CSR Stakeholders – Who are they? How to engage?

Stakeholders: Usually thought of as a corporate term used to define employees and investors most affected by a decision.  While true, this view only represents a very small slice of the total spectrum.  Sustainable business expands the traditional view of stakeholders .

Direct stakeholders are defined as any person, group, or entities that have a direct relationship with your company and its products or services.  These include:

Financial Stakeholders:

• Shareholders – Returns
• Partners – Investment
• Employees – Job status
• Customers – Delivery and quality of product
• Suppliers/Contractors – Contracts

Social Stakeholders:

• Local Communities – Impact to way of life
• Friends/Family – Personal welfare

Environmental Stakeholders:

• Natural Environment – Change to current state
• Non-human species – Impact to way of life

Indirect stakeholders are persons, groups, or entities who have a stake in the outcome, but don’t necessarily have a direct relationship.  These include:

Financial Stakeholders:

• Investment Community – Financial impacts
• Industry Peers – Implications to similar situations
• Trade Organizations – Implications to business segments

Social Stakeholders:

• Government – Legislation
• Civil Society – Impact to way of life
• Media – News reports

Environmental Stakeholders:

• Environmental Organizations – Legislation, eco awareness
• Future Generations – All of the above

Something to remember: Anyone who thinks they are a stakeholder – Is a stakeholder.  Also, it’s important to know which stakeholders are key on which issues.

Some have viewed stakeholders as opponents.  However, stakeholder engagement is more than just obtaining buy-in from employees and investors.   Stakeholder engagement is a way to capture value through proactively acknowledging and addressing the underlying needs and concerns of those impacted by a particular situation.  It includes:

• Strategy and Leadership: understanding strengths to promote innovative ways to create positive change and add value to a financial situation, social interests, and eco awareness.
• Business Integration: improve business practices to drive strategy, educate, and link internal and external groups.
• Risk Management: assess, prioritize, monitor, and address emerging issues
• Communication: provide a direct link from decision makers to the key issues and opportunities.

Evidence has shown that early stakeholder engagement is critical to a company’s ability to capitalize on its sustainability initiatives, product stewardship, reputation, and overall business sustainability.  Ideas include:

Supply Chain: Take a step beyond supplier metrics scorecards and supplier metrics.  Integrate supply alliances into the front-end of the design process to ensure alignment and value for material selection, process efficiency, and product quality.

End Customers: Move past simple feedback tools such as consumer surveys.  Capture consumer preferences and expectations by actively engaging consumers on sustainability concepts that directly impact business direction, planning, and product development.  Move the consumer touch-point forward into the initial design.

Community: Business sustainability includes recognition that a company and the community in which it operates are closely and strategically linked.  Early engagement with the community is essential.

The key to successful stakeholder engagement is real, authentic and open communication that builds trust.