Corporate Reporting and the Power of Stakeholder Engagement

When it comes to sustainability reporting, what defines a responsible company? Vision, transparency, a CSR report, clear environmental metrics and social indicators - that's a good start. But without a vehicle - a direct relationship - to engage with your stakeholders, you lose one of your most dynamic and powerful tools, and perhaps a competitive edge. For sustainability planning and reporting, stakeholder engagement is critical.

According to the Global Reporting Initiative (GRI) G3 Guidelines, "Failure to identify and engage with stakeholders is likely to result in reports that are not suitable, and therefore not fully credible, to all stakeholders. Executed properly, it is likely to result in ongoing learning within the organisation and by external parties, as well as increase accountability to a range of stakeholders." The power is in recognising what stakeholders can offer and how their feedback can prompt innovative problem-solving and provide insight into your key business decisions.

Know your stakeholders. Your stakeholders include employees, shareholders, NGOs, suppliers, customers, governments, community members, and consumers. Feedback from these groups keeps your company aware, knowledgeable, and able to address concerns and adapt when required. Your stakeholders also influence the market and buying decisions. Building relationships with your stakeholders takes time and care, but it is the strength and integrity of those ongoing relationships that best illustrates your commitment to their value in making informed business decisions.

Create a system. Creating a system to receive and process stakeholder engagement allows you the ability to review and respond to feedback. The feedback can be incorporated into a CSR report, thereby valuing the stakeholders in the business process, and increasing your company's accountability. Whether the system incorporates surveys, direct contact, or a public meeting to collect the feedback, it is important that you also have methods to measure the feedback, as this helps to ensure company accountability and corporate citizenship in your sustainability report.

Gain competitive advantage. Why ask for feedback? Initiating a system and encouraging stakeholder participation provides valuable information that could produce a much needed shift in company thinking or practice. Stakeholder engagement creates an opportunity to assess current business practices, reveal new strategies and create clear, accountable sustainability reporting. Starbucks, for example, has successfully engaged stakeholders to discuss production practices, water usage, and their commitment to consumer awareness regarding the global water crisis. Aligning your company and stakeholder values generates potential for increased success and a competitive advantage.

Take action. Stakeholder engagement takes dedicated resources, the commitment to producing a robust sustainability report, and the vision to incorporate it into your overall company strategy. If your company has a sustainability VP, department, office, or director then the stakeholder engagement process has a ready platform for involvement. If, on the other hand, your company is just beginning the sustainability reporting process, there are companies that can help with stakeholder engagement, the CSR reporting process, and communication and performance management. The key is to take action and begin the stakeholder engagement process.

Jennifer Beauchamp is a second-year MBA student in Sustainable Management at Presidio School of Management and is the new Director of Sustainability at Creyr Publishing, Inc.

This article first appeared Greenbiz.com.