Sustainability
Bursa Malaysia has always advocated corporate responsibility as key to sustainability. Today, sustainability, which supports stakeholder value creation, should be the main focus of every responsible company.
Tip of the Week: Approximately only 10 percent of every landfill can be cleaned up.
Stakeholder Engagement
Stakeholder Engagement Process
A robust and effective stakeholder engagement comprises of five steps:
Stakeholder Engagement Process1
Identify stakeholders
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:
By responsibility
Existing or future legal, financial and operational obligations as stipulated in regulations, contracts, policies or codes of practice
By influence
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
By proximity
Individuals or groups involved in daily operations or live within the vicinity of an organisation's operations
By dependency
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
By representation
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 concerns
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.
Prioritise and Map
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:
Level of support required
Refers to the amount of input or effort needed from the stakeholders to carry out sustainability activities and resolve sustainability issuesDegree of influence
Refers to the amount of decision making power the stakeholders have on sustainability issues faced by the companyLikelihood of occurring
Likelihood of the stakeholders using their influenceImpact of issues to stakeholders
Sample Stakeholder Prioritisation Matrices
Engage
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.
Inclusivity of relationship
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.
Review and Report
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.
Useful reference materials produced by AccountAbility, UNEP and Stakeholder Research Associates:
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
Download
http://www.accountability.org/about-us/publications/the-stakeholder.html
1 PricewaterhouseCoopers
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