What is the role of interviews in stakeholder engagement?

Stakeholder interviews have become an essential tool for companies to improve their sustainability reporting by integrating insights from the actors that are directly affected by or who can influence the company’s activities at different stages. Hence, it’s a critical aspect for a company’s compliance to EU regulations and standards such as the CSRD and the ESRS. 

Incorporating these inputs into practice, particularly in the context of double materiality assessments (DMA), helps companies both foresee and manage upcoming material impacts, risks and opportunities. Moreover, it captures the needs, interests, and expectations of stakeholders, building future-proof businesses for long-term value creation and resilience. 

This article addresses the best practices linked to incorporating stakeholder insights into double materiality assessments to achieve comprehensive sustainability reporting and compliance. We’ll provide a step-by-step guide on how to identify different types of stakeholders and engage them through stakeholder interviews.

Stakeholder engagement in the context of sustainability and compliance

Why are stakeholder interviews essential for CSRD and double materiality?

The European Sustainability Reporting Standards (ESRS) lays down what it means to engage stakeholders, and how to do so. Older frameworks like NFRD focused primarily on environmental or financial disclosures in isolation. This has changed. Now, stakeholder interviews constitute a crucial part of DMAs. Although indirectly related, they contribute to dialogue between companies and stakeholders. This is exactly what is needed to achieve the comprehensive approach behind ESRS. Without these inputs, sustainability assessments are incomplete.

This is how stakeholders engagement is an essential pillar to meet with sustainability reporting standards:

• Disclosure requirement (ESRS 1, IRO-1): At the core of the ESRS there is a strong consultation mechanism. This requires companies to identify, understand and describe their impacts, risks, and opportunities, in collaboration with their stakeholders. Companies have to provide quality information to meet the needs of stakeholders, such as investors and creditors, regulators, NGOs, or communities. 
  

• Disclosure requirement (ESRS 2, SBM-2): Communication is another pillar for ESRS. The standards make a specific mention to the changes in the business model based on stakeholder views, or which could potentially affect their interests. Moreover, it requires that a company’s management bodies disclose their awareness on the impacts of their activities on sustainability. 
  

• Disclosure requirement (ESRS 2, MDR-P): For companies to take action, for instance developing policy and targets on sustainability matters, it is not enough to disclose in terms of scope of action. Companies have to study their value chain, geographically and timely. That demands knowing their stakeholders and how they are affected by their operations.
  

• Disclosure requirement (ESRS 2, MDR-T): Once action is taken, progressive track on stakeholder engagement is required for each material sustainability matter. Companies need to disclose if stakeholders have been involved in the process and how.
  

The 5 levels of stakeholder engagement

Knowledge on the disclosure requirements highlighted above allow you to effectively engage with your stakeholders for the future interviewing process. These are the 5 levels to follow:

Level 1: Inform your stakeholders

Letting the relevant stakeholders know an input will be required beforehand improves transparency and enables trust within the organization. This foundation is crucial for DMAs and CSRD processes. 

In relation to ESRS 2, SBM-2, this involves disclosing:

1. Who their key stakeholders are
2. Whether and how they engage with them
3. Why they engage (the purpose of engagement)
4. How the engagement is structured
5. What comes out of that engagement, and how those insights are considered in business decisions
6. Whether company leadership is informed about these views

You can inform your stakeholders about these by sending an email or setting up a meeting.

• Tip: Informing does not necessarily involve active dialogue with stakeholders. However, it is an essential first step to lay the groundwork for deeper engagement in future stakeholder relationships. 

Level 2: Consult your stakeholders

Once stakeholders are well informed of the activities and projects the company is involved in, consulting is the next sensible step to take. Sustainability managers can reach out to their stakeholders to actively seek inputs. In the context of DMA, the consultation process often involves interviews where stakeholders might share their perspectives on sustainability impacts and risks. These interviews allow for legal compliance under IRO-1, ensuring that DMAs are informed by real stakeholder concerns.

• Tip: Consultation processes do not require that the company implements every input retrieved from stakeholders into actual practice. However, it is a critical step to uncover potential limitations, and most importantly to show that stakeholder input is highly valued.

