Why stakeholder engagement is key to successful CSR programs
By Sarah Ford on October 27, 2014
By Kim Heismann
For years, standard corporate practice has been to invest and develop Corporate Social Responsibility and Sustainability programs with minimal engagement of those they materially affect — customers, suppliers, employees, local communities, investors and others — also known as their stakeholders.
More recently, CSR has become recognized as a growing area of strategic value creation for companies. Nearly all listed companies report having a CSR program. The committed core of these companies is spending in the region of $50 million a year on CSR. While many are achieving positive results, some are hard pressed to account for why that is.
Yet stakeholder engagement is often seen as secondary, even non-essential, to the CSR agenda. Most stakeholder engagement programs today are tick-box approaches comprising two elements. The first is listening: a mass survey and the intermittent roundtable meetings. The second element is promotion: CSR/Sustainability reports on previous year’s accomplishments combined with an invitation to provide feedback or another survey.
As we all know, the experience of taking a survey is neither personal nor enjoyable. Not surprisingly, nor does it provide a sense of emotional connection to the company. Not only are there problems with this model, in terms of costs or risks, but companies are missing at least 80 percent of the value they could be deriving from these programs.
In today’s 24/7, always-on mobile communications landscape, information is ubiquitous. The media is everywhere (and everyone), trust is hard-earned and a company’s reputation is in the hands of its stakeholders. What does this mean for business? Stakeholder engagement is no longer optional for businesses who wish to stay in business.