Engagement with affected stakeholders lies at the heart of HREDD, but doing it well is complex. This Stakeholder Engagement Guide is designed to help investors evaluate how well their portfolio companies engage with affected stakeholders or rights holders - the people most at risk from business activities. Grounded in leading standards, it introduces four Pillars and seven Effectiveness Criteria.

Grounded in leading standards

An analysis of the following stakeholder engagement standards and the organization of their content into four pillars serve as the foundation for this Guide:

​✓  TNFD’s Guidance on Engagement with Indigenous Peoples, Local Communities and        Affected Stakeholders (2023)
✓  OECD’s Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector (2017)
✓  AccountAbility's AA1000
Stakeholder
Engagement Standard (2015)
✓  IFC’s Stakeholder Engagement Guide: A Good Practice Handbook for Companies Doing Business in Emerging Markets (2007)

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The Financial Materiality of Stakeholder Engagement 

The tragedies of the 2013 Rana Plaza factory collapse and the 2020 destruction of the Juukan Gorge cultural site in Australia are emblematic of how poor engagement with affected stakeholders can lead to societal and environmental harms that carry financial consequences. Both cases led to public outrage and a reckoning for the companies and investors involved. Early meaningful engagement with rights holders isn’t just a human rights best practice—it’s a strategic advantage that helps companies:​

Identify and
​prioritize risks

Design more effective mitigation & grievance mechanisms

Avoid legal, reputational, and operational costs

Build trust and long-term stabililty

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