Level 3: Involve your stakeholders

After gathering information from stakeholders, the company might have found that some of the input should be integrated. This is where communication turns two-way. The involvement stage gives stakeholders proactive engagement and the ability to shape the projects that the company is involved in.Interviews and surveys are go-to methods at this stage as well. 

• Tip: To actively maintain the co-shape decision-making for next stages, think about hosting workshops to discuss issues more in-depth. Advisory panels and groundtables for ongoing discussions, as well as summary reports and roadmaps to keep track of stakeholder contributions in future negotiations.

Level 4: Collaborate with your stakeholders

Taking it a step further, stakeholder involvement in the projects eventually translates into meaningful collaboration. Decision-making processes take part of this stage, and stakeholders are considered as an integral pillar of the company.

• Tip: A crucial step of collaboration is shaping governance structures with your stakeholders. Based on ESSR disclosure requirements, try to formalize roles within stakeholder committees to ensure they are actively contributing to the development of the sustainability agenda. Apart from only hosting panel reviews, make them active participants, fostering sharing their local expertise on the discussed matters.

Level 5: Empower your stakeholders

Empowering stakeholders constitutes the final step of their engagement. It materializes into stakeholder-led outcomes. At this stage, stakeholders have achieved the highest degree of authority, dialogue, and proactiveness within the company and its projects. Empowerment allows for a holistic approach to double materiality assessment and ESG integration in CSRD projects.

• Tip: Empowering your stakeholders is not only a static stage but a direct and ongoing process of stakeholder engagement. It builds meaningful relationships and eventually creates sustainability governance.

Planning your stakeholder interviews

The stakeholder pool for your company might be too broad; you just do not know where to start. In that case, the best path to follow is the creation of stakeholder mappings. They will allow you to have an overview of your stakeholders, classify them, and understand how they best contribute to the purposes of your sustainability strategy and DMA processes. 

Who to involve? Internal vs. external stakeholders

The first step for stakeholder mapping is understanding who your stakeholders are. Looking back to the ESRS requirements for stakeholder engagement, mapping demands identifying both the nature of the impact (how stakeholders are affected) and the position of the impact (where these stakeholders are positioned within the company).

Regarding the nature impact, there are direct and indirect 

• Direct stakeholders are those who are affected by the company first hand. This  also means that they have more influence on the company’s operations. As a result, their interest in a company’s projects is bigger. 
• Indirect stakeholders are not directly involved or impacted by the company’s operations. They play a role, but it is not as immediate. 

As for the position of the impact, there is a difference between internal and external stakeholders.

• A company’s internal stakeholders include employees, managers, investors and shareholders.
• A company’s external stakeholders usually account for customers, local communities, suppliers, NGO’s, and regulators such as government institutions.
  

How to involve them? Prioritizing stakeholders

Once different types of stakeholders have been identified, you have to prioritize them. The ideal way to do so is scoring them on a scale from 1 to 5, one being the lowest and five the highest, for each of a set of criteria. The overall score of each stakeholder is what matters, however, some exceptions can be made.

1. Influence 

Influential stakeholders have the power to shape and control the company’s decision on specific matters. To evaluate the influence of your stakeholders, you can ask questions such as:

• Can this stakeholder affect our policies, strategy, or business model? 

If the answer is no, they will score between 1 and 2 points on the scale

• Do they hold regulatory, financial, or reputational power? 

If positive, these stakeholders would most probably rank between 3 to 4 points

• If they raised a concern, how urgently would we need to act? 

The more urgent the need to act the more influential your stakeholder is. They should account for high influence in your scoring (5 points)

 In the context of sustainability, for instance, regulators are highly influential stakeholders (5 points) as they set the basis for sustainability legislation

2. Interest

Interest illustrates the level of concern of stakeholders in the company’s project. Assessing the interest of your stakeholders involve understanding these points:

• How vocal is this stakeholder about ESG topics? 

If the answer for your stakeholder is no visible engagement, it will score between 1 and 2 points

• Have they previously asked for ESG disclosures or raised sustainability concerns?

 If your stakeholder is only partially engaged, it should score (3 points)

• Would they be affected by the company's management of climate or social risks? 

