Imagine organising a picnic. You invite family, friends, and neighbours—people who are important to the event’s success. You wouldn’t want to miss inviting someone, like the person who’s great at organizing games or the one who brings the best potato salad.
Similarly, in your sustainability narrative, you identify and invite your key stakeholders. In a business or organisation, a stakeholder is any individual, group, or party that has an interest in both the business or organization and the outcomes of its actions. These can include employees, investors, governments, suppliers, shareholders, customers, and even larger communities. Each group has a role in shaping and supporting your sustainability goals. It goes without saying then that they need to be a part of your sustainability narrative.
Building your sustainability story with your stakeholders in mind benefits your narrative in many ways.
Trust, Transparency, and Loyalty
When your stakeholders are clearly informed of a company’s goals, business trajectory and even weaknesses, it builds confidence and enhances credibility. While displaying weaknesses may sound like career suicide, it shows honesty and integrity. Stakeholders want to see that a company is truthful and willing to improve, rather than hiding behind false claims and greenwashing. This also builds a brand’s reputation, encouraging stakeholders like customers and investors to stay loyal. This of course then leads to long-term viability of the business. Companies with loyal backing from stakeholders, prolonged customer retention, and improved employee engagement are able to stand the test of time.
Collaboration, Innovation, and Expectation
When external stakeholders are engaged with a company or organisation, they can also bring valuable insights. They provide new lenses with which to inspect and dissect existing problems that internal stakeholders may miss. Diverse voices provide fresh ideas, leading to new and innovative solutions, and possible overhauls of business models. Partnering with other stakeholders like the wider community, NGOs, or academia will also provide a whole new world of possibilities for growth. When external stakeholders like the larger community are involved, this aligns their expectations. They will be communicated to sufficiently and transparently and be shown clearly that this company echoes their own values.
Risks, Compliance, and Frameworks
Your sustainability narrative is a story of how your company is performing in accordance with ESG and the 17 UN SDGs. Having stakeholders on board from the get go shows transparency and compliance throughout the supply chain. Any risks can be highlighted and mitigated quickly before they escalate. New regulations are also addressed immediately when companies engage with government bodies, suppliers, and other industry personnel. Transparent stakeholder communication is very much a part of reporting frameworks such as GRI, SASB, and TCFD.
Ultimately, stakeholder engagement ensures that sustainability initiatives align with business goals and external expectations. A sustainability narrative that reflects stakeholders' values helps build a resilient, future-proof business model, ensuring long-term viability in a rapidly changing world. In other words, bring all your friends to the picnic. You know you’ll want them there.