Principles Stakeholder engagement Stakeholder engagement is an open dialogue process with people or groups who actively engage with an organization and are influenced or impacted by its current or future activities. Engagement mechanisms range from surveys and questionnaires to forums, stakeholder dialogues and advisory committees. Reporting on stakeholder engagement should demonstrate a robust process and reflect a company’s understanding of and response to stakeholder needs. Key recommendations Identify the organization’s main stakeholder groups – such as investors, customers, employees and local communities – ensuring they cover the entire value chain. Disclose the formal engagement mechanisms used to engage with identified stakeholder groups. Outline the needs of specific stakeholder groups and provide evidence that their basic needs and interests have been considered and, where appropriate, acted on. Methodology notes A centralized narrative on stakeholder engagement and clear evidence of what issues of concern specific stakeholder groups raise (as opposed to a broad overview of stakeholder responses). Stakeholders are identified from across the entire value chain. Of the reports we reviewed: Drax Group Drax Group’s Annual Report 2024 highlights the company’s comprehensive and systematic stakeholder engagement activities and positions them as central to business decision- making and strategy. It identifies six main stakeholder groups: workforce, shareholders and investors, government and political bodies and regulators, customers and suppliers, and communities. For each group, it identifies the specific issues and risks the company aims to address through its engagement mechanisms. These include climate change, the cost-of-living crisis, financial and operational performance, biomass sustainability, energy security and environmental justice. It uses case studies to demonstrate how engagement took place, along with outcomes and next steps. The case studies highlight the specific needs of target groups and how it understood, managed or addressed these needs as part of the engagement, including relevant evidence. For example, Drax set up an Independent Advisory Board with experts to both advance and scrutinize its climate, nature and people-positive agenda. The board provided feedback on sourcing practices and community engagement plans, among other topics, bringing an independent perspective and rigor to this work. In another example, Drax founded a space for employee wellness called the “Muckers” well-being hub – created in response to employee feedback calling for a safe space onsite for health monitoring, resource sharing, relaxation and mental health support. By highlighting the key issues relevant to stakeholders, as well as actions taken following their feedback, Drax is able to show how the company takes stakeholder feedback into account and integrates it in business as usual. % include a detailed discussion of stakeholder engagement, identifying key stakeholders across their value chain and how the company engages with each group. Their reports also include a narrative on feedback received and how the company responds to this feedback. 0 1 2 3 4 5 6 5 0 1 2 3 4 5 6 4