Affected stakeholders
People and the environment the undertaking affects; their evidence informs impact materiality (¶42).
Materiality · stakeholders
Double materiality stakeholder engagement: evidence, not a survey
Double materiality stakeholder engagement means using what the people and environment you affect tell you, mainly through your existing due diligence, as evidence for the impact side of the assessment.
The revised ESRS 1 makes that engagement “a key input” and says no separate engagement process is needed for the materiality assessment.
So the question is not how large a survey to run, but whether the evidence you already hold reaches the people most affected.
The rule
¶42 and AR 24: engagement you already do is the input
The revised ESRS 1 puts stakeholder engagement inside due diligence rather than beside it.
¶42 reads: “The results of engagement with affected stakeholders carried out in the context of ongoing sustainability due diligence activities is a key input to the impact materiality assessment.”
Read AR 24 in full
AR 24 continues the point: “If the undertaking engages with affected stakeholders as part of its due diligence process (if any) to identify, assess and address negative impacts, the results of this engagement provide a valuable input to its materiality assessment, without the need to put in place a separate engagement process for the materiality assessment.”
It then keeps the door open: “However, the undertaking may also seek direct input into its materiality assessment from affected stakeholders or their representatives (such as employee representatives or trade unions), as well as users of sustainability reporting and other experts.”
That direct input can include feedback on the undertaking’s conclusions about material impacts, risks and opportunities and the topics to be reported.
Nothing in Chapter 3 of Delegated Regulation (EU) 2026/1563 requires a survey, a stakeholder panel or a minimum number of responses.
The full method this sits inside is on the double materiality assessment.
What the ESRS askExplore
Module 01 / 04
¶42
Results of engagement with affected stakeholders in ongoing due diligence are “a key input” to impact materiality.
Module 02 / 04
AR 24
Those results serve the assessment “without the need to put in place a separate engagement process”.
Module 03 / 04
Direct input
The undertaking may also seek input from stakeholders, their representatives, users and experts.
Module 04 / 04
AR 25
Management informs and discusses with workers’ representatives.
Who counts
Affected stakeholders: four groups and a silent one
AR 23 of the revised ESRS 1 names the typical categories of affected stakeholders.
They are workers in the own workforce and in the value chain, affected communities, and consumers and end-users, with particular attention to people in vulnerable situations.
Read the categories and their limits
AR 23 adds: “Nature may be considered a silent affected stakeholder.”
That is a permission to treat environmental impacts as affecting a party that cannot speak for itself, not a duty to consult nature as a separate group.
The categories line up with the social standards: S1 own workforce, S2 workers in the value chain, S3 affected communities and S4 consumers and end-users, listed on the ESRS page.
Affected stakeholders are about impacts, so they matter most on the impact materiality side of the assessment.
| Category (AR 23) | Matching topical standard | Typical existing evidence |
|---|---|---|
| Own workforce | ESRS S1 | Workers’ representatives, grievance channels, health and safety records |
| Workers in the value chain | ESRS S2 | Supplier due diligence, audits, sector risk data |
| Affected communities | ESRS S3 | Site-level engagement, complaints, local authority contact |
| Consumers and end-users | ESRS S4 | Complaints, product safety data, customer research |
| Nature (silent) | ESRS E1–E5 | Environmental monitoring, permits, location data |
Affected stakeholdersExplore
Module 01 / 05
Workers
Own workforce and workers in the value chain, and their representatives.
Module 02 / 05
Communities
Communities affected by operations or value-chain activities.
Module 04 / 05
Vulnerable groups
Particular attention to stakeholders in vulnerable situations.
Workers’ representatives
AR 25: a duty that already exists
One form of engagement is not optional for a CSRD reporter, because it comes from the Accounting Directive itself.
AR 25 of the revised ESRS 1 says the management of the undertaking “shall inform workers’ representatives at the appropriate level and discuss with them the relevant information and the means of obtaining and verifying sustainability information”.
Read how AR 25 fits the assessment
AR 25 adds that this process, and where applicable the related communication to the administrative, management and supervisory bodies, constitutes “a valuable element of engagement with stakeholders”.
So a company that already holds that discussion has an engagement input for its own workforce without designing anything new.
