[Research Contribution] Double Materiality in Sustainability Reporting: A Comparison of International Standards and Policy Implications for Vietnam
12 September, 2026
Keywords: Double Materiality, sustainability reporting, ESG in the energy sector, Scope 3 emissions, ESRS.
Amid the ongoing energy transition and increasingly stringent sustainability standards, companies are expected not only to recognize how climate change may affect their business operations, but also to be transparent about the impacts their own activities have on the environment and society. The principle of Double Materiality is therefore becoming an increasingly important element of international sustainability reporting standards, particularly in the energy sector.
Against this backdrop, a research team from UEH Mekong, University of Economics Ho Chi Minh City (UEH) analyzed and compared the sustainability reporting practices of four domestic energy companies with those of Shell. The study identifies differences in approaches to Double Materiality and proposes policy implications and a practical roadmap for Vietnamese companies as they integrate into international markets and seek access to global green finance.
From Energy Transition to Growing Demands for Transparency
The world is entering a historic era of energy transition, as traditional fossil fuels face growing pressure from emissions-reduction requirements and sustainability goals. As international sustainability reporting standards become more widely adopted, energy companies are expected not only to identify sustainability-related risks and opportunities that may affect their operations, but also to be transparent about the impacts their activities have on the environment and society.
For Vietnam, this presents a significant challenge: the country must simultaneously ensure energy security while working toward its commitment to achieve Net Zero emissions by 2050. In this context, sustainability reports that rely primarily on qualitative descriptions and narrative disclosures are no longer sufficient to meet the increasingly demanding expectations of markets and financial institutions. This provides an important basis for the study to examine the principle of Double Materiality and identify the gap between current practices among Vietnamese companies and international standards.
“Double Materiality” – A New Standard for Sustainability Transparency
Double Materiality requires companies to consider two dimensions of materiality simultaneously: how environmental and social issues may create financial risks and opportunities for a company, and how the company’s activities impact the environment and society. The study compares three major reporting frameworks GRI, ESRS, and IFRS (ISSB) and finds that each has a different focus, ranging from impact materiality and double materiality to financial information designed to meet investors’ needs.
Building on this comparison, the authors examine the disclosure practices of Shell and four Vietnamese energy companies: PVN, PV Drilling, BSR, and Petrolimex. The findings indicate that the gap extends beyond information disclosure to include data capabilities, technology, and risk management perspectives. While Shell has integrated Double Materiality assessments into risk management and asset valuation, Vietnamese companies still face limitations in determining material topics, collecting Scope 3 emissions data, and conducting meaningful stakeholder engagement. Nevertheless, developments at PV Drilling, BSR, and Petrolimex demonstrate that domestic companies have begun making notable progress toward green transformation and more standardized sustainability reporting.
From Gaps to Emerging Highlights in the Green Transition
Vietnamese practices show that the gap with international standards does not necessarily mean that domestic companies lack the capacity to transform. Several practices already demonstrate the potential to connect sustainability management with business performance. For example, PV Drilling achieved a 1.71% reduction in total greenhouse gas emissions through technological solutions, reduced diesel oil (DO) consumption by 13.4%, and maintained 15 consecutive years without a Lost Time Injury (Zero LTI) at the PV DRILLING II rig. BSR and Petrolimex have also taken initial steps toward standardizing sustainability disclosures in accordance with GRI. Petrolimex, in particular, has integrated climate adaptation and oil spill management into its risk management practices.
These results demonstrate that Double Materiality can extend beyond the scope of a reporting requirement to become a management tool that helps companies identify risks, optimize resources, and strengthen competitiveness throughout the green transition.
Advancing Double Materiality in Vietnam’s Energy Sector
To narrow the gap with international standards, Vietnamese energy companies need to move from a reactive approach to disclosure toward a structured implementation roadmap. First, companies should develop an inventory of risks, impacts, and opportunities (IROs) and establish a data-driven Double Materiality matrix based on meaningful stakeholder engagement. Quantifying risks such as carbon taxes, the Carbon Border Adjustment Mechanism (CBAM), and potential asset impairment can reduce the materiality assessment’s reliance on subjective judgment.
Next, the results of the Double Materiality assessment should be directly linked to business strategies and key performance indicators (KPIs). Material topics should be translated into measurable indicators, such as CO₂ emissions intensity per ton of product, the share of renewable energy, the rate of serious occupational accidents, or investment in green technologies. In this way, sustainability reporting would no longer be an end-of-period disclosure exercise, but an integral part of corporate management.
Finally, companies should gradually develop independent assurance capabilities by standardizing data infrastructure and strengthening third-party verification. This not only improves the accuracy of ESG information, but also reduces information asymmetry, strengthens confidence in financial markets, and improves access to international green finance.
At the macro level, this transition also requires a coordinated supporting ecosystem. Regulatory authorities should gradually develop clearer reporting roadmaps and technical guidance on sustainability reporting, Scope 3 emissions, and asset risk management. Professional associations can contribute through training, tool development, and support for companies in managing non-financial data. Meanwhile, higher education and research institutions should integrate knowledge of CSRD, ESRS, and Double Materiality into their curricula while strengthening research based on real-world case studies.
Overall, the study shows that “Double Materiality” is not merely a new requirement for sustainability reporting; it can also become a management tool that helps companies identify risks, quantify impacts, enhance transparency, and strengthen competitiveness throughout the green transition. For Vietnam, narrowing the gaps in data, technology, and governance will be an important step toward enabling energy companies not only to meet international standards, but also to take a more proactive approach to accessing green finance and participating more deeply in the global energy transition.
View the full research paper “Double Materiality in Sustainability Reporting: A Comparison of International Standards and Policy Implications for Vietnam” HERE.
Authors: Dr. Lam Thi Truc Linh, Nguyen Hong Nga, Nguyen Ngoc Tho – University of Economics Ho Chi Minh City (UEH)
This article is part of the series disseminating research and applied knowledge under the message “For a More Sustainable Mekong,” within the “Research Contribution For All” program conducted by UEH. UEH respectfully invites readers to stay tuned for the next edition of the UEH Research Insights newsletter.
News, photos: Authors, Department of Admissions – Communications UEH Mekong, Department of Communications and Partnerships UEH
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