Triple Pundit: So Your Company has a Stakeholder Team, Now What?
Stakeholder engagement is a critical process that helps companies build credibility, improve performance, and get out ahead in addressing emerging environmental, social, and governance issues. It is a key expectation for 21st century corporations and is mainstream practice. In a competitive and austere business environment, leading companies need to know how to get the most value out of these engagements. Ceres, which has led corporate stakeholder engagements for more than 20 years, offers the following advice for companies looking to make the most of their engagements:
- Get the right stakeholders to the table: Who is involved is critical to the credibility and effectiveness of any stakeholder engagement process. The company should systematically identify and engage stakeholders who have expertise in key areas of social and environmental impact, and an understanding of various business lines, geographies, and the supply chain. For example, Vancity uses stakeholder mapping to identify key stakeholder groups and determine the appropriate form and level of engagement with each.
- Talk about what matters. Engaging with stakeholders on the issues of greatest importance to the company and to stakeholders generates better, richer, and more robust outcomes for all involved. By addressing key material issues, the company can establish credibility, better understand their key environmental and social impacts, proactively identify risks, and leverage the expertise of stakeholders to generate innovative solutions to sustainability challenges. Companies like Ford and Vodafone use materiality matrixes to help them determine what issues are worth talking about. Others use stakeholder interviews and feedback from analysts and sector experts to determine what matters to stakeholders and use that information to ensures efficient use of stakeholders’ considerable expertise and time.
- Use appropriate channels. Once the company has determined what is worth talking about and with whom, they need to think about the best vehicles for fostering active, transparent, and quality engagements. As we all know, there are a plethora of forums and tools for engaging diverse audiences. For example, Seventh Generation uses a portfolio approach, which includes a combination of conference calls, in-person meetings, surveys, and online communication tools, such as blogs and social media platforms. This approach allows the company to reach a range of stakeholder groups and get the most from stakeholders’ diverse perspectives.
- Speak to the street. Investors are paying attention. They represent a key group of stakeholders that the company should engage around sustainability issues in a proactive and candid manner. For example, clear discussion of sustainability risks and opportunities in annual meetings, quarterly earnings calls, and financial filings is becoming more mainstream and allows companies like Exelon to highlight their efforts to addresses key social, governance, and environmental challenges with investors.
- Demonstrate commitment and accountability. To ensure productive, long-term engagements, stakeholders need to know that the company is committed to thoughtful consideration of their feedback and that stakeholder engagement influences corporate strategy and decision-making processes. Leading companies demonstrate commitment and accountability in two ways. Companies like Bank of America and Dell disclose how they’ve integrated stakeholder feedback into their business strategy processes or are explicit about the rational for not doing so. Other companies, such as Bloomberg, involve senior executives in stakeholder engagement, which demonstrates high-level commitment to sustainability. Involving executives also gives key company leadership a first hand understanding of stakeholder concerns and how they align with the company’s business and sustainability priorities.
Stakeholder engagement is no longer a public relations afterthought, but rather a core competency. It is a key expectation in the Ceres 21st Century Corporation Roadmap for Sustainability – a framework that features twenty standards and expectations that help guide corporations to be able to address their most pressing emerging social and environmental risks. To thrive in the resource-constrained economy of the 21st century, leading corporations must learn to get the most out of their stakeholder engagement and integrate this tenant of sustainable business into the DNA of the company.
Kate is a Manager of the Corporate Program and is responsible for advising Ceres member companies on sustainability strategy, reporting, and stakeholder engagement. She facilitates dialogues between companies and their stakeholders to foster corporate sustainability. Kate works with companies in the electric utility and consumer product sectors.