A Dave and Dharm DeMystify Special Series - From Vision to Impact with Shargiil Bashir

FROM VISION TO IMPACT EP 4 : STAKEHOLDER ENGAGEMENT

• Dave Wallace • Season 1 • Episode 4

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The vital role of Stakeholders cannot be overstated. This includes employees, customers, suppliers, investors, regulators, and communities, all of whom play a crucial role in building trust, gaining insights, and ensuring alignment with sustainability goals. 

For customers, transparent communication about ethical sourcing, climate action, or social impact builds loyalty and trust. Modern consumers are increasingly conscious, often choosing brands that align with their values. 

Investors are increasingly scrutinising ESG disclosures, expecting robust governance structures, effective climate risk management, and long-term value creation. Companies that engage proactively with investors on ESG topics often gain better access to capital and enjoy a stronger reputation.

The process begins with stakeholder mapping to identify who is affected by or can influence the organisation’s ESG performance. Prioritisation follows based on influence, interest, and relevance. Shargiil shares insights from companies like Unilever, their customer engagement; Patagonia, their employee advocacy; Ikea’s transparent communication; and Microsoft's Goal to achieve negative carbon emissions by partnering with their clients, which have successfully engaged stakeholders to implement sustainability practices.

Stakeholder engagement should be an ongoing process, integrated adequately into strategy development, performance reviews, and ESG reporting. Ultimately, true sustainability is co-created, and engaging stakeholders meaningfully ensures initiatives are grounded in reality and drive long-term impact.

Shargiil examines the risks of ignoring stakeholder concerns, including reputational damage, regulatory backlash, and missed opportunities, all of which could pose significant risks to your business.

SPEAKER_03:

Once we are looking to make something better for everyone, we need to make sure that all the voices of the difference are heard and included and addressed. And that's where stakeholders play such an important

SPEAKER_00:

role. The focus of episode four is stakeholder engagement. Shargil talks through why it is critical to engage with stakeholders, how to undertake mapping to identify the key ones, and how to ensure that they feel part of the process. He gives a number of examples of companies that have successfully engaged with internal and external stakeholders.

SPEAKER_01:

Welcome to this next episode of From Vision to Impact, Implementing Sustainability in Your Business, the podcast that we're recording with Shargeel Bashir about understanding and demystifying sustainability and how to implement sustainability. So today we're looking at chapter four of the book, which is about stakeholder engagement. And again, Shajil, I wanted to just start by reading the quote that I think is your quote at the start of the chapter, which I think really sets out what the challenge is. And so Shajil, I shall read it out now. The challenge of sustainable development is the challenge of creating a world that is better for everyone, not just a select few. It's about creating a world that is sustainable for generations to come. This requires the harmonious collaboration of diverse voices where stakeholders not just heard, but actively engaged in the composition of meaningful change. And I think, you know, that kind of summarises everything in terms of making sure that people are heard and engaged. So, yeah, well, why don't we start with you just giving us a few of your high level thoughts around stakeholder engagement and why it's so critical.

SPEAKER_03:

Yeah, thanks, Dave. And thank you for reading out the quote. And maybe let's just start there. And I think if I have to just take the essence of that quote, why I think it's so important is that for me, everything linked to sustainability comes down to making a better planet for everyone, right? Right. And for the future generations. And we all can play a role in a different ways into this, right? And that's why stakeholders are so important because once we are looking to make something better for everyone, we need to make sure that all the voices of the difference are heard and included and addressed, right? And that's where stakeholders play such an important role. And stakeholders comes in so many different shapes and forms, so to say, right? It can be for organization, this can be everything from your customers to your employees, to your shareholders, to your regulators, to your suppliers, like unlimited list, right? And how is it that we can make a better planet? We can only do this by engaging with all of these different stakeholders, right? And that's why it's so, so important. And that's why I think that this is one of the chapters that I think in the book are critical to understand because One thing is that, as we have previously discussed, we can set goals, we can assess our starting point, we can start doing reporting and so on. But if you don't truly understand your stakeholders and how you can work with them, influence them, collaborate, partner with them, most likely you're not going to really get any results, right? And I think that's why it's so important because stakeholder for me in this discussion are both them you are trying to help and support, but also the ones you need to partner with and try to make that change with as well. And that's why I think that, you know, for me personally, this was one of those chapters that I think were, for me when I was writing it, was one of the most foundational ones because sustainability is so dependent on your stakeholders and managing those. Because I think you've heard many times, and I'll say it again and again and again, no single person, entity, industry can solve and make a better planet. We need everyone. We need efforts from everyone. And that's why stakeholders are so important. And managing stakeholders is so important.

SPEAKER_01:

But I love that. aspect of this is about partnership and collaboration as well so you know this really requires everybody's involvement and you know you can't just go and tell people what to do they've got to feel it here in terms of um that their sort of sense of what they need to do as well so I mean one of the things I was kind of keen to understand like if you are a business is is how do you know who your stakeholders are? How do you kind of identify your stakeholders?

