An ongoing challenge for sustainability professionals is engaging and aligning both internal and external stakeholders on the issues that matter most to the success of their organization. The term “materiality” is increasingly being used in the business and sustainability communities to help identify, prioritize, and communicate these issues that are most relevant.
When organizations conduct a materiality assessment, they gain valuable insights into which issues or topics stakeholders value most. But this is also a great starting point to open lines of communication to, and build relationships with, the people who matter the most. Let’s explore how organizations can use the assessment process to improve stakeholder engagement.
Who is a Stakeholder ?
A stakeholder is anybody who is affected by the actions of an organization. They are generally divided into two categories:
Internal Stakeholders include people who are in a direct relationship with an organization like employees, shareholders, board of directors, and more.
External Stakeholders include anyone or anything that could be affected by the actions of an organization like customers, investors, regulatory bodies, governments, communities, and more.
What is Stakeholder Engagement?
Stakeholder engagement refers to the process of an organization communicating, interacting, and building rapport with stakeholders. It involves identifying, planning, and implementing action plans designed to drive connection on important topics or issues. Different stakeholder groups can have very diverse perspectives and interests.
At its core, engagement is about building a positive working relationship between an organization and those who influence its success.
How To Use Materiality to Improve Stakeholder Engagement and Buy-in:
Materiality assessments enable organizations to determine what is relevant and provide an initial point of engagement with those that matter most to an organization. Here are three ways to use the assessment process to further improve stakeholder relationships, creating sustainability champions and buy-in:
Involve & Inform Stakeholders Early
The first and easiest way for organizations to start engaging stakeholders is to involve them in the materiality process from the beginning. Remember to also cast a wide net. This helps sustainability professionals ensure their assessments are designed with all stakeholder concerns and opinions considered.
Involving stakeholders also helps them feel a sense of ownership around sustainability initiatives and goals. This drives not only more engagement but also improves motivation to address these topics and issues. To help build this sense of ownership, organizations need to be transparent about the process, results, and progress of their materiality assessments. Doing so helps build trust among stakeholders on an organization’s efforts on the issues or topics they care about.
To further build trust, organizations should inform participants about the full assessment process, other stakeholder groups, and current sustainability goals and strategies. Where appropriate, organizations can also inform stakeholders on assessment goals, what they might be looking to address and why.
Share & Use Results from Assessment
Once an organization has completed its initial assessment and mapped the results on a materiality matrix, it’s time to share the results with stakeholders. Transparency not only builds more trust but also drives future engagement levels as people like being able to see the outcomes of their contributions.
Materiality assessment results should drive organization and sustainability strategies, as well as determine priorities for the short and long term. With limited time and resources, not every stakeholder issue will be addressed or addressed quickly, so it’s important to communicate assessment outcomes and priorities, and the decision-making process behind them.
Organizations can help set reasonable expectations by communicating how often they will be conducting assessments, reporting on progress, and evaluating strategies. This can help keep stakeholders engaged for future requests if they felt their concerns were not addressed in an initial assessment or strategy.
Continue the Conversation
The relationship between an organization and its stakeholders is essential to further developing a comprehensive ESG and sustainability program. By staying connected as they develop their sustainability strategy, organizations can continue to build rapport with different stakeholder groups.
Reporting assessment results should not be the end of communication. Stakeholders should be encouraged to share their feedback and insights throughout a reporting cycle and throughout the relationship with the organization. Again, when stakeholders feel heard and valued, they become more engaged in the outcomes of the overall process and want to contribute to program success.
Keep in mind valuing stakeholders means attempting to connect in a convenient and reasonable way for them. Not all stakeholder groups will have the same access or means of communication. For example, some customers might not have regular access to the internet to answer an email survey. It is important for organizations to customize their outreach based on the stakeholder to ensure that all are given a chance to contribute their thoughts.
Efficiency is also key to secure participation. Communications or surveys should not only be accessible but kept short and to the point to respect the valuable time of all stakeholders.
When organizations incorporate the results of their materiality assessment and feedback from stakeholders into their sustainability strategy, they can not only build a comprehensive ESG and sustainability program but also improve engagement and buy-in. The program addresses things they care about.
And when stakeholders see organizations acting on the ESG and sustainability issues they care about, they are more likely to offer their support for the solutions needed to solve these issues. Having this buy-in from the right stakeholders, like an organization’s board of directors or investors, is essential to long term program and organizational success.
Ready to build an ESG strategy and tackle your organization’s materiality process? The FigBytes ESG Insight Platform helps bring your strategy to life with interactive maps, integrated scorecards, and materiality assessments.
- Ted Dhillon, FigBytes CEO and Co-Founder
- Zoë Frances, FigBytes Senior Director, Product
- Michelle Binczyk, FigBytes Product Manager, Platform