CBSR 10th Annual Summit - Panel Summary: Stakeholder Engagement for Mutual Benefit
Stakeholder engagement comprises both the formal and informal ways of staying connected to the parties who have an interest or potential interest in a particular project. Engagement implies understanding stakeholders’ views and concerns and taking them into consideration. It’s also about being accountable to stakeholders, and using their feedback in order to drive responsible business practices and innovation. Successful engagement plans help to strengthen relationships, increase trust business and its stakeholders and create mutually beneficial projects for all parties involved.
Companies are more and more recognizing the importance of stakeholder engagement. Often it is also through tough experiences that companies learn the most important lessons. There are several examples of stakeholder engagement gone wrong, but companies who are truly committed to social and environmental responsibility and understand the importance of effective stakeholder engagement have taken these negative experiences as a constructive learning experience.
Lorraine Little from Enbridge spoke quite candidly about an incident the company had to confront in Michigan when a leak caused an oil spill of 20,000 barrels. The company responded as quickly as possible to the situation. Top management itself went on the ground to attend community meetings to engage in an open dialogue with people and understand the community’s concerns in order to enable the company to address the current situation in a more effective manner and rebuild the trust with the communities moving forward. From this experience, the company says it has learned to better know who its stakeholders really are and have increased interactions with the community in order to understand their current concerns and address them in a more proactive fashion.
Etienne Lamy from the mining giant Rio Tinto agreed that stakeholder engagement is crucial to the success of a company, and is especially important when operating in an area with difficult social challenges. According to Etienne without proper social engagement, the results are obvious: delays in the project and increased costs for the company. It is important for companies to gain the trust of communities and gain the social license to operate. It also happens to be “the right thing to do”, according to Etienne. That is the reason why the company has developed Social Performance Standards that are regularly audited across the different global operations.
Throughout the summit we heard that companies need to have a true aspirational vision to build their CSR practices from what success looks like in the future. John Coyne from the multinational Unilever mentioned that stakeholder engagement at Unilever is a long-term approach of a continuum of activities. The ultimate goal of the company is to “leave its business in a better shape for the people who come behind us.” The company’s CEO is an articulate endorser of sustainable development and has often been referred to as “captain planet” after launching the company’s ambitious sustainable living plan.
Unilever’s sustainable living plan consists of a long 10 year journey looking to double the size of the company’s business, while reducing its environmental footprint in half and increasing the positive benefits of the company’s presence. Examples of the targets include sustainable sourcing of all raw materials and improving the livelihoods of over 1 billion people on the planet. In order to reach these targets, the company recognizes that effective stakeholder engagement is fundamental to that journey and that the company cannot do it alone given the complexity of the issues at hand.
The voice of Evelyne Guindon, Vice President of International Programs at CARE Canada, was an interesting voice and complement to have on the panel. CARE is an NGO that has been working on defending dignity and fighting poverty since 1945. Fighting poverty, in words of Evelyne, “is certainly not an easy thing to do.” It requires addressing the underlying causes of poverty - the systemic problems- which are complex issues that require complex solutions. One of the ways to address the issue is around collaboration: people coming together to find solutions to many of the problems where mutual interest intersect. Needless to say, the road to collaboration is not an easy one. Everyone sees the world in a different way and solutions have to be found while including the different approaches and perspectives.
A crucial step to a more successful collaboration mentioned by the panel is to understand the objective and purpose for the collaboration and identifying the right partners to work with. CARE, for instance, looks for partners that do not deviate the organization from its mission. Rio Tinto looks for partners willing to work with a company like Rio Tinto, and that have an understanding of the issues and how they can be solved. Similar to Rio Tinto, Enbridge partners with organizations that understand and accept the company’s principal activities, but also truly believe about the importance of issues such as biodiversity. Unilever looks to work with partners that can generate scale to what the company does in various jurisdictions around the globe.
Another key success factor in developing successful partnerships mentioned by the panelists is inviting third parties to broker and facilitate the development of the relationship. This is particularly important when taking into consideration the complexity in partnering dynamics. Furthermore, companies and respective partners need to involve the government into the conversations early on in order to ensure government’s role is not replaced and it’s held accountable for its responsibilities. In areas where local development plans are not in place, it is crucial to develop this development plan with all stakeholders, including government, in order to provide clarity of the direction and roles moving forward.
Collaboration may not be as straight forward and can be quite complex, but in the words of Evelyne Guindon: “One has to be a believer that there is true transformational change in the potential of these partnerships”. In the long run, the outcome is sure to be more inclusive, mutually beneficial and also more sustainable.