Stakeholder Engagement: Six Tips for Effective Dialogue

By Deborah Fleischer

Stakeholder engagement is a process of reaching out to a range of constituents who are interested in, or impacted by, your business, including employees, investors, suppliers, non-governmental organizations (NGOs), consumers, governmental agencies and thought-leaders.

It means opening up your company to feedback, and potentially criticism, from a diverse range of perspectives. So, why would you want to take this risk?

Business case for stakeholder engagement

Before I launch into the key tips for engaging stakeholders, I want to touch on why stakeholder engagement is a solid business practice.

Alex McIntosh, Director of Corporate Citizenship at Nestle Waters, believes that lacking a stakeholder engagement strategy “…is like launching a new product without doing any market research….You are taking a big risk without doing it. Stakeholder engagement is an important, essential element in good citizenship and good business strategy. You need to know what issues are most important to the people that are most relevant to your business.”

Hewlett Packard (HP) is involved in dialogues with NGOs all over the world. Bonnie Nixon, Director of Environmental Sustainability at HP explains, “allowing stakeholders to honestly critique us pushes us to improve our programs and helps us develop our thought leadership platforms.”

To sum it up, here are the key business benefits to a stakeholder engagement program:

You can get feedback on where you are perceived on key issues, identify areas for improvement and understand what risks may be coming; NGOs can help raise awareness of issues outside your four walls, identify your weaknesses and bring issues to life for the CEO. Issues coming from a stakeholder community often bring credibility to an issue; Engagement can provide valuable input as you develop goals and metrics; and Stakeholders can help you push the envelope and stretch for higher performance.

Six tips for more effective outreach

Each of the following six tips is discussed in more detail below:
* Be strategic about whom to talk to
* Connect to the larger world
* Focus on solutions
* Build an internal culture
* Don’t make commitments you cannot keep
* Look both upstream and downstream

Be strategic: Think strategically about whom to invite to the table and stretch as much as possible into your discomfort zone. The ideal stakeholders to reach out to are those who have both power and influence and a willingness to engage.

Be open to speaking with both ends of the spectrum, from collaborative organizations to more extreme activists. The groups you don’t want at the table might have important insights or be a catalyst for a new solution to emerge.

HP doesn’t shut the door to any NGO—they are open to critiques from activist organizations such as Green Peace and have more strategic partnerships with other organizations, such as the World Wildlife Fund (WWF), who advises them on such issues as carbon reduction goals and metrics.

Connect to the larger world: NGOs, sometimes even the ones you don’t see eye to eye with, can be great allies when there is a large, social issue that a company can’t fix alone, such as climate change, recycling or water issues.

Focus on solutions: True dialogue can generate increased trust, new solutions and creative partnerships. A key to a successful stakeholder engagement is designing the process to lead to action and solutions. Challenge stakeholders to be part of the solution.

Build an internal culture: McIntosh recommends “educating your internal team on the spectrum of NGOs and the potential impact they can have on the business.” Develop strong relationships with other key departments, such as procurement, marketing, supply chain and governmental affairs—build expectations internally on how stakeholder engagement can help the company.

Don’t make commitments you can’t keep: OK. This one might seem obvious, but for large companies, making changes within a supply chain can take time and planning. While some stakeholders might want you to be more aggressive on a particular issue, be sure to look at the bigger picture, and across your supply chain, before making commitments.

Look upstream and downstream: Include your supply chain, customers, investors and employees in your outreach. What issues do they care about? What is important to them? Answers to these questions can help inform your strategy and programs.

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Deborah Fleischer is the founder and president of Green Impact, providing strategic environmental consulting services to mid-sized companies and NGOs who want to launch a new green initiative or cross-sector collaboration, but lack the in-house capacity to get it up and running. She brings expertise in sustainability strategy, program development, stakeholder engagement and written communications.

Eight Tips for Getting Your Sustainability Project Off the Ground

The following recently ran on www.greenbiz.com.

