Stakeholder engagement and materiality assessments

Stakeholder engagement – a critical component of materiality assessments

In previous blog posts, we have delved into the intricacies of conducting a double materiality assessment, which is a mandatory requirement under the European Sustainability Reporting Standards (ESRS) but also relevant to several other ESG reporting frameworks. Stakeholder engagement is a critical component when conducting a materiality assessment: Not only will it provide valuable insights into the perspectives and priorities of stakeholders, but will also inform ESG-strategy and can lay the foundation for long-term engagement with stakeholders. 

In this blog post, we share ideas on how to conduct a stakeholder engagement as part of a materiality assessment. 

Why engage with stakeholders in the first place, and how can stakeholder engagement substantially improve the results of a materiality assessment?

Since you are reading this article, it is becoming obvious that you do not conduct a stakeholder engagement for the sake of doing it or just because it may be a mandatory requirement. 

A well-designed stakeholder engagement can substantially improve the results of a materiality assessment. To get the setting right, we propose to identify the goals that should be achieved with the stakeholder engagement first. 

More than that: 

• What is the granularity or depth of insights you want to achieve? 
• Will the discussions in the stakeholder assessment only reflect on several, but high-importance topics, or will the approach be broader to cover more topics? 

Broad and diverse feedback can help to improve overall oversight. A focus on only a few topics that can have a substantial impact on your company to be discussed with key-stakeholders will have a much more narrow focus, but will ultimately lead to more in-depth insights. It is all about finding the right balance between both approaches. 

It’s about asking, “What can we achieve together?”, “How can we grow from this?” and “How can we tackle sustainability challenges together?”

Coming back to the question of “why” again: There may be several reasons, but the following may be the most important ones:

• What are the priorities of your stakeholders – what matters most to them?
• What are the unique perspectives and insights that your stakeholders can share with you?

Identifying stakeholders and understanding their priorities

The first step to a meaningful engagement with stakeholders is to become aware of whom the main stakeholders of your company actually are. 

Here are some prompts that may help to identify relevant stakeholders or stakeholder groups of your company: 

• C-Suite and management
• Customers
• Suppliers
• Investors and finance partners
• Employees
• NGOs
• Local communities
• … 

When looking at stakeholder groups, a good idea is to identify the key stakeholders for each group and consider how they may have an impact on your business and in turn, how your business affects them.

Ways to engage with stakeholders

There are several options on how to engage with stakeholders. From online forms to one-on-one interviews to advisory boards – the options to choose from are numerous. Here is an overview of the most common forms of stakeholder engagement. 

Online questionnaires and surveys

One of the most commonly used ways to engage with stakeholders is through online surveys. The main benefit of this approach is that online surveys are highly scaleable, hence a huge number of stakeholders can participate. 

Tweaking the survey’s design can add extra leverage: 

• Consider providing a set of general questions that can be answered by all stakeholder groups included in the survey. 
• Offer “add on” questions that are relevant for individual stakeholder groups only so that they can share qualified feedback. 
• Think about a “skip this question” option if a participant does not want to answer a particular question. 

The main benefits of this approach are scaleability, speed and cost-efficiency. It also allows anonymous feedback, which may encourage more honest responses. 

One-on-one interviews

One-on-one interviews with key-stakeholders help to gain in-depth insights and a more profound understanding of topics. Compared to the online survey, more time for preparation is required and the scope of topics should be limited to really focus on topics you want to do a deep-dive into. Typical stakeholders to engage with are internal executives, major investors, key customers and suppliers, or representatives of the local community. It is a good measure to inform the key-stakeholders upfront about the topics and provide background information to ensure that the interview partners are well-prepared. 

The main benefits from using this format are deep and nuanced understanding of stakeholder perspectives, their priorities, and the reasoning behind their views. 

Focus groups

Topical workshops or working with focus groups is a step ahead of one-on-one interviews. Depending on the setting, experts on a topic will be gathered. Then open-ended questions to guide the presentation will be presented. Facilitators will lead the discussion, ensuring neutrality and encouraging participation. 

Compared to the one-on-one interviews, this format offers more diverse views while also maintaining a clear focus. Depending on the composition of the participants, complex topics can be discussed from various viewpoints, leading to a more in-depth understanding of stakeholder priorities and potentially uncovering new issues and insights into the topic. 

Interdisciplinary Workshops

Interdisciplinary workshops are to some extent similar to focus groups, but will cover a broader spectrum of topics and the participants will form a more diverse group. Addressing topics from several areas, combining the insights and opinions of stakeholders looking at the topic from different perspectives, can lead to a sense of ownership and consensus among the participants. Not only can this foster growing relationships between participants, but also foster a stronger stakeholder relationship as a side effect. 

As for the focus group approach, extensive preparation is required for successful execution of the workshop. Hence, facilitators should be well-prepared, and all relevant background information should be shared upfront with the participants. 

Advisory panels

In a way, this approach takes the idea of interdisciplinary workshops one step further by regularly engaging with a diverse group of stakeholders over a longer period of time. The idea to implement an advisory panel is to gain advice and guidance not only on material topics, but also on ESG-strategy and strategy execution. 

Building a strong relationship with key-stakeholders provides an ongoing, in-depth feedback loop that can help to gain critical insights. It is also a way to monitor and react to evolving stakeholder expectations, perspectives, and priorities. As for every working committee, preparation is key to arrive at great results. 

Public consultations

Another way to engage with a broader audience are public consultations. While consultations through online platforms are becoming more and more common, they are also often conducted as in-person meetings or public meetings. This format can increase transparency and also can contribute to a company’s reputation by showing commitment to stakeholder voices. 

In any case, conduction of a public consultation requires preparation and organization – e.g.  to get all stakeholders informed, create break-out rooms to effectively engage with stakeholders and combining the results later on to share with the participants. 

Online platforms

Online platforms are another option to engage with a broad and diverse set of stakeholders. Unlike in an online survey, online platforms have a continuos function. Hence, a stakeholder dialogue is typically continuous and ongoing. 

Including online platforms in the process enables quick feedback on specific issues, while offering stakeholders the accessibility of an online format and depending on the moderation, the chance of real-time interactions with the mods or admins of the platform. However, deploying an online platform will require resources to manage it perfectly and satisfy stakeholder expectations. 

Focus on one option for stakeholder engagement or “mix and match”?

This will hugely depend on the resources available, the goals and the desired outcome of the stakeholder engagement. With limited resources, deploying an online survey and conducting just a few, but in-depth interviews with key stakeholders can be a good starting point to arrive at valuable insights. Another hybrid approach is combining an online survey with focus groups and key stakeholder interviews. The main benefits of this approach can be seen in the combination of contributions from a broad and diverse audience and in-depth insights gathered from the work with a focus group and key stakeholder interviews. If the long-term goal is to create an advisory panel, conducting one on one interviews can be a great starting point to engage with stakeholders to motivate them to participate in an advisory panel later. 

Conclusion

The options mentioned above showcase just a few options on how to engage with stakeholders. Getting started is the most crucial part and will depend on the resources available and the expected outcome. 

The good news is, that it is always possible to start building the foundations first and add additional layers of engagement later on – and if you would like to discuss how we can help you with your stakeholder engagement, we’re just one mail away.