Stakeholder engagement: imperative for your triple bottom-line
Article written by Marana Brand, Stone Consultant
Your company has an impact on the lives of many people and organisations. All of these people and organisations are your stakeholders – they have a stake in your company’s financial, environmental and social performance (triple bottom-line).
Engaging with your stakeholders is a key part of corporate social responsibility (CSR) and achieving the triple bottom-line. Companies should therefore, engage with their stakeholders in dialogue to find out what social and environmental issues matter most to them, in order to improve its decision-making and accountability. Your stakeholders can be the following:
- Your customers
- Affected communities
- Suppliers/contractors/service providers
- Activist groups
- Employees (contract/permanent/temporary)
Your relationship with each group of stakeholders varies considerably. You therefore, have to adapt the way you engage with each of them to mitigate risks to your business. Systematically engaging with every group of stakeholders when you identify and manage what may impact them negatively, helps to build trust, credibility and local support. Engaging with these groups, also gives your company the opportunity to highlight all the positive outcomes your company’s presence could allow. This may lower the risk of some stakeholders taking action against the company, which could lead to costly law suits and/or disruption of your company’s business.
Stakeholders like NGOs or activists like preservation groups, may not be directly affected by what the company does, but may have an interest in that. These groups should be kept informed and ongoing effective communication should be maintained to lower the risk of bad publicity for your company.
Internal stakeholders, like your employees, should also be consulted on possible impacts on their lives. They should be involved in planning and developing plans, and communication with them should be open and ongoing. How the company engages with its employees will, however, differ from how it communicates with external stakeholders. How to communicate with your stakeholders:
- Identify all stakeholders. After the company’s risk and all possible negative impacts have been assessed, stakeholders who could be affected, should be identified.
- Prioritise the stakeholders. Identify which groups you will have to engage with first, based on how severe they may influence your business. Groups that will be greatly affected, as well as stakeholders who have the ability to damage your company in whichever way, should be communicated with stronger and more frequently.
- Tailor your communication strategy on how to effectively engage with these stakeholders after steps 1 and 2 have been completed.
- Engage with all stakeholders regularly and honestly, but also allow them to give input and voice their concerns.
You can develop a rather simple engagement plan, but it is imperative to stay one step ahead of everything and address the most important social and environmental issues first. Even if you think that your business doesn’t really impact the community or environment in which you do business, you should at the very least, set up a communication platform for the public to comment and/or make suggestions so you could include that in your management plan. You should also make an effort to keep them informed continuously about possible impacts, but also potential benefits.
Groups that will be impacted severely by the presence of your company, will need a more in-depth engagement plan, allowing information to be exchanged between yourself and these groups on a regular basis. This way you can develop a strong relationship with them and build trust early on.
These stakeholders should be involved in the early stages of the company’s management and operational plans, so their proposals can be included in the company’s planning going forward. Because you will then have your finger on the pulse from the beginning, you will be able to identify possible red flags early on and could then address them timeously.
Effective communication with the most important stakeholders, like the communities in your vicinity, should include the following:
- Start early
- Give meaningful and accurate information
- Be culturally appropriate e.g. engage with people in places in their own communities where they feel comfortable
- Give opportunities for two-way communication
- Record and keep track of issues raised
- Report back on how their concerns and suggestions have been incorporated and/or addressed
- Take responsibility and be open and honest at all times