In Part I of this series, I focused on the business value of going green. This piece focuses on in-the-trenches advice for new sustainability directors at companies just getting started on implementing a sustainability strategy.
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1. Look at the big picture and identify your company’s greatest impacts. Review your key business operations to understand the key environmental issues for your business and the opportunities and risks presented by these issues. Alex McIntosh, Director of Corporate Citizenship at Nestlé Waters, advises new directors to “think broadly about what sustainability means to your business, look beyond your four walls, up and down your full value chain.” Then,” he continues, “quantify your impacts [green house gas (GHG) emissions or life cycle assessment (LCA) or tons of waste] and prioritize the places where your impacts are the greatest. Pay lots of attention to how people inside the company are being rewarded or penalized for their performance in those areas.”

2. Land some quick wins — go for cost savings. To start, prioritize and focus on capturing the low-hanging fruit. Look for opportunities that will deliver results quickly, such as increasing efficiency and reducing waste. Scan your business and look for logical opportunities to save money and develop measurable metrics to track results.

3. Be authentic. If you are going to use sustainability as a product differentiator, be sure you have done all you can to be authentically green. This does not mean you have to be perfect. Consumers want honesty and transparency, not perfection. But with today’s social media tools, it only takes a moment on Twitter for someone to accuse you of greenwashing.

4. Develop internal partners. For directors getting started, begin to network throughout the company and create relationships with directors who oversee key functions, including product design, procurement, sales, supply chain, governmental affairs, social investment, analyst relations and employee engagement. Look for opportunities to gain their trust and educate them on the value sustainability offers the company, including product differentiation that can capture market share and drive top-line revenues.

5. Engage your stakeholders. McIntosh suggests meeting with as many people as you can outside of your company, “prioritizing to meet with the most influential and interested stakeholders first.”

“Stakeholder engagement is an important, essential element in good citizenship and good business strategy. You need to know what issues are most important to the people that are most relevant to your business,” suggests McIntosh.

Include your supply chain, customers, investors and employees in your outreach so you can understand what leadership looks like or what risks may be coming. What issues do they care about? What is important to them? How are they tackling their end of the equation? Answers to these questions can help inform your strategy and programs.

6. Engage employees. If you are short on resources to implement new programs, look to your employees. Bonnie Nixon, Director of Environmental Sustainability at Hewlett Packard, explained that the company engages employees on multiple levels, ranging from providing them energy kits to reduce their personal carbon footprint at home to offering incentives for biking to work to encouraging them to innovate more and find ways to imbed sustainability into product design, the supply chain and the sales process.

7. Develop a communications strategy. A key component to a sustainability program is communicating both internally and externally about your efforts and results. Develop a strategy that details how you are going to communicate your efforts — both your successes and future areas for improvement.

8. Develop a long-term strategy. Going green does not happen overnight. Hunter Lovins, the president and founder of Natural Capitalism Solutions warns, “avoid the temptation to be green all at once. This is a years long process, like continuous improvement.”

Bonnie Nixon adds, “in addition to a short-term strategy, you need to develop a longer term plan that looks at potential trends and regulations out there and what your future customer segment is going to look like.”

Ultimately, you want to aim for an authentic strategy that is linked to your company’s mission, vision, brand and values that will deliver significant, quantifiable, bottom-line results.

Deborah Fleischer is the founder and president of Green Impact, providing strategic environmental consulting services to mid-sized companies and NGOs who want to launch a new green initiative or cross-sector collaboration, but lack the in-house capacity to get it up and running. She brings expertise in sustainability strategy, program development, stakeholder engagement and written communications.

Taking a stand on your water footprint

The following was just posted on MatterNetwork.com:

We often hear sustainability defined by the mantra “people, planet, profit.”

Yet when it comes to water, it seems that the “people” portion of the equation has gotten short thrift. Globally, thousands of children die each day from drinking unsafe drinking water and 890 million people don’t have access to clean water.

In addition to the social justice aspect of the water issue, the other half of the equation is water supply. Yes, we have to deal with peak oil, but don’t forget about peak water.

Wednesday morning at Sustainable Brands 09’ the panel on water included two organizations tackling the water issue from different perspectives: Peter Cleary from LifeStraw and Tim Carey, Director of Sustainability from PepsiCo.

