Stay focused: the strategic value of stakeholder engagement
Making cities sustainable remains high up on the international agenda as the planet faces a climate emergency. Released in the UN Climate Change Conference COP 25 in Madrid, a global stocktake shows that the world’s buildings and their construction account for around 39 percent of total carbon emissions, with a worrying trend of rising energy demand from this sector by 50 percent in 2060 if no serious and sustained actions were made to achieve climate transition or the Sustainable Development Goals (SDGs). Apart from addressing environmental impacts such as carbon emissions and waste, the aspiration of achieving sustainable cities in SDG 11 also involves creating career and business opportunities, safe and affordable housing, protecting cultural and natural heritage, etc. Businesses are well-positioned to drive some of these sustainable changes and capture the opportunities that come with the transition.
the foundation for activating change
Meeting these ambitious yet much-needed targets requires a holistic approach in changing the ways buildings are constructed and managed, from strategic planning to day-to-day operations. In most organizations, changing the status quo is difficult. Fighting inertia is most effectively done in a structured and controlled process. Successful project delivery begins with a conversation with stakeholders who have an interest in or influence on the project outcome – before a change is made or decisions are taken. A stakeholder engagement exercise based on well-thought-out, systematic methodologies serves the purpose of understanding the expectations, interests, and concerns from a wide range of stakeholders. It is regarded by recognized standards such as the Global Reporting Initiative as an important first step in determining issues that matter the most to an organization and its stakeholders. With well-designed questions and facilitation, stakeholder engagement can help an organization understand its competitive positioning and levels of trust by different stakeholder groups, identify emerging risks and opportunities, as well as gather important insights to refine its new strategies and developments.
Engaging with stakeholders in the real estate sector – case study of China
Over the past two years, at PIE Strategy, we worked with our clients to conduct stakeholder research in the real estate sector across Chinese cities including Hong Kong and Macau. China is undergoing rapid urbanization and 70 percent of the country’s population will live in urban areas by 2030. The environmental and social implications of more people living in cities would be far-reaching for urban planning, building design and well-being of the city dwellers. We surveyed more than 500 stakeholders connected to the real estate sector including employees, customers, non-proft organizations, suppliers and business partners, and asked them what are the top challenges facing future cities. The findings revealed that the top challenge perceived is climate change, followed by pollution (in particular, air pollution), technological development, environmental degradation, and an aging population, and stakeholders expect the real estate sector to contribute to the solutions to these challenges.
Whilst these are the top challenges facing future cities called out by stakeholders, issues perceived to matter most at an organizational level might vary, depending on a company’s business portfolio, targeted market, locations of operation and other factors. With valuable insights from stakeholder research, property developers are able to identify the most material environmental, social and governance issues to focus on for strategy formulation and sustainability disclosure. By taking a targeted approach, companies can craft action plans in contributing to priority issues that they can make the most impact, meeting stakeholder expectations, and ultimately driving value for their business.
tips for getting the most out of stakeholder engagement
When properly planned and executed, stakeholder engagement can deliver value in the ongoing learning of an organization. Here are four considerations for designing meaningful programs to engage stakeholders.
Develop a stakeholder engagement plan that outlines the approach for identifying stakeholders and deciding how and when to engage with them. A clearly defined process establishes the credibility of the engagement outcomes for external reporting and internal management.
Adopt consistent methodology in periodic engagements to allow observation of trends in changing stakeholder expectations over time.
Utilize independent third-parties and anonymity principles to encourage greater stakeholder involvement.
Communicate to the board the results of stakeholder engagement, and connect the insights with decision making processes in business strategy and risk management to demonstrate how the company is responsive to the needs and concerns of stakeholders.
To build sustainable cities, no one can do this alone and no one should be left behind. Stakeholder engagement is a collaborative process that opens up opportunities for businesses to build trust and accountability through listening and responding to stakeholder expectations while staying focus on issues that matter the most.
A certified B Corporation®, PIE Strategy is a boutique consultancy specializing in stakeholder research and designing bespoke engagement programs and sustainability strategies that help companies connect business success with social progress and environmental conservation.
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