Practicing sustainability is a collaborative process. It is a journey one does not venture into on their own. Sustainability makes an impact on multiple fronts, from environmental change to social transformation. For a business to make a lasting impact, their sustainability strategy must involve voices across all relevant fronts.
Stakeholder management is an essential part of sustainability. Without it, a strategy will not reach its full potential. Engaging stakeholders, involving them in plans, and considering their needs and role in your business fosters effective ideas. By keeping stakeholders involved, a business is able to measure the quality of their performance and how it impacts those at stake.
A business thrives when its relationships with stakeholders are well-maintained. With sustainability becoming a key factor in decision making, engaging with stakeholders and listening to their concerns is one step in building a sustainable business.
Here is how you can build strong relationships with your stakeholders.
Stakeholder management is a long, continuous process that requires meticulous planning. To build and maintain these critical relationships in your business, you need to first understand the key players. Each business has a variation of stakeholders depending on their product, service, industry, sector, and other factors like its size and structure. While each stakeholder group has a role to play, its influence on the company varies. Thus, some stakeholders are prioritized more than others when crafting an effective sustainability strategy.
To know your stakeholders, one should know their business first. Who are the decision makers? Who brings the goods and services to life? Who are the customers? Factoring sustainability as well during this discovery process, it is good to consider the communities that may be affected by the company’s environmental impact or by their social impact ranging from labor to community development. By identifying stakeholders and understanding their role in the business and how the two parties interact, you can better map out your stakeholder management plan.
As we’ve mentioned before, each stakeholder has a role to play, whether it be big or small. Through mapping out your stakeholders, you can get a visual layout of how to conduct your engagement strategies. Not all stakeholders will require high participation or involvement in business decisions. Sustainability strategies will also impact them to varying degrees. Their influence towards a business also falls under a spectrum ranging from high to low.
Stakeholder mapping is done by plotting out stakeholder groups into a matrix. The y-axis focuses on the influence the stakeholder has towards your company and its decisions. On the other hand, the x-axis represents their interest in your business. After determining the scale of its influence and interest in your company, your stakeholders will be roughly split into four quadrants that can provide you insight on how to set up your engagement plan.
Your stakeholder engagement matrix categorizes your stakeholder groups and gives you an overview on how to manage your relationships with them. Engagement will depend on the level of impact and interest they have. Some stakeholders may simply need periodical monitoring, whereas other relationships would require higher levels of engagement and interaction ranging from surveys, focus group discussions, and consultations with key individuals.
Stakeholders with low impact and interest towards your company’s performance require little engagement. However, this doesn’t mean that they should be overlooked. It’s good that you still remain aware of these groups and their involvement in activities related to your business.
A tech startup may consider suppliers like cloud service providers as low impact and low interest stakeholders as they still are essential and relevant to their operations yet they may not be interested in the startup’s operations. Researchers may also fall in this category for healthcare practitioners as their studies may influence operations in the near-future yet have low impact on current operations. Monitoring these stakeholders groups will still provide sufficient information on your company’s performance and involvement with these groups. In addition, stakeholders in this sector may shift and change interest if they are also exposed to communication strategies.
Stakeholders with a low impact to the company yet who wield a high interest towards your business will require engagement through relaying information that would keep them aware of your performance. These stakeholders want to be informed about you.
A renewable energy company may have environmental NGOs in this section as they are aligned with the same advocacy yet have little direct influence on the industry’s practices. The company may engage with them through updates to keep them informed or open forums where they can be aware of current happenings and also build more involvement in the industry.
Through sustainability reports, communication strategies, and consistent engagement, interaction, and awareness, you can further build your relationship and connection with these players.
High impact yet low interest stakeholders have moves you need to anticipate, given their influence to the business. However, these stakeholders do not necessarily need to be informed or highly interested in your business at all times, thus, making your engagement activities with these stakeholders focused on keeping them satisfied with your performance.
A retail company can have an e-commerce platform as a high impact, low interest stakeholder as they can influence sales and logistics yet the platform has low interest as they are focused more on their own business operations. In addition, insurance companies may be in this quadrant for the healthcare sector as they fund patient care yet do not manage it. Consulting with these stakeholders may help contribute as their input and opinion would heavily influence business decisions.
These stakeholders are the relationships that strongly influence the success and performance of your business. These are your major players and it’s important to maintain this relationship and continuously keep these stakeholders engaged. For a manufacturing company, their high impact, high interest stakeholders could be their customers and senior management. On the other hand, a non-profit organization would consider donors and beneficiaries as key stakeholders.
These are the stakeholders you want to be involved with. A high impact, high interest stakeholder would need consistent updates and regular meetings for strategic planning and feedback. Their concerns and perspectives can pave the way to meaningful and sustainable strategies that make the most impact to your business.
A good relationship doesn’t end with one interaction. It’s something you build and maintain over time. When laying out your stakeholder management plan, establish follow-up strategies and feedback channels that will keep this connection going. Ensure your stakeholders are aware of your activities and intentions to sustain this and improve future interactions. In addition, regularly assess and evaluate your strategies and matrix to ensure your engagement plan is still effective and if the needs of your stakeholders have evolved over time.
An effective engagement is built on effective implementation and planning, down from the scheduling to allocating resources, from conducting initial outreach to requesting for feedback. By interacting with stakeholders, a business is able to view and transform their operations and impact on multiple fronts.
Connecting with people is something unavoidable. It is inherent yet strengthening these connections requires planning, time, and effort. An effective stakeholder management plan aligns business objectives with stakeholder expectations. Through understanding stakeholders and listening to their needs and concerns, a business can discover new opportunities to integrate into their strategies. With strategies that respond to key audiences, a business is able to succeed in their operations while keeping stakeholders interested and engaged, thus fostering stronger relationships while strengthening business reputation.
To be sustainable, a business cannot be static. A business needs to collaborate with those who affect and are affected by their performance. A stakeholder management plan is not just an integral piece to success. Connecting is a commitment and engaging with stakeholders is a responsive, responsible, and sustainable business practice.
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