LifeStraw is a small water purification device that purifies 99% of virus and bacteria out of water and can be used affordably in rural areas that lack clean drinking water. The LifeStraw, which comes in Personal and Family models, meets EPA guidelines for microbiological water purifiers.

Not many companies can get away with linking poop and clean water in a marketing message, but Carey’s presentation included a video clip of cow dung being added to water before it is filtered and slurped up by willing volunteers.

Click here to read more…

Highlights from Sustainable Brands 09

What a great conference, topped off by a visit to the Monterey Bay Aquarium’s new sea horse exhibit.  From the biomimocry perspective, I am sure there are some great lessons we could learn from sea horses.

But back to SB09.  A full 3-days–plenary sessions with speakers who could share real lessons from the trenches on how to implement sustainability and green branding.  Enthusiastic participants hungry for conversation, many networking opportunities and a lively Twitter conversation (see #sb09) to keep up with.

My head is still full from meeting so many new people and hearing so many speakers.

Here is my download on the highlights from the past three days:

WHY GO GREEN

• Increase Market Share: Mainstream brands such as Clorox and PepsiCo shared that despite the recessions, their greener products were selling well.

• Cost Savings: Investing in efficiencies and renewable energy is great for business from an operational perspective. Intercontinental Hotels spent $400,000 and saved $1.2 million over four months by changing light bulbs.

• Customer and Stakeholder Demands: Companies are seeing an increase in customers who pay attention to green issues and holding companies accountable for their entire supply chain.  If you don’t respond to these needs, you won’t compete.

• Race for Talent: Companies with a commitment to sustainability attract the best and brightest talent and can avoid risks to their brand value. This year some graduating Harvard MBAs signed a “MBA oath” that includes a commitment to “strive to create sustainable economic, social, and environmental prosperity worldwide.”

• Regulations: They are coming, so get ahead of them for a competitive advantage.

TIPS FOR IMPLEMENTING A SUSTAINABILITY STRATEGY

Some of the ongoing themes from the tips offered for implementing a successful sustainability plan:

• Prioritize issues
• Use a wholistic, systems approach
• Develop an aspirational goal to inspire and guide your work
• Go for the “low hanging fruit”–there are quick wins that will deliver ROI and green benefits.  Key areas to focus on initially include facilities, fleets and distribution, IT, telework and waste.
• Get smart:  gather data and understand the impacts of your full value chain.  Good enough is ok.  Full LCA is too expensive right now.
• Get your employees engaged:  Make sure they understand key concepts, such as climate change is real and natural resources are not infinite.
• Innovate, re-imagine, get creative–look to nature for inspiration
• Develop internal partners to implement programs
• Engage with stakeholders, even your critics
• Stitch it all together into a sustainable brand
• Be authentic and transparent: report verifiable and true data
• Empower your customers: Help them understand the complexity of sustainability and engage them to be part of the solution
• Attempt to clarify the confusion around labels

COOL NEW STUFF TO CHECK OUT

LifeStraw: A water purification device that purifies 99% of virus and bacteria out of water and can be used affordably in rural areas that lack clean drinking water.  Their presentation inlcudes this video clip of cow dung being added to the water before it is filtered and drank.

Earthaid: A new dashboard launced about 6 weeks ago that lets householders monitor their electric, gas and water use and earn money for creating verifiable carbon credits. Also a great way for companies to spend their carbon neutrality dollars locally.  This start-up was the winner of the SB09 New Venture Exchange  Judge’s Award. Also a great tool for schools to look into.

RecycleBank: A web-based program for rewarding households for recycling, linked to over 1,700 local and national brands.

GreenOps Ecostation: The new recycling station that will be in some Wholefoods stores was on display at the conference, along with sexy gals in short white dresses made of recycled plastic bottles.  It is part of PepsiCo’s campaign to get more people to recycle, so they can include higher recycled content in their bottles.

Intuit Green Snapshot: This was one of the coolest new tools I ran into at the conference, and while I have not seen a live demo yet, the concept sounds like what many companies need– a simple, low cost way to track their carbon footprint, find easy ways to reduce it and easily communicate results to customers.

