Double Materiality Assessment

Höegh Autoliners has conducted a double materiality assessment ensuring its corporate strategy remains robust and resilient against the increasing focus on sustainability.

Mapping our material topics to corresponding ESRS topical standard

Höegh Autoliners material topicsESRS Topical standards
Climate changeClimate change (E1)
PollutionPollution (E2)
Biodiversity and ecosystemsBiodiversity and ecosystems (E4)
Waste and green ship recyclingResource use and circular economy (E5)
Health and safetyOwn workforce (S1)
Workers in the value chain (S2)
EmploymentOwn workforce (S1)
Workers in the value chain (S2)
Human and labour rightsOwn workforce (S1)
Workers in the value chain (S2)
Diversity and inclusionOwn workforce (S1)
Business conduct and corporate cultureBusiness conduct (G1)


For this year’s reporting, Höegh Autoliners has improved its double materiality assessment methodology, building on the assessment conducted in 2022. This was done in preparation for the next year’s reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD) and guided by the European Sustainability Reporting Standards (ESRSes). The assessment focuses on both the company’s impact on the environment and society, and the external sustainability-related risks and opportunities to the business. The 2023 reporting includes improvements in both the assessments of impact and financial materiality, as introduced by the ESRSes.

We have conducted stakeholder engagement with a broad group of stakeholders, both internal and external, to identify impacts, risks, and opportunities (IROs) across our value chain. To the extent possible, and to the best of our knowledge, we have quantified the IROs and enriched them with qualitative assessments to reasonably score and prioritise them. We believe that our methodology, adjusted to meet the requirements set out by the ESRSes, and the results presented below accurately represent our identified impacts, risks, and opportunities.

What is a double materiality assessment?

In prior year’s materiality assessment, the focus has been on the impact materiality, meaning how an organisation is impacting the environment and the society. This could be negative impacts on climate change, or human rights and decent working conditions. IT could also be positive impacts through active work against anti-corruption in our supply chain. A double materiality approach includes the perspective of financial materiality, meaning the risks and opportunities from sustainability-related topics and events. This could be reputational risk caused by incidents or corruption, financial risks from implementation of new carbon taxes, or opportunities arising through development of sustainable shipping-services.

1. Financial materiality
A sustainability topic is material from a financial perspective if it triggers financial effects on organisations, ie., generates risks or opportunities that influence, or are likely to influence, the future cash flows and therefore, the organisation's enterprise value in the short, medium or long term, but are not captured by financial reporting at the reporting date.

2. Impact materiality
A sustainability topic is material from an impact perspective if the organisation is connected to actual or potential significant impacts on people or the environment and is related to the sustainability topic over the short, medium or long term. This includes impacts directly caused or contributed to by the undertaking and impacts which are otherwise directly linked to the undertaking's value chain.

Process steps

Our 2023 assessment have been improved compared to prior year’s assessments. The process has been more formalised and a larger number stakeholders have been included. The following steps were conducted:


1. Mapping our value chain and establish longlist of ESG topics

Our starting point has been to map our value chain to help us identify key areas and activities that contribute to our environmental and social footprint. Through this mapping exercise, complemented by industry practice, media, and prevailing global sustainability reporting standards, we established a longlist of ESG topics that are relevant to our business operations, serving as a starting point for the identification of material topics.

2. Identifying important stakeholders and conduct stakeholder engagement

We acknowledge the importance of engaging with our stakeholders to gain insights into their expectations, concerns, and interests. We identify key stakeholders across our value chain, including internal stakeholders, customers, suppliers, investors, and regulators. Through stakeholder engagement activities such as interviews, workshops, and day-to-day discussions, we seek to understand their perspectives on sustainability impacts, risks and opportunities related to our organisation. In addition, we want to gather feedback on our current performance, and get insights to what is expected of a shipping company for the future.

3. Identifying impacts, financial risks, and opportunities

Building on insights gathered from our stakeholders, we identify actual and potential impacts to environment and society. This also includes the identification of financial risks and opportunities associated with sustainability-related development and events. Our aim has been to understand the magnitude and significance of these impacts, risks and opportunities on our business and our stakeholders.

4. Assessing and prioritising topics.

Impacts, risks, and opportunities identified are assessed and prioritised guided by the criteria set out in the ESRSes, and the assessment is disaggregated on a specific impact, risk, or opportunity level. For positive and negative impacts, scale, scope, likelihood, and level of irremediability(for negative impacts only) are considered. For risks and opportunities, financial magnitude and likelihood of occurrence are considered.

