Under the European Sustainability Reporting Standards (ESRS), organizationscan leverage their ongoing dialogue with stakeholders for the materiality assessment.The ESRS explicitly acknowledges that stakeholder engagement plays a fundamental role in assessing material impacts, risks, and opportunities.

Stakeholder Engagement is Central to Materiality Assessment

ESRS 1 and ESRS 2 emphasize that organizations should integrate stakeholder perspectives into their materiality assessments.Engagement with affected stakeholders is central to the undertaking’s ongoing due diligence process and sustainability materiality assessment.This includes processes to identify and assess actual and potential negative impacts, which inform the identification of material sustainability topics​.

ESRS Does Not Mandate a Specific Stakeholder Engagement Approach

While stakeholder input is considered valuable, the ESRS doesnot prescribe a mandatory format or behavior for engagement. Companies have flexibility in determining how they engage with stakeholders.

IG 1 Materiality Assessment FAQ 15states:"The ESRS require disclosure on the materiality assessment and its outcomes but do not mandate specific behavior on stakeholder engagement or the due diligence process."​.

Stakeholders Can Provide Objective Evidence

The materiality assessment should be based as much as possible onobjective data and evidence, butstakeholder perspectives can be a source of supporting evidencefor impact materiality.

The relevance of stakeholder input depends onhow much they are affectedby an organization’s activities (severity and likelihood of impacts)​.

Due Diligence and Materiality Assessment

Thedue diligence process includes stakeholder engagement, which informs the materiality assessment. Organizations must report how they integrate stakeholder feedback into identifying and assessing material issues​.

Nature as a Silent Stakeholder

The ESRS even recognizes thatecological data and conservation indicatorsshould be considered as proxy indicators for stakeholder engagement where human stakeholders are absent (e.g., in cases of biodiversity impact assessments)​.

Thus, the statement in the question isfalse. Organizationsare encouragedto utilize their existing stakeholder engagement mechanisms to inform their materiality assessments under ESRS.

Official References:

Commission Delegated Regulation (EU) 2023/2772​.

Compilation Explanations January - November 2024​.

ESRS 1 & 2 Guidelines on Double Materiality​.