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Building Trust: Approaching Stakeholder Engagement

stakeholders2This week, Environmental Leader is presenting a five part series by Jonathan Ballantine entitled “Building Trust in Corporate Responsibility.”

Here is Part Three, “Approaching stakeholder engagement.”

Does an organization choose its stakeholders or does a stakeholder choose an organization?

The first step of any stakeholder engagement exercise is to identify or map out who your stakeholders are. But who chooses who? For some organizations they may not have the ability to choose for themselves. The location, scale and nature of operations will determine who sees themselves as stakeholders. Stakeholders will expect to be recognized when the firm’s effect on them is direct or immediate.

Peter White, Director for Global Sustainability at P&G, succinctly puts it as ¨anybody with an interest or interaction with your business.¨

To get the most out of the engagement process the organisation should have a clear understanding of the reasons for wanting to have open dialogue. The reason for engaging stakeholders will determine the style of engagement and stakeholders’ expectations, all of which could change over time. Select the appropriate engagement approach – this may be focus groups, individual or small group interviews, surveys, formal referrals, key-person meetings, advisory councils or some other.

In December of 2004, Anglo American introduced its Socio-Economic Assessment Toolbox (SEAT) for managing local stakeholder engagement and assessing their impacts. Since then it has been implemented in almost twenty countries at over 80 sites at mines, steel works, paper mills, forests and agricultural enterprises. “It is a means of ensuring that we understand our impacts and the perceptions, concerns and priorities of those around us,”said  Edward Bickham Group Head of External Relations.

Bickham said the toolbox provides Anglo American guidance on how to identify the full range of local stakeholders and appropriate engagement techniques. The output from these engagements is then measured against internal assessments, where gaps are analyzed and then worked on with relevant stakeholders. The operation is then expected to develop interventions to be implemented over the following three years to improve their developmental impacts. The operation then feeds back the outcomes and KPIs through a report to stakeholders. “So pleased are we with the results of implementing SEAT, that we are now rolling out a new toolbox for government relations,” added Bickham.

Entering into engagement with a spirit of respect and openness will increase the opportunities for mutual benefit. When inviting stakeholders to participate, be clear about the degree of influence they will have and commit to it. “Nothing is more likely to destroy trust and discourage future engagement than revealing part way into an engagement process that the key decisions have already been made,”said Paul Burke, Senior Partner, Acona

As part of Intel’s stakeholder engagement strategy, the company has developed a number of tools and processes to provide  ongoing feedback to help the company shape its corporate responsibility strategy and public reporting. Intel conducts annual face-to-face meetings with stakeholders, and generates ongoing discussion through web tools and social media. Intel maintains an e-mail account on its Corporate Responsibility web site, enabling stakeholders to share issues, concerns, and comments directly with members of the corporate responsibility team. Through this e-mail account, the team receives and responds to hundreds of messages from stakeholders each year on a wide variety of topics.

In addition, Intel has launched an external CSR@Intel blog, where members of the corporate responsibility team and leaders discuss their views and opinions, and receive and respond to comments made by other blog participants. To prioritize their stakeholders and their concerns, they look at both the relevance of the stakeholder’s relationship to their business and the importance of the particular issue being raised.

The digital revolution presents a new opportunity for organizations wanting to engage with stakeholders such as consumers or NGOs about sustainability issues. Corporate engagement through social media (such as YouTube, Facebook and Twitter) can be harnessed to great effect – enabling organizations and stakeholders to share opinions, insights, experiences and perspectives with each other.

“It requires a greater investment of time and resources to actively engage with stakeholders – but it’s an investment that ultimately leads to improved decision-making and helps make you a better company,” said Will Swope, Vice President of Sustainability at Intel.

The key to success in harnessing social media to drive green messages are authenticity, participatory and ubiquity. Companies that are committed to real, embedded sustainability have already accepted these virtues, as they are key components of stakeholder engagement.

¨The digital economy is shifting the power in society – bringing with it a new era of transparency,” said Santiago Gowland, Vice President of Brand Development and Global Corporate Responsibility at Unilever.

In order to be effective stakeholder engagement cannot be a bolt on – it has to be part of the DNA. Remember that dialogue means two parties conversing. Cultivate the capacity for listening.

Here is Part One of the series. Here is Part Two.

Jonathan Ballantine is a European-based business engagement specialist – advising private sector firms, business consultants and NGOs on corporate responsibility issues, including brokering collaborative partnerships between business and NGOs, stakeholder engagement and outreach communications.

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