5. Validating and concluding on material topics.

Consolidated results of the double materiality assessment have been presented to and discussed with internal stakeholders and management.

Output from our double materiality assessment


The results of the double materiality assessment highlight the areas where Höegh Autoliners is impacting the environment and society (impact materiality assessment) and where the organisation is exposed to sustainability-related risks and opportunities (financial materiality assessment). The results from this year’s assessment are all over in line with last year’s assessment. Topics standing out as the most important are climate change, own workforce, and business conduct. Other material topics are pollution, resource use and circular economy, biodiversity and ecosystems, and workers in the value chain.

Limitations and way forward

For this year’s reporting, we are only reporting aggregated results of our assessment illustrating topics concluded to be material for our organisation. Presentation and reporting on a sub-topic and IRO level will be introduced in our next year’s reporting, aligned with the disclosure requirements set out in the ESRSes. The structure of this report reflects the results of this year’s DMA and the topical structure of the ESRSes, however, the disclosure requirements follow the GRI guidelines.

Methodology and approach to double materiality assessment


Approach and assumptions

Scope and boundary of our assessment

The boundary of our assessment is set to cover the full value chain (where information of the value chain has been available), with a focus on our own operations and our first-tier suppliers. On the impact side, actual and potential negative impacts, as well actual and potential positive impacts are included within the boundaries of the assessment. The same applies for the financial risks and opportunities on the financial side.

ImpactsRisks and opportunities
To score the impacts on environment and society, we have applied the parameters described in the ESRS guidance: Scale, scope and irremediable character.To score the risks and opportunities for our business, we have applied the parameters described in the ESRS guidance: Financial consequence and likelihood.
1. In the scoring process of the scale, we have assessed the magnitude of the impact on the environment or society. Scale was scored as low, medium or high.1. In the scoring process of the Financial consequence, we have assessed the potential financial magnitude of financial metrics (such as revenues, OPEX, Capex) in case the risk or opportunity materialize. Financial consequence has been scored using low, medium and high.
2. In the scoring process of the scope, we have assessed the extent of the impact using indicators such as affected geographical areas, number of employees etc. Scope was scored as limited, medium or global.2. Likelihood has been applied to capture how likely it is that the financial consequence will take place.
3. In the scoring process of the irremediable character, we have assessed the complexity of reversing the damage in terms of time frame and cost. This parameter is applicable for negative impacts only. Irremediability has been scored as easy to remediate, difficult/costly to remediate, or irreversible.
For potential impacts, the parameter likelihood has been applied to capture how likely it is that the impact will take place.
Likelihood has been scored from 1 to 5 (1 = remote, 2 = unlikely, 3 = likely, 4 = highly likely, 5 = near certain)

Time frames and scenarios

Time frames have been applied for both impacts, risks, and opportunities. We have used short-, mid- and long-term as guided by the ESRSes. Short-term is defined as 0-3 years, medium term is defined as 3-10 years and long-term is defined as more than 10 years.

Timeframes chosen for the double materiality assessment are based on Höegh Autoliners’ corporate strategy, and financial budget period to ensure comparability between strategic periods and sustainability assessments. The rational builds on the longer cycles in the shipping sector, internal strategy and sustainability initiatives and a medium-term target by 2030. Höegh Autoliners also operates an asset base with expected lifetime of 30 years.


In addition to our quantitative assessment in our scoring process, we have also conducted qualitative assessments where IROs have been difficult, or impossible to score. This approach have resulted in a score for each IRO. Whether a sustainability topic is considered material or not, depends on its highest scored IRO for that specific topic. In addition, the risk of a topic becoming material due to aggregation of low-scoring IROs, is assessed.

The threshold for determining whether a sustainability topic is material for our organisation has been set at “important”. All topics scored as “important”, “significant” or “critical”, either from an impact perspective, a financial perspective or both, are considered material.

Definition of thresholds

IROs that are unlikely to occur, and if they do occur, they will have a small impact or present minimal risk/opportunity. These IROs are typically of low priority and may not require immediate attention or extensive resources to address.

IROs that provide informative information or insights for understanding and managing IROs within the organisation. While not important, critical or significant, these objectives contribute to the overall risk management process and help stakeholders make informed decisions.

