Stakeholder Engagement in ESRS: affected stakeholders, due diligence, representatives, proxies, grievance mechanisms, materiality evidence and governance

2026 REVISED ESRS · HOW-TO / TECHNICAL GUIDE

Affected stakeholders, users, direct engagement, credible proxies, vulnerable groups, grievances, due diligence and decision traceability

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© 2026 London Reporting Academy. Educational technical guidance.

REQUIREMENT Revised ESRS distinguishes affected stakeholders from users of sustainability information. Affected stakeholders are individuals or groups whose interests are affected or could be affected by the undertaking’s activities and its direct and indirect business relationships. Users include primary users of general-purpose financial reports and other users of general-purpose sustainability statements. Some groups can belong to both categories, but the roles are not interchangeable.

Source anchor: Revised ESRS glossary and ESRS 1, paragraph 42.

Stakeholder engagement is an ongoing process of interaction and dialogue that enables the undertaking to hear, understand and respond to stakeholder interests and concerns. The standard does not prescribe one universal survey, one scoring method or a separate annual engagement exercise solely for the double materiality assessment.

Figure 1. Affected stakeholders, users and engagement routes.

The engagement disclosure is therefore distributed across the statement. IRO-1 focuses on how stakeholder evidence informed the assessment. SBM-2 focuses on the relationship with strategy, business model and governance. The social standards focus on ongoing engagement with specific stakeholder groups and the channels, remedy and action architecture.

REQUIREMENT Typical affected-stakeholder categories include own workforce and worker representatives, workers in the upstream and downstream value chain, affected communities, and consumers and end-users. Particular attention is given to people within these categories who are in vulnerable situations. Nature may be treated as a silent affected stakeholder, with scientific and ecological evidence used to represent its condition.

Source anchor: Revised ESRS 1, AR 23.

The stakeholder map should be built from impact pathways rather than a generic corporate list. For each activity, product, service, asset or business relationship, identify who may be affected, how, where, over which time horizon and whether barriers make their voice less visible. A procurement manager, investor or regulator may be a user or internal participant but is not automatically a proxy for an affected worker or community.

Direct engagement is often the richest source of evidence, but it is not always possible, safe or proportionate. Workers may be engaged through legitimate worker representatives or trade unions. Value-chain workers, communities, consumers and end-users may be engaged directly, through legitimate representatives or through credible proxies with sufficiently deep knowledge of their experiences.

A proxy should be selected because it can credibly convey affected-stakeholder perspectives, not merely because it is convenient. The undertaking should document the proxy’s relationship to the group, expertise, independence, limitations and any groups or views not represented. For indigenous peoples, the relevant community and human-rights requirements, including free, prior and informed consent where applicable, require particular care.

Engagement should be designed around the potential impact and the stakeholder context. Information sessions, consultation and participation are different levels of involvement. The undertaking should not describe one-way communication as consultation or a satisfaction survey as evidence of meaningful engagement on severe impacts.

REQUIREMENT The social standards require disclosure of channels available to the relevant stakeholder group to raise concerns or needs, including whether a grievance mechanism exists and how the undertaking assesses the effectiveness of those channels. The UN Guiding Principles’ effectiveness criteria for non-judicial grievance mechanisms can be used as a reference.

Source anchor: Revised ESRS S1-S4 stakeholder-engagement DRs and ARs.

A grievance mechanism is one engagement channel and an important source of impact evidence; it is not proof that due diligence or remediation is effective. Low complaint numbers may reflect low harm, lack of awareness, fear of retaliation, inaccessibility or distrust. The evidence file should include awareness, accessibility, use, timeliness, outcomes, stakeholder feedback, non-retaliation safeguards and unresolved cases.

Where the undertaking has caused or contributed to a material negative impact, the social standards require a description of the general approach and processes to provide or cooperate in remediation. The disclosure should distinguish remedy for actual harm from future prevention or mitigation.

Figure 2. Stakeholder engagement evidence chain from mapping to governance and disclosure.

The central control is a stakeholder-influence log. It records the issue raised, source, stakeholder group, affected IRO or decision, management response, owner, approval and feedback. Not every view must lead to the action requested, but the undertaking should be able to explain how the view was considered and why a different conclusion was reached.

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