Affected stakeholders in the ESRS framework

A textile brand with production distributed across Pakistan (cotton), Turkey (spinning) and Morocco (garment-making) identifies and consults its affected stakeholders as part of the IRO-1 process before publishing its first CSRD Sustainability Statement.

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  Initial mapping: identifies 5 categories of affected stakeholders at elevated risk (Pakistan cotton workers, Turkey spinning, Morocco garment-making, the riverside community of the dyeing plant, end consumers sensitive to allergens).

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  Tier 4 cotton consultation: a survey via the Better Cotton Initiative + semi-structured interviews with local cooperatives (n=120 workers).

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  Tier 2 spinning consultation: focus groups with the Turkish textile union DİSK Tekstil + a review of BSCI social audits.

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  Tier 1 garment-making consultation: interviews with local union representatives in Tangier + a roundtable with the NGO Clean Clothes Campaign Morocco.

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  Community consultation: a local assembly in the dyeing-plant area + independent measurements of water quality of the Sebou river (n=4 points).

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  Consumer consultation: a panel of allergen-sensitive users + a review of claims on social media and reviews (n=540 reviews analysed).

Common mistakes

• Affected stakeholders and users of the sustainability report are TWO distinct categories — they are not synonyms.

  ESRS 1 ¶22 distinguishes two categories in faithful paraphrase: (a) affected stakeholders, whose interests are or could be affected positively or negatively by the company's activities; (b) users of the sustainability report, who include investors, lenders, creditors, business partners, trade unions, NGOs, governments, analysts and academics. ¶23 recognises that some — not all — stakeholders may belong to both groups. Confusing the two leads to due-diligence processes where dialogue with investors is treated as dialogue with affected parties, something radically different in terms of severity, voice and power.

• Nature is a valid stakeholder in the ESRS framework — via scientific data as a proxy.

  ESRS 1 AR 7 establishes in faithful paraphrase that nature may be considered a silent stakeholder, and that in that case ecological and species-conservation data may feed the materiality assessment. The concept extends the framework beyond the traditional anthropocentrism of stakeholder theory. For the environmental standards (E1-E5), ecological and conservation data function as inputs equivalent to direct dialogue. Companies that reduce dialogue to interviews with people lose this key dimension in environmental materiality.

• When direct dialogue puts the stakeholder at risk, the ESRS permits alternatives — it does not require direct dialogue.

  EFRAG IG 1 ¶108 provides in faithful paraphrase: when dialogue with affected stakeholders is not possible — for example because such dialogue would put them at risk — the company may consider appropriate alternatives. These alternatives include consulting credible independent experts (via ESRS S3 Affected communities), turning to an NGO representative of the affected community or, for environmental matters, relying on scientific articles and reports. In Xinjiang contexts, conflict zones or any situation where direct conversation could generate reprisals, dialogue via credible NGOs, independent experts or scientific reports is valid and documentable under IRO-1.

• Dialogue with affected stakeholders is not optional: ESRS 2 IRO-1 requires the consultation to be documented.

  ESRS 2 IRO-1 ¶53(b)(iii) requires the impact-identification process to include consultation with affected stakeholders to understand how they may be impacted, as well as with external experts. EFRAG IG 1 ¶102 reinforces it. Although the ESRS does not impose a specific dialogue methodology, it does require documentation of WHETHER consultation took place, HOW it was carried out and HOW the results informed the conclusions on material IROs. The generic statement "we consulted stakeholders" without documentation of method and results breaches IRO-1.

• Affected stakeholders are not equivalent to a published supplier list — brand transparency is not dialogue.

  EPRS PE 757.808 §2.2 p.3 documents the Fashion Pact case in faithful paraphrase: 30% of companies published the first-tier supplier list without linking that information to products. A supplier list published as a corporate-transparency exercise is not equivalent to affected stakeholders consulted. Affected stakeholders include the workers in those factories, the adjacent communities and the local nature — not only the supplier companies as entities. Dialogue with affected stakeholders is with affected people and communities, not with the legal entity of the supplier.

Frequently asked questions