Which of the following correctly fills the gaps in the paragraph below? Under the ESRS, engagement with affected stakeholders is a core element of…

Under the ESRS, engagement with affected stakeholders is a core element of due diligence. The

outcome of the due diligence process informs the materiality assessment. The ESRS encourage

further engagement with stakeholders to collect their input and feedback on the organization's

conclusions regarding the material impacts, risks, and opportunities.

This sequence is supported by the official text of Commission Delegated Regulation (EU) 2023/2772

and various ESRS-related documents. The standard emphasizes due diligence as a starting point for

the materiality assessment process. The assessment then determines the organization's material

impacts, risks, and opportunities, which is crucial for effective stakeholder engagement.

Due Diligence: The ESRS process starts with due diligence, as outlined in the Commission Delegated

Regulation (EU) 2023/2772, to identify relevant sustainability matters and affected stakeholders.

Materiality Assessment: The findings from the due diligence process are then used to inform the

materiality assessment, as discussed in EFRAG's guidance documents.

Material Impacts, Risks, and Opportunities: Finally, the organization engages with stakeholders to

review and refine its conclusions about material impacts, risks, and opportunities, as per the ESRS

requirements.

Reference:

Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive

2013/34/EU​

EFRAG Guidance on Materiality Assessment in ESRS​​

ESRS Due Diligence Framework, as outlined in Compilation Explanations and Mapping Sustainability

Matters with Disclosure Requirements​​

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