Key Points
- Engagement feeds directly into the double materiality assessment and must cover both affected stakeholders and users of the sustainability statement.
- ESRS 2 SBM-2 requires disclosure of which stakeholder categories were engaged, how engagement was organised, its purpose, and how the results informed strategy.
- Auditors will assure the materiality assessment process, including the documented evidence of stakeholder consultation that underpins it.
- Wave 1 reporters (large public interest entities) disclosed stakeholder engagement for the first time in their FY 2024 sustainability statements published in 2025.
What is Stakeholder Engagement?
ESRS 1.22 splits stakeholders into two groups: affected stakeholders (individuals or groups whose interests are affected by the undertaking's activities across its value chain) and users of the sustainability statement (investors, lenders, trade unions, NGOs). Some parties fall into both categories. ESRS 1.24 anchors engagement to the undertaking's ongoing due diligence process, making it an input to the IRO assessment rather than a standalone exercise.
The disclosure sits in ESRS 2 SBM-2 (paragraphs 43–45). The undertaking must describe its key stakeholders, state whether engagement occurred for each category, explain how it was organised, and set out its purpose. It must also disclose how the views collected informed its strategy and business model, and whether the administrative or supervisory body received reporting on those views.
The process is not optional window-dressing. Because the double materiality assessment determines which ESRS topical standards an undertaking reports against, the quality of stakeholder engagement directly shapes the scope of the entire sustainability statement. Weak engagement produces a weak materiality conclusion, and auditors performing limited assurance on the sustainability statement will test whether the process was conducted with sufficient rigour.
Worked example: Rossi Alimentari S.p.A.
Client: Italian food production company, FY 2025, revenue EUR 67M, IFRS reporter, first-time CSRD reporter. Rossi operates three processing plants in northern Italy and sources raw materials from approximately 120 agricultural suppliers across Italy and Spain.
Step 1 — Identify stakeholder categories
Rossi maps its affected stakeholders into four groups: (a) employees across three plants (820 FTEs), (b) agricultural suppliers, (c) local communities near the processing sites, and (d) consumers of packaged food products. Users of the sustainability statement include two lending banks holding EUR 18M in combined facilities and the company's minority shareholder (a private equity fund holding 30%).
Step 2 — Design and conduct engagement
Rossi runs structured interviews with employee works council representatives (category a), distributes a written questionnaire to its 15 largest suppliers representing 60% of procurement spend (category b), holds two town-hall sessions near its Verona and Parma plants (category c), and sends a focused ESG priorities survey to 200 consumers via its loyalty programme (category d). For users, Rossi conducts bilateral meetings with both lending banks and the PE fund.
Step 3 — Analyse and integrate results
Employee representatives flag working conditions (overtime hours, seasonal contract use) as a priority impact. Suppliers identify water consumption in the supply chain. Lending banks prioritise climate transition risk (exposure to drought affecting crop yields). Rossi's sustainability team scores each topic against the double materiality thresholds set in the IRO assessment.
Step 4 — Report to governance
The sustainability team presents the engagement findings to Rossi's board of directors. The board confirms the final list of material topics: workforce conditions (ESRS S1), water (ESRS E3), climate (ESRS E1), and responsible sourcing (ESRS S2). The board meeting minutes record which stakeholder inputs influenced the materiality conclusion.
Conclusion: Rossi's stakeholder engagement process is defensible because each category maps to a defined group in the value chain, the methods are documented with evidence trails, the link from stakeholder input to the final materiality conclusion is traceable through board-level governance, and the board resolution closes the loop between consultation and decision.
Why it matters in practice
- Teams frequently treat stakeholder engagement as a one-off exercise completed before the first report and then frozen. ESRS 1.24 ties engagement to the undertaking's "ongoing" due diligence process. An engagement register that shows no activity after the initial materiality assessment signals to the assurance provider that the process is not embedded, and the materiality conclusion may not reflect current conditions.
- First-time reporters often engage only with internal stakeholders (employees, management) and neglect external affected stakeholders such as value chain workers or local communities. ESRS 2 SBM-2.45(a)(i)–(ii) requires the undertaking to disclose which categories of stakeholders were engaged and whether engagement actually occurred for each. An assurance provider reviewing a sustainability statement that omits entire affected categories will question the completeness of the materiality assessment.
Stakeholder engagement vs. stakeholder analysis
| Dimension | Stakeholder engagement (ESRS 2 SBM-2) | Stakeholder analysis (preparatory step) |
|---|---|---|
| Purpose | Collect views and interests from identified stakeholders to inform strategy and materiality conclusions | Identify and categorise stakeholders before deciding how to engage them |
| ESRS requirement | Mandatory disclosure under ESRS 2 SBM-2.43–45 | Not a standalone disclosure requirement; feeds into engagement design |
| Output | Documented record of engagement activities, views expressed, how those views influenced the materiality assessment, and any unresolved divergences | Stakeholder map classifying groups by affected/user status and relevance to specific sustainability matters |
| Assurance relevance | Assurance provider tests whether engagement occurred and whether it was sufficient to support the materiality conclusion | Assurance provider may review the analysis as background but focuses testing on the engagement itself |
Stakeholder analysis is the mapping exercise that precedes engagement. An undertaking that produces a detailed stakeholder map but never actually consults those stakeholders has not met the ESRS 2 SBM-2 disclosure requirement.
Related terms
Frequently asked questions
How do I document stakeholder engagement for CSRD assurance?
Maintain an engagement register that records each stakeholder category, the method used (interviews, surveys, workshops, town halls), dates, participation rates, and a summary of the views expressed. ESRS 2 SBM-2.45 requires disclosure of how engagement is organised and its purpose. The register serves as the primary audit evidence when the assurance provider tests whether the double materiality assessment rests on sufficient stakeholder input.
Does stakeholder engagement have to be repeated every year?
The ESRS do not prescribe a fixed annual cycle, but ESRS 1.24 frames engagement as part of ongoing due diligence. In practice, an undertaking that materially changes its operations, value chain, or geographic footprint should re-engage affected stakeholders before concluding that prior-year materiality conclusions still hold. The assurance provider will assess whether the frequency is proportionate to the pace of change.
Can we use existing employee surveys as stakeholder engagement evidence?
Yes, provided the surveys cover sustainability topics relevant to the materiality assessment. ESRS 2 SBM-2.45(a)(iv) requires disclosure of the purpose of the engagement. A general employee satisfaction survey that includes no questions on working conditions or environmental impacts does not satisfy the requirement. Supplement it with targeted questions or separate consultation.