The stakeholders who are the most affected are most probably actively interested and concerned by your sustainability practices, ranking the highest

NGOs are considered as highly interested stakeholders in the sustainability context (5 points)

3. Knowledge

Some stakeholders might have more expertise than others in DMA and CSRD projects. In CSRD and DMAs projects, the criteria of knowledge should prioritize highly knowledgeable stakeholders such as scientists or ESG experts. Consider analyzing the following:

• Do they have deep subject-matter expertise in ESG or CSRD? 

If your stakeholders are not scientists or ESG experts, they will probably rank low according to this criterion

• Are they familiar with regulatory frameworks or industry benchmarks? 

Moderately knowledgeable stakeholders should score between 2 and 3 points

• Could they help us refine our materiality assessment or validate the company’s priorities? 

Highest scores - between 4 and 5- allow you to identify the most knowledgeable stakeholders in your pool

4. ESG maturity

Illustrates the development level of stakeholder groups in integrating ESG to their activities and objectives. As the combination between interest and knowledge, ESG maturity of stakeholders vary, and it is important to identify where they stand. To identify this criteria, it is usually helpful to look at their overall maturity as a group through the following questions:

• Does this stakeholder publish a sustainability report?

The lack of reporting commitments place a stakeholder at a lower score, between 1 and 2 points

• Do they set ESG targets or engage in ESG-related partnerships?

Moderate ESG targets and partnerships, and those on early stages, make stakeholders have an intermediate score (3 points)

• Do they expect sustainability performance from their suppliers or partners? 

Stakeholders with long-standing reporting frameworks will obtain the highest score

5. Size

Stakeholder size is defined by looking at several factors, such as geographic scope or number of employees. In any case, bigger stakeholders usually translate into bigger participation, although it is not always the case. 

• Is this a local, national, or global stakeholder? 

Localized stakeholders might rank significantly lower than multi-scale stakeholders.

• How large is their organization or the group they represent?

Institutional stakeholders, for example, could take an intermediate stance, between 2 and 3 points

• Would involving them significantly expand the company’s DMA coverage?

International stakeholders are more likely to increase DMAS’s coverage (5 points)

6. Relationship

As a reminder that there are exceptions in the stakeholder ranking based on these criteria, size is usually challenged by the type of relationship between the company and the stakeholders. Small stakeholders can make big contributions. To confirm or reject this, figure out the following:

• Do we already work closely with this stakeholder?

• Do they understand the company’s business context?

• Are they likely to collaborate or provide honest feedback?

Key customers and strategic partners are the most likely to rank high according to this criterion.

Conducting stakeholder interviews effectively

Your company is now ready to start with stakeholder interviews. Here is a timeline frame to help with the process:

1. Set the ground for the interviews

Prepare in advance for your interviews with the selected stakeholders. This step is crucial because it would ensure the quality, effectiveness, and potential success of the interviews, and the translation of the obtained insights into your company’s Double Materiality Assessment.

Tip: To effectively prepare for the interview, define the interview goals, questions, and the team to conduct them.  

Before starting the interview with your stakeholders, make sure to ask yourself these questions, and communicate them to the interviewees.

• What is the purpose of the interview? How does the interview connect to CSRD and DMA? 

• Why are the insights of that particular stakeholder valuable for the company and its projects?

• How do you expect to use the stakeholder’s perspective into the projects?

• For which stakeholders does this project prioritize meeting their needs, interests, and expectations? 

• Which stakeholder's interests converge most closely with the project objectives?

2. Reach out to your stakeholders 

Communication is key. When reaching out, be clear about the purpose of the interviews, as well as the context of the project of CSRD and DMA. Stakeholders must know what it is required from them, so that they feel comfortable to share their insights. Transparency enhances trust and ensures active communication and genuine participation from stakeholders.

Tip: Sharing a timeline of the interview process is a valuable move to build this reliance. Think about setting and agenda to align expectations.

• What is the expected duration of the interview?

3. Engage with your stakeholders 

The next step is to purposely engage with your stakeholders. This is the stage where the actual interviews start taking place. At this level, the steps followed before start to gain meaning. Especially setting up a clear agenda and ensuring transparency and trust. To effectively engage with stakeholders, active listening is crucial to understand their workflow and processes, and how they affect your company’s operations and vice versa. 

