Although sometimes seen as a secondary task, companies today understand that thoughtful and regular stakeholder engagement is a worthwhile investment. Stakeholder engagement can be time-consuming, it requires internal planning and coordination (even in its most organic form), and it’s not always easy.
When approached with the right angle, however, the benefits of stakeholder engagement, as a practice or as part of a reporting initiative, can be felt both within and beyond organizational walls, creating a virtuous cycle: Establishing a regular dialogue and demonstrating business transparency will also attract investor attention, while involving your teams throughout the process will strengthen buy-in, enhancing ownership and productivity in turn.
To achieve efficient and meaningful stakeholder engagement that a) matters to internal and external stakeholders and b) is optimized for greatest ‘ROI’ (especially when the goal is to communicate collected information through CSR/sustainability reporting), there are some general best practices to keep in mind:
1. Build a regular cycle and map out a stakeholder engagement plan
Avoid engaging with stakeholders to ‘tick the boxes’. Doing so will only result in inefficient and uncoordinated actions far below their collective potential. Instead, engage with purpose, regularly and with manageable goals in mind.
While you can make it a point to communicate your availability and openness to answering questions (i.e. by extending the contact details of relevant team members), you can also outline a more formal approach through quarterly calls or bi-annual surveys. If possible, draw up a comprehensive ‘stakeholder engagement plan’, to be carried out according to agreed timelines. What team members will be involved? What are the main goals and outputs? What engagement methods will be used (data collection and analysis)? Who are the target stakeholders and why?
2. Get to know your stakeholders
Listing and profiling the stakeholder groups you expect to target is critical when preparing and engaging in any type of stakeholder interaction. This is especially the case when one of the goals is to collect information to report according to any of the commonly used CSR reporting frameworks. What data are you requested to disclose on and what added value can stakeholders bring? How are you going to analyze collected data? Do you need to construct a materiality matrix?
When designing online surveys or personal interviews with stakeholders for instance, technical language and questionnaire topics will need to be adapted according to your stakeholders’ profiles (internal, external, client, employee, shareholder, civil society representative, etc.).
In addition, being able to explain why you are targeting each identified stakeholder group or not, is just as important, as you may be required to report on this: the GRI G4’s standard disclosures on stakeholder engagement for instance, ask organizations to ‘describe the organization’s process for defining its stakeholder groups, and for determining the groups with which to engage and not to engage’ (G4-25).
3. Keep track of your progress
Once you’re ready to start reporting, you’ll be thankful you kept track of the main steps taken by each team or individual involved in the process. When it comes to stakeholder engagement, the most well-known sustainability reporting frameworks will require you report on the rationale behind key decisions, processes and initiatives (i.e. ‘the organization’s approach to stakeholder engagement’), in addition to more straightforward quantitative data, such as ‘frequency of engagement by type and stakeholder group’ (GRI G4-26).
4. Aim for overall efficiency
If you’ve designed a plan and timelines to engage with your main stakeholder groups, the trick is to leverage this coordination effort to produce a number of complementary outputs, both tangible and intangible. Assuming you have senior-level buy in, it’s likely you’ll be speaking to some of your largest clients, so why not start the conversation by introducing the main aspects of the corporate CSR or sustainability strategy? Are there any new developments to share? This will help break the ice, demonstrate transparency and frame the stakeholder engagement initiative within the long-term goals of the organization.
In this great report on ‘the essentials of materiality assessment’, KPMG also reminds us that existing stakeholder engagement initiatives, such as employee or client satisfaction surveys, are a good source from which to leverage information.
In short, be practical. Focus groups might be a great way to collect information from locally-based stakeholders, while it will make more sense to quiz employees spread across several offices through an online survey.
5. Engage with purpose and report on material issues
In the same spirit of efficiency, design your stakeholder engagement methods with your reporting and communication goals in mind. Focus on collecting the information you will be required to disclose on (i.e. the GRI G4 guidelines request organizations to ‘report key topics and concerns that have been raised through stakeholder engagement’) and ask questions that aim to determine what environmental, social and economic aspects are material to your stakeholders. An opening question to get stakeholders talking about materiality could be: When thinking about – name of company -, our sustainability performance, the services we provide, and the values we represent, what are the topics you care the most about? Why so?).
When it comes to data analytics for better decision-making, knowing what data you need is just as important understanding where it will end up and ultimately, what purpose it will serve in its final form. Stakeholder engagement for sustainability reporting is no different: a precise, deliberate and thoughtful approach will yield more efficient, targeted and insightful results.