Engagement strategy

The first step in stakeholder engagement is to build a strategic vision for engagement and to make a strong business case for the value of building stakeholder trust. The authors note that stakeholder engagement is a fundamental component of materiality assessments that inform sustainability strategy, reporting, and disclosure. The report suggests that without input from key stakeholder groups, any approach to sustainability will be limited by an organisation’s self-interest and inward focus.

Stakeholder mapping

The second step is to identify and prioritise stakeholders and select engagement mechanisms. The report notes that there is no magic list of stakeholders, and the final list will depend on an organisation’s business, its impacts, and its strategic vision. Stakeholders’ views (employees, customers, community, etc.) are gathered using a variety of methods, including surveys, meetings, and social media, to discern risks and opportunities to mitigate the negative and enhance the positive impacts the organisation has on society.

Preparation and engagement

The next step involves preparation and engagement. The preparation process will bring insights gained through the stakeholder mapping process to fruition, while ensuring that the engagement itself supports continued dialogue with those who are most important to the business: its stakeholders. Gathering a cross-functional group of internal participants will engage in this process, identifying sources who may have important perspectives on the issues and consult for input and participation.

Core engagement principles

The authors provide a list of core engagement principles that guide this process. The UN Guiding Principles on Business and Human Rights have provided us with a definitive approach for engagement based on impact on rightsholders. Building mutual trust between companies and stakeholders has grown much more pressing, given reduced public trust. Candid engagement means listening as well as sharing and using an engagement approach that is culturally sensitive and accessible to all participants.

Action plan

The final step is developing and implementing an action plan, which is the key aim of translating insights and agreements from the engagement into deeds. This step involves creating a clear action plan with distinctly separate consideration of next steps and outcomes for both external and internal stakeholders. A public reporting document should be made to demonstrate how engagement activities and stakeholders affected the business strategy or operations and their lives.

Recommendations

One of the core recommendations of the Five-Step Approach to Stakeholder Engagement is the need for companies to build a strategic vision for engagement, identify and prioritize stakeholders, and select appropriate engagement mechanisms. Companies need to ensure that they have identified the right stakeholders, and that they engage with them candidly and transparently in ways that are culturally sensitive and accessible to all participants. Finally, companies should ensure that they implement an action plan that addresses all the issues raised in the engagement process.

The report emphasises that stakeholder engagement is a fundamental component of materiality assessments, which are then used to inform sustainability strategy, reporting, and disclosure. Without input from key stakeholder groups, any approach to sustainability will be limited by an organisation’s self-interest and inward focus. The authors recommend that companies engage candidly and transparently with all their stakeholders and use culturally sensitive and participatory methods to ensure that the engagement process is accessible to all.