In the context of Corporate Sustainability Reporting Directive (CSRD), stakeholder engagement is essential to Double Materiality Assessment (DMA) as it provides valuable insights into the environmental and social impacts most significant to those affected by your organisation’s activities. While the European Sustainability Reporting Standards (ESRS) created under CSRD do not prescribe a specific framework for stakeholder engagement, transparency in consulting stakeholders and integrating their feedback into the DMA is strongly encouraged.
Step 1: Identifying and prioritising stakeholders
Identify affected stakeholders (Impact materiality)
Include stakeholders impacted by the organisation's operations across the entire value chain, including employees, management, and all external parties involved. This covers the full lifecycle of the organisation's products and services, focusing on both upstream activities (e.g., suppliers and resource providers contributing inputs) and downstream activities (e.g., distribution, customer use, and recycling or disposal). Additionally, consider the financial, geographical, and regulatory environments that shape these relationships.Identify users of sustainability statements (Financial materiality)
Include primary users of the organisation’s sustainability reporting. This may include stakeholders who use sustainability data for financial or decision-making purposes such as investors, lenders, credit institutions, insurance undertakings and other users of sustainability statements, including trade unions NGOs, governments and academics.
Step 2: Methods of engagement
Leverage existing insights
Utilise existing reports, research or surveys if available. This may include internal documentation such as impact and risk assessments, as well as external sources like sector reports and sustainability benchmarks.If existing information is insufficient, consider further engagement with stakeholders
Direct engagement
Conduct surveys or interviews if direct insights from stakeholder is valuable.
Example: Distribute surveys to customers for insights on product safety.Indirect engagement
Engage independent experts, NGOs, or scientific studies when direct engagement is challenging.
Example: Use biodiversity studies to assess nature as a silent stakeholder.
Step 3: Collecting and analysing information
Mapping stakeholders
Categorise stakeholders based on how they are affected differently by activities, products or services. They should be weighted by how affected they are for a sustainability matter. For example, the organisation may prioritise voice of local communities in water-stressed areas affected by water-intensive operations.Collect data:
Impact assessment: Collect feedback to understand concerns about actual and potential impacts of the organisation on people and the environment.
Financial relevance: Determine how sustainability matters create risks or opportunities impacting financial outcomes.
Note: Repeat this exercise as the business context and sustainability environment evolve, considering new regulations, divestments, acquisitions, and business expansions.