IROs that have a notable impact on the organisation’s operations, financial performance, reputation, or compliance with regulations. Addressing and managing these IROs is essential for achieving strategic objectives and maintaining stakeholder confidence.

IROs that can significantly affect the organisation’s ability to achieve its goals, sustain its operations, or meet stakeholder expectations. Managing these risks effectively is critical for safeguarding the organisation’s value and long-term success.

IROs that pose a severe threat or offer significant potential for the organisation. Addressing and mitigating these risks are paramount for ensuring business continuity, protecting stakeholder interests, and preserving the organisation’s reputation and viability.

Stakeholder engagement overview

In this year’s double materiality assessment, we have engaged with a larger group of stakeholders than we did in prior year’s assessments. Internal stakeholders have included board members, C-level individuals, internal subject-matter experts and employees. External stakeholders have included customers, investors, financial institutions, NGOs and consultants. Engagements have included workshops, interviews, one-to-one discussions, meetings and reviews.

Our internal stakeholder engagement policy emphasises active engagement and understanding of stakeholders’ positions and expectations. This ongoing dialogue shapes our sustainability efforts and processes and aligns with stakeholders’ interests. Insights from these engagements inform our business model and strategy, due diligence processes and the double materiality assessment, guided by international norms and codes.

In 2023, Höegh Autoliners engaged in several policy debates related to sustainable shipping. COP28 was one of the arenas where the Company’s CEO Andreas Enger was present and formed part of plenaries, panels and roundtable discussions around our vision for the future of shipping, and how we can contribute to decarbonise international shipping if we are able to create a level playing field with appropriate incentives for the uptake of greener fuel technologies.

Customers seek deeper partnerships to meet their decarbonisation commitments, driven by ambitious target setting and net-zero roadmaps, and compliance with increased regulation and reporting requirements. Our continuous discussions with the customers, and understanding their needs are crucial for our decarbonisation strategy to succeed.

Please refer to the table below for an overview of our key stakeholders, engagements and outcomes.

Key stakeholdersHow we engageWhy we engageExamples of outcomes from engagements
CustomersCustomer support and discussions in day-to-day operationsUnderstand our customers' expectations and requirements
Strategic partnerships for our segment leading green service offerings

Development of solutions serving customer expectations and requirements
Tender processes and contract renewalsProvide green and sustainable solutions to assist decarbonization of their supply chainsLonger contracts with customers sharing our business philosophy
Sanctions screeningRisk management, reputational protection and ensure compliance with laws and regualtionsBusiness relationships with responsible counterparties

Informed selection of customers
Customer's ESG questionnairesUnderstand our customers' expectations and requirements
Updated policies and procedures
SuppliersDiscussions through day-to-day operations
Understanding our suppliers sustainability impacts
Sustainable sourcing of goods and services
Supplier questionnaires and on-site due diligence assessmentsEnsure compliance with our code code of conduct throughout our supply chain
Sanctions screeningRisk management, reputational protection and ensure compliance with laws and regualtionsInformed selection of suppliers
EmployeesActive engagement through the working environment committee (AMU) and communication through internal channels
Understand employees expectations and requirementsAction plans, improved working environment and updated internal policies adn procedures
Yearly engagement surveysDetect improvement areas
Traning and upskillingProvide our employees with necessary knowledge and understanding
Financial community
Investors, analysts, banks, insuranceRegular investor updatesBuild credibility and showcase our strategy and performanceImproved sustainability communication in all sources
Annual and interim reportingKeep new and existing investors updated on performance and plans
Investor meetings, presentations and roadshowsUnderstand expectations and requirementsA robust strategy to meet investors expectations
ESG ratingsPromote transparency towards external stakeholdersGap analysis and plans to improve current ESG ratings
Governments, regulators and International policy makersDialouge with governments and policy makersIdentify and address climate-related transition risks and opportunitiesSet our decarbonisation strategy and plans on the agenda
Regulatory tracking and analysisEnsure compliance within operations and reportingResilient business model and strategy
MediaRegular external communication in several channelsInform and build trust among stakeholdersGood reputation among stakeholders
Industry and sustainability associationsDirect dialouge with industry and sustainability associationsAssist the industry to engage policymakers
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As a shipping company operating worldwide, we need to take responsibility for the environment we operate in. Our strategy is shaped to best meet our commitments and to assist decarbonising our customers supply-chains.