It is impossible to discuss Sustainability without stakeholder engagement. In a sense, stakeholders’ demands justified the necessity for sustainability. These demands prompted the development of the notion of sustainability.
According to the Global Reporting Initiative (GRI) Standards, a stakeholder is an individual or group that has an interest that is affected or could be affected by the organisation’s activities. Such individuals/groups include and are not limited to business partners, civil society organisations, consumers, customers, employees and other workers, governments, local communities, non-governmental organisations, shareholders and other investors, suppliers, trade unions, and vulnerable groups.
Stakeholders can be grouped into two categories: internal and external. Internal stakeholder groups include those who are directly affiliated with the company, such as management and employees, the board of directors, and occasionally investors, partners, and consultants, whereas external stakeholder groups include those who are not affiliated with the company, such as customers, government, local communities, NGOs, academia, and so on.
Some stakeholders are more important to the organisation than others, as a result, two types of stakeholders exist – primary and secondary stakeholders. Primary stakeholders, who are more important to the organisation, have a bigger stake in its ongoing operations than secondary stakeholders, who are on the outskirts. For different organisations, this differs; if Company A specialises in services, its primary stakeholders differ from that of Company B, a manufacturing firm. Thus, the onus rests upon the organisations to determine based on their industry or individual standards who their primary or secondary stakeholders are.
Stakeholder engagement therefore can be defined as the process by which a corporation connects and communicates with its stakeholders to achieve agreed-upon goals. The purpose of stakeholder involvement and management is to maximise beneficial influences on projects, organisations, or partnerships while minimising negative influences. Stakeholder involvement allows businesses to connect their practices with social needs and expectations, which helps to ensure long-term sustainability.
The following processes, which could also function as stakeholder strategies for organisations, are required to create successful stakeholder engagement that will assist build the connections and trust necessary to develop and implement corporate sustainability policies and initiatives.
Identify stakeholders: Stakeholders are an important source of information for sustainability plans, goals, and organisational capabilities. Determine which internal and external stakeholders will be involved and divide them into primary and secondary categories as needed. You need not involve all classes of stakeholders as earlier mentioned – only those who affect your business. Again, this differs based on industry and organisational standards.
Align the organisation’s sustainability objectives with the objectives of key stakeholders: A materiality assessment is another term for this. Organisations learn which sustainability issues are relevant to certain stakeholder groups and why. At this point, companies may research and gain an understanding of their capabilities and the potential resources that they can provide. This method allows the most important efforts to rise to the top, resulting in more smart sustainability programming.
Meet your stakeholders: Schedule a meeting with stakeholders to express your organisation’s goals, outline your objectives, and discuss how you might collaborate for mutual benefit.
Ask questions and listen to feedback.
Follow Up: Evaluate and respond to stakeholder feedback. Address any questions or concerns.
Integration: Where appropriate, integrate feedback and collaborate on activity implementation.
Please note that stakeholder engagement is a continuous process and does not have to be done to the detriment of the organisation involved – considering its range of stakeholders and the difference in their needs. Therefore, companies should approach stakeholder engagement in a strategic manner such that it fulfils both their interests and that of the stakeholders as appropriate.
The benefits that await companies with effective stakeholder engagement and management include and are not limited to:
- Education – It helps you understand stakeholder perspective and have a competitive advantage!
- Improved Decision Making – The knowledge gained will assist you in making better-informed decisions.
- Trust – When you communicate with stakeholders, you are demonstrating that you respect their input. This contributes to the development of goodwill.
- Saves Cost – Stakeholder participation helps to prevent project delays by removing bottlenecks.
- Risk Management – Individuals and groups may be able to assist you in identifying possible hazards before they become a threat to your project or company.
- Accountability – In the end, improving accountability within your own business as well as with external audiences requires connecting with groups and individuals.
As a Consulting and Advocacy organisation, we’ve seen relationships go sour because the parties involved refused to follow the appropriate process when it came to engaging their stakeholders, do not make the same mistakes. The GRI Standards is an important tool for sustainability reports and its disclosures itemise useful processes for stakeholder identification, engagement and management in Sustainability Management with elements such as G4-24, list of identified stakeholders; G4-25, basis for identifying stakeholders; G4-26, approach to stakeholder engagement; and G4-27, key topics and concerns by stakeholder.
Are you interested in a GRI Standards Certified Sustainability Reporting training? CSR-in-Action will be holding a physical training between Wednesday 25th, to Thursday, 26th May 2022. For more information, please reach us at email@example.com or call 09062634122.