According the their web site,  “Intuit Green Snapshot pulls expense data from QuickBooks, analyzes your business’s carbon footprint based on your business expenses, and generates actionable recommendations to help business save money and benefit the environment. The more actions you take, the more carbon (and dollars) you can save – and we track your carbon savings over time, so you can tell your customers about your green efforts!”

SunChips–striving to be the greenest chip on the block

The Tuesday morning panel at Sustainable Brands 2009 focused on “taking the pulse” of sustainable brands and included a lively presentation by Thomas Oh, Director of Marketing at Frito Lay (part of the PepsiCo family), on the brand of SunChips.

Despite the chips including sugar, artificial color and one obscure ingredient I had to Google (Maltodextrin), they are do some innovative stuff. Click here to learn more and read the article I wrote for MatterNetwork.

Click here to check out a great video clip from SunChips showing how their bag, once launched, will decompose.  And also check out this ad that details their campaign to engage consumers to come up with small ideas that can make a difference.

Live from Sustainable Brands 2009

Hot off the press, reporting live from Sustainable Brands 2009:

Dell’s Brand of Sustainability Getting Results

Tod Arbogast, Director of Sustainability at Dell, was described at Sustainable Brands 2009 on Monday as “a bright light of sustainability. With Dell’s recent success in reducing its carbon footprint and ARM Research award for leadership in sustainability, what can others learn from the company?

Click here for the whole article on MatterNetwork.

Why being a green laggard is bad for business

This article was just published on GreenBiz.com:

Have you recently been targeted for your lack of progress on addressing climate change and sustainability issues? Have you not incorporated sustainability strategy into your operations because you think you have more important issues to focus on?

Then this article is for you.

If you know a CEO who fits this description, please pass this on. If you are already sold on the business case for going green, but need advice on how to get started, Part II of this series will be of interest to you.

Because even though there are plenty of companies that are leading the charge in the green business movement — and reaping significant rewards in the process — there are just as many, if not more, laggards who are slow to the game. So I will lay out three of the simplest reasons why sustainability makes good business sense from a bottom-line perspective.

The elevator to pitch to a skeptical CEO on why sustainability makes good business sense would contain these top three reasons:

• It will save you money
• It will provide better access to capital
• It will drive top-line revenues

It Will Save You Money

More efficient use of energy and cutting out waste saves you money. Big, expensive sustainability plans are not necessary to get started. Bonnie Nixon, Director of Environmental Sustainability at Hewlett Packard (HP), advises to scan your operations and begin by looking for quick wins. HP has recently focused on areas that would quickly provide both cost-savings and environmental benefits such as consolidation of their real estate and data centers and a commitment to teleconferencing. HP’s Halo system enables companies to cut travel time, dramatically reduce travel costs and lower one’s carbon footprint.

The Environmental Defense Fund’s (EDF) Climate Corps program places specially trained MBA students into corporations to identify energy efficiency improvements. In 2008, their fellows discovered efficiencies in lighting, computer equipment and heating and cooling systems that could save the participating companies $35 million in net costs over five years.

According to EDF, “companies are missing significant savings in annual operating costs — around $40,000 for every 50,000 square feet in office space using no-cost or low-cost measures…”

Teams from Natural Capitalism Solutions have shown companies how to save millions each year by turning off unnecessary lights and unused computers. Nationally, turning off unused computers would save $2.8 billion and enough carbon emissions to equal removing 4 million cars from the roads.

A recent study by A.T. Kearny cites a global consumer packaged goods company, featured on both the Dow Jones Sustainability Index and the Goldman Sachs SUSTAIN focus list, that increased production by 76 percent since 1998, but reduced its greenhouse gas emissions by 16 percent — improved energy efficiency saved the company about $30 million in 2007.

Aberdeen Group’s recent report Sustainability Matters found that companies in the top tier of sustainable performance had a 9 percent decrease in energy costs, 10 percent decrease in overall facility costs, 11 percent decrease in paper costs and other costs savings in waste disposal, transportation logistics and packaging, while the laggards had an 19 percent increase in energy costs and 15 percent increase in facility costs.

It Will Provide Better Access to Capital

Institutional and socially responsible investors are pushing companies to integrate climate risk and sustainability into their business strategy.

