How stakeholder engagement aligns with your ESG strategy

ESG stands for Environmental, Social and Governance (ESG) and these three factors are used to measure an organization's sustainability, responsibility, and ethical practices—it's an important movement that is unfolding worldwide.

What kind of benefits can an ESG strategy provide?

Among many benefits, an ESG strategy can:

• Help strengthen key stakeholder relationships (these stakeholders can be investors, employees, governments, regulators, communities, project-affected persons, etc.)
• Attract passionate team members who want to help you do meaningful work
• Create advocates for your organization
• Help establish a shared value between your organization and your stakeholders
• Lower ESG-related risks 
• Protect your long-term investment value
• Create capital incentives

Stakeholder engagement in ESG

Stakeholders should help to guide your sustainability and ESG focus

While we certainly need to work to meet regulations and global expectations (e.g., the UN Sustainable Development Goals), we also need to start by learning and understanding what our stakeholders care about and what they expect from our organization.

Starting with a stakeholder engagement plan, you can conduct a stakeholder analysis with a stakeholder mapping exercise to ensure you correctly identify and prioritize the stakeholders you will be working with on your ESG strategy.

Aligning values

For a value-driven ESG strategy, companies should start by learning which ESG initiatives best align with their business and stakeholders' values, then prioritize them accordingly.

This initial planning will help ensure you and your team are on the same page, using the same messaging, and aligned with the same goals for more consistent, transparent, and effective communication. Once you have identified this information, you can begin engaging your stakeholders with tactics that make sense for your organization (e.g., face-to-face communication, feedback sessions, surveys, etc.).

Engage, learn, and listen

As you communicate and engage with your stakeholders about your project, your business, your values, and your commitments, you have opportunities to listen to and learn valuable perspectives from them. This type of engagement helps build stakeholder trust, which is vital to your organization's success.

Remember, part of being a responsible organization includes listening to your stakeholders' opinions because they are "experts in their own lives," with different knowledge and understanding that can help you fill in gaps and build a stronger strategy. We need to learn what's important to stakeholders and what could affect our organization, using methods such as materiality assessments.

Stakeholder Relationship Management (SRM) software is a valuable tool in this process. It offers a centralized space to streamline all your stakeholder management efforts, ensuring you stay organized with stakeholder communications, issues, and commitments, while allowing you to create focused reports to share your progress.

Build an effective, long-term strategy from the start

Once you've conducted your materiality assessment (considering future trends, stakeholder values, issues, etc.) and better understand your stakeholders' perspectives, you can continue building your ESG strategy.

Within your strategy, you should clearly define your commitment to this work, sharing the actions you'll take and how you'll stay accountable to your stakeholders and your goals.

Having this strategy in place from the start is essential because it's not just your stakeholder relationships and reputation on the line, but also other consequences. Some ESG regulations place strict expectations on companies, with significant repercussions, including fines and even a loss of market access.

To meet these regulations and expectations, you need a clear, actionable plan and to record your data correctly, ensuring your records are transparent and shareable—it's not enough to say you're doing this work; you must be able to prove it. See an example of how Samsonite used stakeholder engagement for their ESG strategy.

Build your ESG commitment into your core values with key messages

It's common for organizations to start doing ESG work to keep people happy; when this happens, they often don't internalize this commitment as a core business value, gaining true internal and external buy-in. Remember, part of the ESG process is a commitment to educating your entire company so that everyone understands and believes in the commitment and can share it in a meaningful way. Everyone from the CEO to your interns should believe in your ESG commitment!

Part of doing this successfully is by integrating your key messages into everything you do. Start meetings by referencing your key ESG messages, add your commitment and key messages to your website, brand documents, social media, etc. Everyone should understand them and buy into them.

Share what you've done

Beyond making the plan, gaining buy-in, and taking action to implement your ESG commitment, you must also clearly and understandably share what you've done.

Stakeholder Relationship Management (SRM) software can help you do this through robust reporting features that let you create detailed reports showing your engagement efforts. These reports have many uses. You could use them to compile regulatory reports, share with management and decision-makers to build buy-in, or use them alongside financial reports in your annual ESG and Corporate Social Responsibility (CSR) reports to demonstrate transparency and openness to your stakeholders.