1.4. The Double Materiality Assessment
The process and methodology
The double materiality assessment (DMA) identifies which sustainability topics are material for Exor and the
subsequent sustainability disclosures that will be reported in line with the ESRS standards. Topics are deemed
material if they exceed a threshold in terms of impact and/or financial materiality.
Exor’s materiality assessment was conducted through a comprehensive process that aimed to identify, assess
and prioritise both potential and actual impacts on people and the environment (inside-out approach), as well as
risks and opportunities that may in turn have a financial effect on the company (outside-in approach).
The DMA was carried out with a systematic process starting with a regulatory context analysis to outline how to
apply CSRD reporting to an investment entity. Then a benchmark analysis was conducted on peers and best
practitioners in order to identify the main themes applicable to Exor as an investor. Focus was also given to
assessing Exor's value chain through its activities, geographies, business relationships and its main
stakeholders such as its investee companies.
Based on these results, a list of potential relevant impacts, risks and opportunities (IROs) for Exor’s own
operations and value chain were identified. As Exor is an investment entity, its own operations refer to Exor and
its subsidiaries that provide investment-related support services, which is consistent with the Company's
financial reporting. For value chain operations, the focus of the DMA was mainly on the downstream value chain
related to Exor's investee companies arising from Exor's role as an investment entity. The downstream value
chain relates only to the investee company and not the value chains of the investee companies themselves. The
upstream value chain activities, as described above, were deemed irrelevant from a materiality perspective and
therefore excluded.
With regard to the identification process of IROs for the downstream value chain, it is important to note that the
approach considered Exor's role as an investor in the investees, in line with its investment entity status. Exor
has screened and analysed the business activities, operations and sectors of its main investee companies in
order to identify actual and potential impacts, risks and opportunities in its downstream value chain, in particular
related to climate change, pollution, water resource, biodiversity, circular economy and governance. Investee
companies were analysed by sector.
Where applicable, primary sources of information were used from investee companies, who had already
performed their own DMAs. In particular, the results of the DMAs from the five largest public investee
companies that represented 77% of the total GAV at 31 December 2024 were analysed and taken as primary
data. This primary data covered the following ESRS sectors: Motor Vehicles and Medical Instruments. For the
remaining sectors in the portfolio where primary information was not available (Recreation and Leisure, Textiles,
Accessories, Footwear and Jewellery and Information Technology), IROs were selected based on what was
assessed from SASB and MSCI Materiality Matrix. Thus, given Exor's large portfolio, it is clear that Exor has not
directly performed technical analysis on environmental and governance impacts, risks and opportunities at
investee level, except from climate change, however it relied on primary sources from the main investee
companies and from sector data. Please find information on the assessment of climate risks and opportunities in
section 2.2 Emissions reduction and climate change.
Risks and opportunities were identified starting from impacts and dependencies on resources and relationships,
and in line with Exor's risk assessment and prior year TCFD reports.
When assessing impact materiality, Exor addressed actual and potential negative impacts based on an average
scoring of their scale, scope and irremediable character multiplied by likelihood. In the specific case of potential
negative impacts on human rights, the scale was weighted as a more important factor than likelihood. For
positive impacts, Exor used an average scoring of their scale and scope multiplied by likelihood.
When assessing financial materiality, Exor addressed likelihood, magnitude (including the nature of the financial
effects of the identified risks and opportunities), in line with the methodology and assessment used in Exor’s risk
assessment and prior year TCFD reports. In performing the overall risk assessment sustainability-related risks
were evaluated in the same manner as other risks to which Exor is exposed without giving a higher level of
priority. Exor's risk assessment does not yet integrate all of the risks identified in the DMA process, however in
the future an alignment exercise will be conducted. For further information see Risk Management - Key Risks
and Key Trends.