AR 24 names employee representatives and trade unions among those the undertaking may also ask for direct input.
Workers’ representativesExplore
Module 01 / 04
Inform
Management informs workers’ representatives at the appropriate level.
Module 03 / 04
Verify
Including the means of obtaining and verifying sustainability information.
Module 04 / 04
Engagement
The process is “a valuable element of engagement with stakeholders”.
Two different audiences
Affected stakeholders are not the users of the report
The ESRS keep two groups apart that are often merged in practice.
Users are the people who read the statement: ¶23 defines material information by the decisions of primary users of general-purpose financial reports and of other users of the sustainability statement.
Read why the distinction matters
Affected stakeholders are the people whose interests the undertaking’s activities affect, and their evidence feeds the impact assessment under ¶42.
A trade union can be both: an affected stakeholder’s representative under AR 24 and a user of the statement under ¶23(b).
Investors, lenders and other creditors are primary users; their information needs define financial materiality, not who counts as affected.
UK SRS S1 knows only the first audience: Appendix A defines primary users as “existing and potential investors, lenders and other creditors”, and the standard has no affected-stakeholder test (UK SRS S1).
Whose view counts for what
Users of the statement
Primary users and other users whose decisions define what information is material (¶23).
From evidence to a conclusion
How engagement feeds severity and likelihood
Engagement does not change the scoring rules; it improves the evidence the rules are applied to.
Negative impacts are assessed on severity — scale, scope and irremediable character — and, if potential, likelihood (¶40), and any one severity factor can make an impact severe (AR 22).
Read the scoring rules engagement must respect
For a potential negative human rights impact, “the severity of the impact takes precedence over its likelihood” (¶40), which is where the voice of the people affected matters most.
Positive impacts are assessed on scale and scope and, if potential, likelihood (¶41), and are never netted against negative ones (¶44).
¶43 settles gross and net: an actual negative impact is assessed as it manifested in the reporting year, and a potential one takes account of prevention and mitigation only if the policies and actions are implemented and can reasonably be assumed to work.
AR 27 adds that a policy which merely implies future actions is not considered, so a promise made in an engagement meeting does not lower a score.
The scoring grid on the double materiality assessment applies these rules to a matter of your own.
What engagement informsExplore
Module 01 / 04
Scale
How serious the negative impact is for the people affected (AR 22).
Module 03 / 04
Irremediable
Whether and how far the harm could be put right (AR 22).
Module 04 / 04
Likelihood
For potential impacts only; severity takes precedence for human rights (¶40).
The value chain
Engagement is not a data demand on suppliers
Stakeholder engagement in the value chain is about understanding impacts on people, not about collecting datapoints from suppliers.
The revised ESRS 1 lets an undertaking assess its value chain without direct input from value-chain actors, using “average regional data, sector data or generally available information” (¶33).
Read how the value-chain cap limits requests
¶32(b) says the undertaking “is not required to assess every possible impact, risk or opportunity across all areas of its operations and upstream and downstream value chain”.
When a CSRD reporter does ask suppliers for information for its CSRD reporting, the value-chain cap in Article 19a(3) of the Accounting Directive limits what it may require from protected undertakings to what the voluntary standard specifies.
Directive (EU) 2026/470 recital 12 says the cap does not prohibit voluntary sharing and applies only to information gathered for CSRD reporting, not to due diligence or other purposes.
The Commission’s note of 6 May 2026 says the cap “does not impose or imply any obligation on any companies in the value chain to provide sustainability information”.
The capped datapoints themselves are in Delegated Regulation (EU) 2026/1560, explained on the VSME guide.
Due-diligence engagement under other EU law is a separate matter, covered on the CSDDD guide.
Value-chain evidenceExplore
Module 01 / 04
Focus
Assess where material impacts are likely, not every possibility (¶32(b)).
Module 02 / 04
Proxies
Average regional data, sector data or generally available information (¶33).
Module 03 / 04
The cap
A reporter may not require more than the voluntary standard from protected suppliers for CSRD reporting.
Module 04 / 04
No obligation
The cap “does not impose or imply any obligation” on value-chain companies.
Across a reporting year
When stakeholder engagement feeds the assessment
This sequence is an illustration of a proportionate approach, not a timetable the ESRS prescribe.