Tip: Use follow-up questions to develop the idea and paint a detailed picture. This will show your interviewees you are actively involved and listening, improving their engagement. 

Interview scripts and questions

Now you are ready to start with the interview questions.

For Double Materiality Assessment, distinguishing between types of risk and types of impact is particularly relevant. 

Impact questions include:

1. Which sustainability topics do you think the company should focus on in the future?

2. What environmental problems are most urgent in your region or industry?

3. What environmental challenges do you face in your supply chain?

4. How does the company affect local communities or ecosystems?

5. How can we optimize our resource use to support a circular economy?

6. What partnerships or collaborations should we pursue to enhance our waste reduction and recycling efforts?

7. Are there social or governance issues that are important to your organization or stakeholder group?

8. How can we enhance health and safety measures, gender equality, and equal treatment and opportunities in the workplace?

Risks questions include:

9. Which risks or opportunities will have the biggest impact on the company’s financial performance over the next 5-10 years?

10. Which sustainability-related risks (e.g., climate change, regulatory changes) could hurt the company financially?

11. What challenges and opportunities do you see for our company in adapting to climate change?

12. Are there any sustainability trends that could offer new opportunities for the company?

13. How can our energy management practices support our climate change mitigation efforts?

14. How can we enhance social dialogue between management and employees?

4. Follow up the progress with your stakeholders

Staying connected with your network of stakeholders is pivotal for CSRD processes. Here is what your company should do to ensure ongoing engagement after stakeholder interviews:

• Programme upcoming meetings to ensure continuous dialogue on sustainability matters and  make sure that your stakeholders stay involved over time.

• Share updates with stakeholders so that they are informed about how their input contributes to the actual projects. This would strengthen your relationship, which is useful in case you want to reach out again next year to update the DMA. 

• Foster feedback, inviting stakeholders to review and assess how their insights tailored the outcomes. This reflects that their contributions remain relevant, increasing the level of responsiveness, adaptability and transparency of your company. 

Checklist to meet minimum requirements for stakeholder interviews

Meeting compliance with certain minimum requirements is equally important to preparing the questions for stakeholder interviews. These steps include meeting with data protection regulations, terms and conditions, as well as retrieving personal data information. 

Check compliance for General Data Protection Regulation (GDPR)

Stakeholder personal data must be handled in accordance with GDPR. 

Review and agree to Terms and Conditions 

To ensure appropriate use of privacy and confidentiality throughout the whole process, stakeholders must review and agree to terms and conditions. 

Collect email addresses and contact information for effective communication with your stakeholders 

To meet the requirements of follow up and feedback, essential for conducting effective stakeholder interviews and achieving engagement, gathering email addresses and contact details is key.

Common pitfalls to avoid

To efficiently engage with stakeholders through interviews, make sure you optimize the process so that the insights are captured accurately. Achieving this involves being able to translate stakeholder interviews into actionable outcomes. These are some common mistakes to avoid:

Over-generalizing feedback.

The diversity of your stakeholders pools is highly valuable for the broad nature of DMAs, where detail matters. 

Neglecting the use of tools for recording the insights

Stakeholder interviews are likely to be complex. To make sure all the information is stored , recording, transcribing and synthesizing the inputs is key. Using artificial intelligence can be helpful.

Treating interviews as formalities.

Interviews should be a genuine opportunity for dialogue and insight, not just a formality. Failing to provide stakeholders with open communication might negatively impact the interview’s outcome, and the general purpose of CSRD projects on DMA.

Transforming stakeholder interviews into sustainability compliance

Stakeholder interviews have proven to be more than a compliance exercise. They are critical tools to navigate the complexities of Double Materiality Assessments and EU standards. When done right, stakeholder interviews unlock valuable insights for the company’s operations, allowing them to shape sustainability strategies and build long-standing stakeholder engagement. 

What’s next? 

If you want to find out how you can seamlessly engage your stakeholders, collect data and generate audit-ready reports all in one platform, reach out to our sustainability solutions team.

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