Managing sustainability-related risks through stakeholder analysis

July 7, 2022

While many businesses have implemented policies and procedures to manage sustainability-related risks, they tend to be solely focused on the company itself or its immediate operations. Building a program that responds to the needs of all stakeholders requires undertaking an analysis on a case-by-case basis, through all levels of the organization and supply chain tiers.

What topics need to be addressed on a per-stakeholder basis?

Employees

—Providing time and resources for employees to volunteer and participate in educational and ecological activities (association fees reimbursed, journées solidaires)

—Providing time and resources for employee health, well-being and care-taking responsibilities

—“Lifelong learning” approach to professional development, including skills training, diversity and inclusion training and climate change training

Suppliers

—Responsible contractor policies to ensure that contracted workforce receives fair treatment

—Occupational safety and health protocols to protect workforce from human rights and climate change risks

—Making resources available not only to salaried employees, but also consultants, independent contractors and workers in other tiers of the value chain

Consumers

—Educating customers on the risks of over-consumption, over-indebtedness and purchasing decisions

—Encouraging customers to make climate-positive decisions through rewards, reductions and other incentives

Communities

—Ensuring consistent engagement with communities, social partners and governments

—Ensuring accountability for follow-up on commitments made to stakeholders

—Implementing policies and procedures to prevent, mitigate and remedy adverse impacts on communities

Shareholders

—Developing a shareholder engagement policy to ensure that shareholders are kept informed of the company’s social and environmental performance

—Including social and environmental indicators in annual reports

—Creating a forum for dialogue with shareholders on social and environmental issues

The above are only examples – the particular case will dictate which stakeholders are most relevant and what their specific needs might be. It is important to consider all stakeholders when building a sustainability program, as each one can play a role in managing risk and promoting best practices in both internal and external company ecosystems.

Sustainability-related risks can have a variety of impacts on businesses, from financial to reputational. As awareness of these risks increases, companies are under pressure to address them in a proactive and responsible manner. However, many companies are still struggling to find the right approach. A common challenge is that sustainability risks can be difficult to quantify and predict, making it hard to determine the best way to manage them. Additionally, most companies are only now beginning to develop the internal capacity to address these risks effectively. There are a number of ways to manage sustainability-related risks, but each company will need to tailor its approach to fit its specific circumstances.

Please feel free to reach out to VIVACE for more information on conducting stakeholder analyses.

CPM