It starts from evidence the undertaking already holds and adds direct input only where that evidence is thin.
- 01 / Map01
List affected stakeholder groups
Use the AR 23 categories and note where people may be in vulnerable situations. - 02 / Gather02
Collect due-diligence evidence
Grievances, worker-representative discussions, supplier due diligence, site engagement. - 03 / Fill gaps03
Use sector and regional data
Where direct input is impractical, proxies are allowed for the value chain. - 04 / Ask directly04
Seek input where evidence is thin
Targeted interviews or feedback on draft conclusions; optional, not required. - 05 / Inform05
Discuss with workers’ representatives
Share the relevant information and how it is obtained and verified. - 06 / Disclose06
Describe it in IRO-1
Say whether and how due diligence and consultation informed the assessment.
A proportionate approach
What good engagement looks like without a survey
A proportionate approach asks what evidence already exists for each affected group before asking anyone anything new.
The following is an illustration, not a method the ESRS prescribe.
Read the illustrative approach
Start with the channels due diligence already runs: grievance mechanisms, worker-representative discussions, supplier assessments and site-level engagement.
Check each AR 23 category against that evidence, and note where a group, especially one in a vulnerable situation, has no voice in it.
Where the gap is in the value chain, use sector and regional data first, as ¶33 allows.
Seek direct input only where it could change a conclusion, for example on the scale of a potential human rights impact.
A working register for this, with the evidence column built in, is on the double materiality assessment template.
Keep a record of what was used and why, because the assurance opinion covers “the process carried out by the undertaking to identify the information reported” (Art 34(1)), as explained under sustainability assurance.
An illustration, not a finding
The sequence above is a way of organising the work.
It is not drawn from any company’s report and does not describe what any regulator expects beyond the text quoted on this page.
- 1
Start from due diligence
Existing channels already reach the people affected.
- 2
Check coverage
Which AR 23 groups have no evidence behind them?
- 3
Fill the gaps
Sector data, then targeted direct input where it changes a conclusion.
- 4
Record it
Keep the evidence trail for IRO-1 and assurance.
What the statement says
Disclosing stakeholder engagement in ESRS 2 IRO-1
The ESRS do not ask for a separate stakeholder report.
Engagement surfaces in ESRS 2 IRO-1, which describes the assessment process, including whether and how due diligence and stakeholder consultation informed it.
Read what to keep on file
The application requirements ask the company to describe its own process rather than recite the standard.
So the file behind IRO-1 should show which groups were covered, through which channels, what changed in the conclusions because of it, and where proxies were used instead.
A framework-neutral version of the same work, for a UK SRS or GRI report, is on the materiality assessment guide.
| Evidence to keep | Why |
|---|---|
| Which AR 23 groups were covered, and how | Shows the impact assessment reached the people affected |
| Which conclusions changed because of engagement | Shows the input was used, not collected for show |
| Where sector or regional data stood in | ¶33 allows it; the file should say where |
| The workers’ representative discussion | AR 25 records it as an element of engagement |
Where engagement showsExplore
Module 01 / 04
IRO-1
The process, including whether due diligence and stakeholder consultation informed it.
Other frameworks
Stakeholder engagement in GRI, UK SRS and ESRS-40a
Engagement means something different under each framework, because each asks a different materiality question.
GRI 3 is an impact-only test in four steps — understand the context, identify impacts, assess their significance, prioritise the most significant — with the same severity characteristics as the ESRS.
Read the comparison
This page does not summarise GRI 3’s own engagement provisions; the Standard itself and the GRI Standards guide are the place for those.
UK SRS S1 applies single (financial) materiality: information is material if it could reasonably be expected to influence the decisions of primary users (¶18), defined in Appendix A as existing and potential investors, lenders and other creditors.
It has no affected-stakeholder requirement, and the UK SRS materiality page sets out its test.
The draft ESRS-40a for third-country groups covers impacts only, so affected stakeholders sit at its centre; EFRAG’s consultation runs to 31 October 2026, as at 11 October 2026, and the ESRS-40a guide covers it.
