CSRD: How to Engage with Stakeholders

The Double Materiality Assessment 

A Double Materiality Assessment forms the foundation of the CSRD reporting process. When conducting this assessment, The European Sustainability Reporting Standards (ESRS) requires companies to consider stakeholders’ perspectives and impacts. But with no mandatory guidelines on stakeholder engagement under the ESRS, there is a question of how to engage and manage stakeholders effectively.  

For more information on double materiality, check out our blog post: Double Materiality: how to focus on the issues that matter the most

Why is it important to engage with stakeholders beyond legislation? 

Before we dive into the steps, first we need to understand why it is so important to engage with stakeholders, even beyond legislative requirements. When approaching CSRD and sustainability, businesses need to have the long-term in mind. This includes thinking about your value chain and communicating with your key stakeholders.  

Often, people working on the ground in factories and facilities have a unique understanding of the problems facing their industries and the solutions required to create meaningful change. By building relationships with experienced and knowledgeable stakeholders, you can start to share valuable insights and work together to find collaborative solutions. The most effective sustainability strategies include the perspectives of everyone involved in the process. 

Now we know why stakeholder engagement is vital to the success of your sustainability strategy, we can look at the steps involved in identifying, prioritising and engaging your stakeholders. 

Stakeholder Mapping 

The first step is to map all of your stakeholders. When creating your stakeholder map, start broadly before narrowing your focus.

For CSRD, typical stakeholder categories include: 

• Employees 

• Suppliers 

• Consumers 

• Local communities 

• Public authorities, including regulators, supervisors and central banks 

From here, you need to divide your stakeholders into two groups. The ESRS identify two types of relevant stakeholders: 

Affected Stakeholders: Individuals or groups whose interests are influenced by the undertaking’s activities, such as employees, suppliers, and customers. 

Users of Sustainability Statements: Individuals or entities that rely on the information within the Sustainability Statement to make decisions, including investors, lenders, asset managers, credit institutions, and others. 

Top tip: A great place to start is by leveraging your existing stakeholder relationships and initiatives.  

If your company is starting this process from scratch, this is a perfect opportunity to look at the context in which your business operates. In doing so, you can identify key players within the value chain and relevant communities who could provide invaluable perspectives.  

Prioritisation 

The next step is to decide which stakeholders should be engaged in what way and identifying the most pressing stakeholder groups to engage with. Remember that this can vary by project. You may need to prioritise different stakeholders at each stage in your sustainability journey. 

For each category you identified in your stakeholder map, establish a spokesperson or representative that you can contact later in the process. At this point, it is worth considering which ESRS or sustainability matters are relevant to each stakeholder. This can help you ensure you are engaging with a diverse range of people and covering all aspects of the matter. 

Things to consider: 

Size: Large stakeholders with significant influence or those who are directly affected by the business’ operations. 

ESG Maturity: Stakeholders at various stages of integrating ESG factors into their business practices, for diverse perspectives. 

Stakeholder Relationship: The nature of the relationship between the company and the stakeholder. 

Engagement 

The final step is to outline your action plan; how do you plan to engage with your different stakeholder groups? What communication channels or platforms will you use? 

There are 3 types of engagement you can choose from, participation, consultation, and information. You need to select the best method for collecting information from your stakeholders. This may vary depending on the type of involvement or knowledge required. 

Some examples include:  

Surveys: Good for collecting large amounts of information from a large number of stakeholders and allows for anonymity. 

Interviews: Collect detailed insights. Good for building trust and relationships with stakeholders. 

Workshops: Generate deeper understanding of topics and get more comprehensive results. 

Need help with workshops and supplier training? 

We work collaboratively with our clients to foster productive relationships across their stakeholder networks, through tailored engagement, workshops and supplier training. Get in touch to find out how we can help.  

How often should you engage with stakeholders? 

Your engagement processes can be ongoing, quarterly or annually. How often you engage with your stakeholders is up to you and will likely vary depending on the project and its requirements. No matter how often you decide to engage with your stakeholders, ensure it is meaningful to allow you to get the most out of the process. 

What are the characteristics of meaningful stakeholder engagement? 

• Two-way communication 

• Responsiveness 

• Stakeholder involvement in decision-making processes 

5 questions to think about before deciding on stakeholder engagement: 

1. What resources need to be allocated (financial and human capital) for stakeholder engagement? 
2. How should we centralise the stakeholder engagement activities and information? 
3. Where should the engagement activities take place? Depending on the situation, the stakeholder engagement might take place at an organisational level or at a site or project level. 
4. When should your company engage directly with stakeholders and when should you engage with stakeholder representatives or other credible independent experts? 
5. Is the understanding of the stakeholder groups on a satisfactory level? Are potential barriers (language, cultural, gender and power imbalances, division within the community or group) taken into account?