“Another aspect of the integrated bottom line,” explains Hunter Lovins, president and founder of Natural Capitalism Solutions, “is better access to capital. Companies that are high on Dow Jones Sustainability Index may find that they have an easier time getting capital. Socially responsible investors typically won’t lend to companies that don’t have a sustainability policy.”

“The most sustainability-focused companies may well emerge from the current crisis stronger than ever — recognized by investors who appreciate the true long-term value of sustainability,” according to the A.T. Kearny report.

It Will Drive Top-Line Revenues

A commitment to sustainability can also drive top-line revenues. It can catalyze innovation, attract the best and brightest talent, inspire new products and increase market share by differentiating products.

Lovins points to the example of STMicroelectronics, which made a commitment to become carbon neutral by 2010 with a 40-fold increase in production. The process of figuring out how to achieve this ambitious goal was a catalyst for corporate innovation, increasing the company’s market share and saving millions of dollars in the process.

Yale University set a goal of designing a new, carbon-neutral building for the School of Forestry and Environmental Studies. Despite all kinds of impediments, the commitment to being carbon neutral spurred the design team to stretch, try new technologies and ultimately set a new benchmark for a sustainable building. The school’s new Kroon Hall is a great example of how an audacious commitment can spur innovation and create opportunities to advance change.

And while there is disagreement on whether in this economy consumers are willing to spend more for green products, according to a new report by the Yale Project on Climate Change, The Six Ways Americans View Global Warming [PDF], there is a growing group of “alarmed” and “concerned” consumers willing to reward companies addressing climate change by buying their products and also willing to punish companies by not buying their products.

Ready to Get Started?

If any of the above arguments resonate with you, create a senior level sustainability position and empower it with the resources to get started. Part II of this series, “You are a Sustainability Director: Now What?”, offers seven tips for newcomers to the role.

Reports on the Business Case for Going Green

• Green Winners by AT Kearney
• Sustainability Matters by Aberdeen Group
• Green is Gold by Goldman Sachs (older, but still referenced)
• The Responsible and Sustainable Board by Deloitte
• Business Case for Climate Protection by Hunter Lovins

For another perspective on the same topic, check out this piece on Harvard Business Press.

Tips for stakeholder engagement

Check out a new piece I did for Triple Pundit on tips for stakeholder engagement.

Sustainable Brands 2009 Conference

Reporting live from Sustainable Brands 2009 on assignment for Matter Network.  Here is a summary of last night’s opening session.  Stay tuned for more.

Green Laggards: The Business Case for Changing Your Ways

Late last year, Ceres came out with a report, Corporate Governance and Climate Change: Consumer and Technology Companies, which rated companies progress on addressing climate risk.

In February,  Ceres and The Interfaith Center on Corporate Responsibility targeted 48 companies with shareholder resolutions  for their lack of progress on addressing climate change–aimed at improving their focus and attention to the financial risks and opportunities from climate change.

I’v been pondering this list of Green Laggards and wondering what it would take to move them into action.  While trillions of dollars are behind the shareholder resolutions, I don’t think it is enough to get them to integrate sustainability as a core business value. They might offer to do a sustainability report or release a carbon emissions inventory, but that is not enough.

I’v been reviewing some of the key literature on the business case for integrating sustainability into business operations and will be writing more on this in an upcoming piece for www.greenbiz.com. The plutheria of reports have a similar conclusion:  companies commited to corporate sustainability practices are achieving above-average performance in financial markets, even during this slowdown.

Here are some of the most recent reports that detail the business case for going green:

Green Winners by ATKearney

Sustainability Matters by Aberdeen Group

Green is Gold by Goldman Sax (older, but still referenced)

The Responsible and Sustainable Board by Deloitte

Business Case for Climate Protection by Hunter Lovins

Stay tuned for two follow-up pieces I am writing for GreenBiz.com on the business case for going green and advice for new sustainability directors, integrating interviews with Elliot Hoffman of New Voice of Business, Hunter Lovins of Natural Capitalism Solutions and Jay Ogilvy of the Presidio School of Management.