EFRAG’s IG 1 of May 2024 is non-authoritative and written for the 2023 ESRS; how to use it now is set out under EFRAG implementation guidance.
Who engages whomExplore
Module 01 / 04
ESRS
Affected stakeholders inform impact materiality; no separate process needed.
Module 02 / 04
GRI 3
An impact-only test in four steps, with the same severity characteristics.
Module 04 / 04
ESRS-40a
The draft third-country standard covers impacts only.
The instruments, by date
How the stakeholder rules reached their current form
The rules quoted on this page come from the revised ESRS, which apply to financial years beginning on or after 1 January 2027.
For a financial year starting in 2026 an undertaking may still use the 2023 ESRS, with or without eight reliefs, and must say which version it applied.
- 1 January 202301
GRI 3 effective
For reports or other materials published on or after this date. - 31 July 202302
- 31 May 202403
- 23 July 202604
ESRS-40a exposure draft
The draft third-country standard, impacts only; consultation to 31 October 2026. - 21 September 202605
Revised ESRS published
Delegated Regulation (EU) 2026/1563, with ¶42 and AR 23–AR 25. - FY2027 onwards06
What goes wrong
Six stakeholder engagement mistakes
Running a survey because “the ESRS require it”
They do not; due-diligence engagement is the key input (¶42, AR 24).
Surveying investors as “stakeholders”
Investors are users whose needs define financial materiality; affected stakeholders are a different group (¶23, ¶42).
Forgetting people in vulnerable situations
AR 23 asks for particular attention to them.
Demanding data from every supplier
Sector and regional data can stand in (¶33), and the value-chain cap limits CSRD-purpose requests.
Counting promises made in meetings
A policy that only implies future actions is not considered (AR 27).
Boilerplate in IRO-1
Describe your own process, not the standard.
The rest of the method — thresholds, scoring and outputs — is on the double materiality assessment, and the concept on double materiality.
Every guide in the section is mapped on materiality explained.
Frequently asked
Questions people ask
What is double materiality stakeholder engagement?
It is how an ESRS reporter brings the views and circumstances of the people and the environment it affects into its double materiality assessment.
Under the revised ESRS 1, the results of engagement with affected stakeholders carried out in ongoing sustainability due diligence are “a key input” to the impact materiality assessment (¶42).
Do the ESRS require a stakeholder survey for the materiality assessment?
No. AR 24 of the revised ESRS 1 says that where an undertaking engages with affected stakeholders as part of its due diligence, the results provide a valuable input to the materiality assessment “without the need to put in place a separate engagement process for the materiality assessment”.
A survey is one optional way to gather direct input, not a requirement.
Who are affected stakeholders under the ESRS?
AR 23 of the revised ESRS 1 lists the typical categories: workers and workers’ representatives in the own workforce and in the value chain, communities affected by the operations or value-chain activities, and consumers and end-users.
It asks for particular attention to people in vulnerable situations, and says nature may be considered a silent affected stakeholder.
Is nature a stakeholder in a double materiality assessment?
The revised ESRS 1 AR 23 says “Nature may be considered a silent affected stakeholder.”
That is a permission, not a duty to treat nature as a separate consultation party; environmental impacts are assessed on the same severity and likelihood criteria as other impacts.
Are investors affected stakeholders?
Not in ESRS terms.
Investors, lenders and other creditors are primary users of general-purpose financial reports, whose decisions define financial materiality (¶23(a)).
Affected stakeholders are the people whose interests the undertaking’s activities affect, which is the impact side.
Can an undertaking still consult stakeholders directly?
Yes.
AR 24 says the undertaking “may also seek direct input into its materiality assessment from affected stakeholders or their representatives (such as employee representatives or trade unions), as well as users of sustainability reporting and other experts”, including feedback on its conclusions.
What must management do with workers’ representatives?
AR 25 of the revised ESRS 1 restates the Accounting Directive duty: management “shall inform workers’ representatives at the appropriate level and discuss with them the relevant information and the means of obtaining and verifying sustainability information”. It calls that process a valuable element of engagement with stakeholders.
Does engagement change how impacts are scored?
It informs the evidence, not the rules.
Negative impacts are still assessed on severity — scale, scope and irremediable character — and, if potential, likelihood (¶40); positive impacts on scale, scope and, if potential, likelihood (¶41).
