As organisations are increasingly being called to account for their environmental and social impact, creating an ESG strategy and investing in sustainability programmes is not optional anymore, but expected.
Over 90% of S&P 500 listed companies already have sustainability reports published every year, according to the PRI. And new regulations around ESG are quickly arising on a global scale.
But there’s a crucial element to developing and implementing sustainability and ESG strategies successfully: stakeholders.
Planning an ESG strategy (and determining which Sustainable Development Goals your organisation wishes to focus on) will require you to engage with your internal and external stakeholders throughout the sustainability process.
- Why stakeholders are important in sustainability efforts
- ESG strategy assessment
- How to include stakeholders in your ESG strategy
- ESG communication planning
- Stakeholder engagement methods
- ESG strategy and communication principles
Why stakeholders are important in sustainability efforts
Stakeholders play a vital role in sustainability. Why? Because an ESG strategy requires management systems for risk and performance improvement. And stakeholders are a central component of risk management.
By conducting stakeholder engagement and sentiment monitoring you will be able to identify and prioritise environmental and social issues that must be addressed, as well as develop solutions that meet their needs.
Additionally, stakeholders can serve as a powerful force for change within an organisation. They can help to raise awareness of sustainability issues and encourage others to get involved in the effort.
Ensuring that everyone has a voice and that your ESG agenda reflects the priorities of those who matter will support the long-term success of your strategy.
ESG strategy assessment
Before start engaging with multiple stakeholders, you must determine the purpose of this engagement by conducting an assessment.
This assessment approach consists in identifying and prioritising the sustainability issues that are most important for your organisation and your stakeholders. This process – also called a materiality assessment – when well-executed can really help focus your sustainability reporting efforts.
Your materiality assessment should be aligned with the organisation’s overall corporate strategy and help prioritise business risks and opportunities.
How to include stakeholders in your ESG strategy
Based on the scope of this assessment, you will then identify the key stakeholder groups to evaluate the ESG issues together.
When determining which ones to include, analyse the risk and opportunities associated with each one of the stakeholder groups. First, understand your stakeholders' expectations, as well as their motivations, influence - and the risk if the engagement is not achieved.
Apply the stakeholder mapping method to best evaluate these risks and opportunities associated with your key stakeholder groups.
Here are a few stakeholder groups you may want to consider in your assessment:
- Local communities
- Employees
- Trade associations
- Board of directors
- Customers
- Shareholders
- Public agencies
- Non-profits / NGOs
- Suppliers
Once you have narrowed down your list of stakeholders, create a stakeholder engagement plan to communicate with them.
ESG communication planning
Take the time to create a solid communication plan and all the materials that will be required, as well as schedule the engagement activities.
Planning and scheduling will help you work more efficiently as you won’t want to forget to send out a survey or invite your stakeholders to an event.
Using a stakeholder engagement system can make all the difference at this stage to keep you organised and focused on your engagement activities.
Stakeholder engagement methods
The best engagement approach to each stakeholder group will vary depending on the issue at hand and the relationship you have with the individual or group.
This approach must be aligned with the purpose of your assessment. What sort of engagement will you be looking for?
If you are planning on exploring one-way engagement, you can use surveys for example. For two-way engagement, you can leverage focus groups and workshops.
There are several stakeholder engagement methods you can test and select the most effective ones for your stakeholders.
ESG strategy and stakeholder communication principles
There are some general principles that can help ensure effective communication about sustainability issues:
- Be clear about your goals and objectives
What is your organisation trying to achieve? Why is this important? Be sure to communicate these things clearly to your stakeholders.
- Listen more than you talk
It's important that you allow stakeholders to share their thoughts, concerns, and ideas. Only by listening can you truly understand what they care about and how they want to be involved.
- Be open to different perspectives
Not everyone will see eye-to-eye on every issue. Dealing with difficult stakeholders and understanding why they may have different views is an essential step to building positive relationships. Be respectful of different opinions and willing to compromise when necessary.
- Keep the lines of communication open
Once you have engaged with your stakeholders, make sure you keep them updated on your progress and welcome their feedback along the way.
Conclusion
As you can see, stakeholders are vital to the implementation of your sustainability strategy and are essential partners in achieving sustainability goals.
If you’re ready to start on your ESG journey, discover all the benefits you can have from using a proper stakeholder engagement tool like Tractivity. Explore our features or get in touch today for a free demo of our system.
