This report reviews existing resources and proposes 10 principles for effective, sensitive and appropriate engagement with consumers experiencing vulnerability by essential services regulators through a 'universal' and 'inclusive' approach.

The report has been prepared for the Essential Services Commission (the commission) as part of its one-year project to develop a consumer vulnerability strategy. The proposals in this report also build on the commission's Charter of Consultation and Regulatory Practice and Stakeholder Engagement Framework.

Consumer vulnerability has received increasing attention from Australian regulators and regulated businesses in recent years. There has been growing discussion of the role of markets in creating or exacerbating vulnerability - meaning 'harm, detriment or disadvantage' - and the role of regulators in addressing this.

The concept of 'vulnerability' has evolved over time, moving from a definition based on static and defined categories of 'vulnerable consumers' to a definition that recognises that vulnerability is complex and flexible, and is a consequence of one or more structural, individual and market-based circumstances. Major events like the 2019-20 Australian bushfires and the COVID-19 pandemic have heightened awareness that vulnerability can affect all consumers and highlighted the need for a coordinated response to consumer vulnerability.

Engagement directly with consumers experiencing vulnerability and those who represent and/or work with them, is essential for understanding and promoting the interests of this diverse and dynamic consumer group. Consumer engagement can bridge the gap between regulators and the community and bring value and legitimacy to regulatory processes and outcomes.

Regulators' standard approaches to engaging with stakeholders (including consumers) may not be designed to ensure that all consumer perspectives are heard and considered, especially in times of disruption or more widespread health or economic crisis. In addition, if engagement is not designed and conducted sensitively and appropriately, it may exacerbate existing vulnerability and negatively affect consumers' wellbeing.

To be effective, consumer engagement must be accessible, available and appropriate for the full range of current and potential consumers of essential services