Engagement helps judge those factors, especially for people in vulnerable situations.
Do I need to engage every supplier in my value chain?
No. The revised ESRS 1 says the undertaking is not required to assess every possible impact across its value chain and should focus where material impacts are likely (¶32(b)), and it may use average regional data, sector data or generally available information instead of direct input from value-chain actors (¶33).
Can a CSRD customer make my company take part in its engagement?
Not as a CSRD obligation.
The value-chain cap stops a CSRD reporter requiring protected suppliers to provide more than the voluntary standard specifies for its CSRD reporting, and the Commission says the cap “does not impose or imply any obligation” on companies in the value chain.
Any obligation would come from a contract or other law.
What does the sustainability statement disclose about engagement?
ESRS 2 IRO-1 describes the assessment process, including whether and how the undertaking’s due diligence and consultation with stakeholders informed it.
The application requirements ask for information specific to the company’s own process rather than boilerplate.
Does UK SRS require stakeholder engagement for materiality?
UK SRS S1 uses single (financial) materiality, judged by the information needs of primary users — existing and potential investors, lenders and other creditors (¶18 and Appendix A).
It has no affected-stakeholder engagement requirement of the ESRS kind; impacts enter only as sources of risks and opportunities.
Does GRI 3 use the same idea?
GRI 3 is an impact test with four steps — understand the context, identify impacts, assess their significance and prioritise the most significant — and uses the same severity characteristics as the ESRS.
This page does not summarise GRI 3’s own engagement provisions; read the Standard itself for those.
Is EFRAG guidance on stakeholder engagement still usable?
With care.
EFRAG’s IG 1 of May 2024 is non-authoritative and written for the 2023 ESRS, so its paragraph references do not match the revised standards.
As at 11 October 2026 EFRAG lists no implementation guidance for the revised ESRS.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
Checked against 13 sources fromEUR-LexCouncil of the EUEFRAGEuropean CommissionGlobal Reporting InitiativeDepartment for Business and Trade
- EUR-LexCommission Delegated Regulation (EU) 2026/1563 — revised ESRS 1 ¶¶23, 32–33, 39–44, AR 23–AR 25, AR 27
Engagement with affected stakeholders in due diligence is a key input (¶42); no separate engagement process is needed (AR 24).
- Council of the EUC(2026) 5010 final, Annex I — the revised ESRS as transmitted
The same text before publication in the Official Journal.
- EFRAGESRS Knowledge Hub — revised ESRS 2, IRO-1 (delegated-act text)
What the statement says about the assessment process, including whether stakeholder consultation informed it.
- EUR-LexCommission Delegated Regulation (EU) 2023/2772 — the 2023 ESRS
The first set, adopted 31 July 2023; one of the FY2026 options.
- EUR-LexDirective 2013/34/EU, consolidated 18 March 2026 — Art 19a(3)
The value-chain cap a CSRD reporter must respect when it asks suppliers for information.
- EUR-LexDirective (EU) 2026/470 (Omnibus I) — recital 12
The cap does not prohibit voluntary sharing and applies only to information gathered for CSRD reporting.
- European CommissionAdditional explanatory information on the value chain cap, 6 May 2026
The cap “does not impose or imply any obligation” on companies in the value chain.
- EUR-LexCommission Delegated Regulation (EU) 2026/1560 — the voluntary standard
The datapoints that bound what a reporter may require from protected suppliers.
- EFRAGIG 1: Materiality Assessment Implementation Guidance, May 2024
Non-authoritative; written for the 2023 ESRS; one assessment covering both perspectives (¶65).
- EFRAGESRS implementation guidance documents — project page
No guidance for the revised ESRS is listed as at 11 October 2026.
- EFRAGESRS-40a exposure draft — Basis for Conclusions
The draft third-country standard covers impacts only; consultation to 31 October 2026.
- Global Reporting InitiativeGRI 3: Material Topics 2021 (PDF) — Steps 1–4
The impact-only test; severity is scale, scope and irremediable character.
- Department for Business and TradeUK SRS S1 General Requirements — ¶18 and Appendix A
Primary users are existing and potential investors, lenders and other creditors.