The double materiality perspective in the circular economy

The concept of double materiality has become a foundational principle in contemporary sustainability reporting, integrating both the inside-out perspective – an organization’s impacts on environmental, social, and economic systems – and the outside-in perspective, which captures how environmental, social, and governance (ESG) factors influence financial performance. Within the context of the circular economy and international goods trade, particularly in fintech-enabled supply chains, this study develops a structured double materiality factor framework. Employing a mixed-methods approach that combines conceptual literature analysis, empirical data review, and an assessment of key regulatory frameworks (CSRD, ESRS, SFDR, and the EU Taxonomy), the research identifies critical ESG impact pathways and financial risk channels relevant to circular value chains. The proposed framework supports companies in systematically evaluating sustainability impacts, integrating resource efficiency, emission reduction, and waste minimization into strategic decision-making. It also highlights the regulatory and strategic advantages of adopting a double materiality perspective, strengthening transparency, stakeholder trust, and compliance with emerging sustainability standards. The findings provide both theoretical insights and practical guidance for aligning sustainability performance with financial resilience in circular goods trade supply chains.