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News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)
The European Sustainability Reporting Standards (ESRS) emphasise the importance of stakeholders for sustainability activities:
- D-ESRS 2.BC54: “Interactions between stakeholders and the undertaking impact deeply on how sustainability matters are considered by the undertaking.”
- D-ESRS 1.28: Stakeholder involvement “is central to the undertaking’s ongoing due diligence process (…) and sustainability materiality assessment.”
- D-ESRS 1.65 (b) (iv): “The core elements of due diligence are (…) engaging with affected stakeholders.”
- D-ESRS 1.BC 99: “Engagement with affected stakeholders is a central component in all steps of an undertaking’s due diligence processes.”
- D-ESRS 1.BC 74: “… due diligence process should be throughout informed by engagement with relevant stakeholders …”
- D-ESRS 1.AR 3: “Materiality assessment is informed by the dialogue with affected stakeholders.”
Affected stakeholders
Affected stakeholders are individuals or groups whose interests are or could be affected by activities and business relationships across the value chain.
Relevant stakeholders
Relevant stakeholders are primary users of general-purpose financial reporting, as well as, for example, business partners, social partners, governments and civil society.
The obligation to involve stakeholders in the sustainability reporting process is undisputed. The ESRS does not make any concrete specifications with regard to the manner of involvement. It is questionable whether direct surveys (based on interviews, questionnaires and the like) of important stakeholders must be carried out.
The nature and extent of stakeholder engagement should:
- Be appropriate to the size of the business enterprise and the nature and context of the operation and;
- Correspond to the nature and severity of the impacts and the undertaking’s relation to those impacts.
Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at carsten.ernst@wirtschaftstreuhand.de or by mobile phone at +49 173 8710322.
Happy accounting and stay sustainable,
Carsten
 Carsten Ernst Managing Partner Wirtschafts Treuhand Group Stuttgart, Germany | – Expert in financial (IFRS) and sustainability (ESRS and GRI) reporting – Audit of financial and sustainability reports in accordance with ISAs – Member of the following AGN bodies: – EMEA Board of Directors (Chairman) – EMEA AAEC Accounting, Auditing and Education Committee (Member) |