A robust and effective stakeholder engagement comprises of five steps:
Stakeholder Engagement Process1
Identification of key direct and indirect stakeholders is largely influenced by the role of stakeholders and the impact that they have on the organisation and the nature of the relationship. The various dimensions for organisations to consider during stakeholder Identification are demonstrated below2:
Existing or future legal, financial and operational obligations as stipulated in regulations, contracts, policies or codes of practice
Individuals or groups that at present or in the future can influence an organisation's ability to meet its objectives or hamper its actions. These can include those with informal influence and those with formal decision making power
Individuals or groups involved in daily operations or live within the vicinity of an organisation's operations
Individuals or groups that are most dependent on your organisation such as employees for their livelihood, customers for their products, suppliers for their raw materials
ndividuals or groups either through formal representation or traditional structure of a society entrusted to act as representatives e.g. members of parliament, heads of a local community, trade union representatives, councillors, representatives of membership based organisations
Identify the needs and expectations of relevant stakeholders by conducting surveys, organising industry panels or associations, obtaining direct feedback and engaging independent stakeholders through focus group sessions.
Although there are common sustainability issues faced by most businesses, different stakeholders will have varying levels of interest in an issue hence, organisations will need to prioritise stakeholders based on the level of importance and impact to the business.
Determine importance of issues to each stakeholder and determine urgent course of action.
Organisations will have to factor different considerations during prioritisation to ensure they engage the key stakeholders relevant to their business. Here are some factors to consider:
Sample Stakeholder Prioritisation Matrices
Select and utilise the right engagement approach for each stakeholder group.
Stakeholder engagement encompasses relationships built around one-way communication, consultation, dialogue and partnerships. Organisations need to understand the risks and opportunities of each engagement method and ultimately, decide on a method that will meet both the organisations' objective and stakeholder needs.
Figure 4.2 Stakeholder engagement methods 3
Companies embarking on stakeholder engagement should be prepared to address conflicting views and issues raised by the different stakeholders. Both Directors and Management should discuss on possible resolutions for pertinent issues raised. Good practice companies ensure that feedback is given to stakeholders.
Implement plans and report on the outcome of the engagement. Changes are then embedded into subsequent plans, as well as to improve on the current implementation and monitoring of sustainability initiatives.
Decisions and outcome of actions from the engagement process are then reported to provide assurance or general stakeholder verification on the engagement.
The Stakeholder Engagement Manual (Volume 1): The guide to practitioners' perspectives on stakeholder engagement
The Stakeholder Engagement Manual (Volume 2): The practitioners' handbook on stakeholder engagement
2 Stakeholder Research Associates Canada, UNEP and AccountAbility, "The Stakeholder Engagement Manual", 2005
3 PricewaterhouseCoopers and adaptation from Stakeholder Research Associates Canada, UNEP and "The Stakeholder Engagement Manual" 2005