if the EU directives change. Using a software-based tool allows us to react flexibly to changes and simplify the process. Although it takes time and commitment to familiarize yourself with the topic, it ultimately brings more benefits to the company in the long term.