Stakeholder Engagement

Stakeholder Engagement Under CSRD: What's Actually Required

Stakeholder engagement is a core part of CSRD's double materiality assessment. Under ESRS 1 and ESRS 2, companies in scope must identify their key stakeholders, understand how sustainability topics affect them, and reflect that understanding in their materiality conclusions and disclosures.

For small and growing businesses (SMEs), this does not mean running extensive surveys or hiring consultants. A proportionate approach — a handful of structured conversations with the right people — is both compliant and practical.

Who Counts as a Stakeholder?

• Own workforce — employees, contractors, agency workers directly engaged
• Value-chain workers — workers at suppliers and subcontractors (particularly in high-risk sectors)
• Customers and end-users — especially for consumer products and regulated services
• Affected communities — local residents near operations or along key supply chains
• Investors and lenders — banks, private investors, grant-making bodies
• Civil society — NGOs, industry associations, local government (where relevant)

A Proportionate Approach for SMEs

A small business does not need a stakeholder panel. What it does need is evidence that it listened — a short log of conversations, a summary of what was heard, and a note of how those views informed materiality. Most SMEs can complete this with 3–6 conversations and a single-page summary.

Under the voluntary VSME Standard, engagement is even lighter — a short description of how the business identifies stakeholders and what mechanisms exist to hear from them (e.g., employee feedback channels, customer complaints process, supplier codes of conduct).

The articles below cover who counts as a stakeholder, how to run proportionate engagement for a small business, and how to document the output in CSRD or VSME format.