SPEAKER_02:

Yeah,

SPEAKER_03:

very good question, right? And I think, again, from different industries, size of a company or the complexity of companies can make stakeholder mapping very, very different and very, very difficult as well, right? But I think you can start with the simple and obvious one. And I write about those into the book as well to say, Let's start with the very first one, which is the core for every company is about your customers, right? And your customers for some companies, it can be your internal customers, but for many companies, it will be your external customers specifically. So you could have a look into that, you know, this is my external customers. If those are my stakeholders, how do I manage them? And what's important from a sustainability perspective for my external stakeholders, for my clients specifically, right? If it's specifically around my product, which part of my product is important for my clients? Is it the packaging of it? Is it the taste of it? Which part of it, right? Depending on your specific product to say, then that angle, how do I make that more sustainable?

SPEAKER_02:

As

SPEAKER_03:

an example, if let's say it was something food related, then you can say, okay, if I start changing the composition that goes into my product and make it more sustainable, does that affect the taste? If it does affect the taste, is it for the better or worse? And how do I engage with my customers and clients to get a feel for that? It might just be a simple thing as a packaging, right? How can I move this to a more sustainable recycling packaging as an example? So again, so I think, you know, customer are some of your most key stakeholders, but probably also some of them, the most challenging to understand when it comes to sustainability, because how can you engage with them and get that understanding? And that's very, very important because you could have a product that has a variety of generations that use it, right? And we do know what we are seeing is that the younger the generation, the more focused on sustainability it is. So that might also create some kind of challenge, right? And that's something you need to take into account as well when you're trying to understand your stakeholders.

SPEAKER_01:

Just in terms of understanding those stakeholders, I guess that's about going and talking to them maybe and doing surveys and...

SPEAKER_03:

Absolutely. I think, first of all, it's, you know, you understand the importance, then you start, you know, identifying those key stakeholders, and then you start engaging with them. And exactly as you mentioned, this can be done by quantitative, qualitative discussions. It could be done to surveys. Sometimes a lot of external research has already been done and data, and then you, you know, start getting that perspective. It might also be that, you know, you have already some customer satisfaction surveys being done already. How can you enhance those specifically from that perspective. You also have companies who really succeeded in setting up some focus groups as well to get some input from that perspective. So I think that that's a very important part. And then it's about building relationship, right? Because once you have then identified those stakeholders and you start engaging with them, how do you then start building relationship with them as well? And I think if you had to say that the three things will go again for all the different stakeholders, I believe, which is, first of all, you understand the importance of that stakeholder, you identify them specifically, and then you start engaging with them and then continue building a relationship with them, right? So I think that's the same whether we are speaking about employee stakeholders, customer stakeholders, or you're speaking about regulators or investors. I think it's important that you go through those steps specifically that could work for all your different kinds of stakeholders. But you're absolutely right. You're need to engage with them through service and so on. And then you start need to building that relationship with them, right? Because you can't start all over again and again and again, every time you need to start building that relationship with them. And to say, again, when we go back to the partnership, how can we partner and co-create for a better planet as well?

SPEAKER_01:

No, fantastic. So you've talked about employees as stakeholders, and I think it's really super critical that we kind of go in depth into them as a group as well, because if you don't take your employees with you on this journey, then you might find yourself as a lone voice in the organisation. So can you talk a bit about employee engagement and the criticality of that, and actually how you go about ensuring that you can get employees as stakeholders involved.

SPEAKER_03:

Yeah, and I think, Dave, you're absolutely right. Employees are critical for any transition or journey you're going through. It doesn't even have to do with sustainability, right? Like I think the most successful companies we've seen over the past decades are the ones who have truly managed to engage and address this key stakeholder group, which are your employees, right? Because as you say, employees are the key to successful any organization right so so it all depends on how well you manage your employees for this so first of all going back to some of the discussions we've had around the previous chapters the burning black platform is very very important you need to explain to the employees why is this important right i think both you and i have worked in organizations and every year things get on top of other targets, KPIs, and so on. It's very rare that things you were used to doing get removed from you when everything new comes in. Typically, it's just your capacity that gets bigger from year to year. And that's why it's very important that as a leadership and as an organization, you need to show the burning platform, you need to explain the why. Why is it that we are doing this? Because if your employees don't understand the why, you're not gonna get them committed to do this. And I think that's unfortunately something, you know, a lot of organizations miss that they don't explain the why. They might be explaining it, you know, once, but you need to keep repeating that. That why is so important for employees to understand. Once they understood those, I think that, you know, then we can go going back to the conversation we had in the previous episode about setting the goals, right? Because then you can start setting, okay, what is the ambition? What are the goals? And then you start drilling it down to a KPI that you need to meet, right? And again, people will meet the KPIs because typically some KPIs are linked to remuneration or other kind of setups in organizations. But if you really want to truly embed this in your organization, linking the why together with the goal and what is it that needs to be achieved can be that success that really makes you as an organization excel and accelerate your journey.

SPEAKER_01:

No, that's interesting because I think, you know, I guess I've worked in businesses where they've talked about their sort of their missions and visions. And sometimes I have to confess, I've sort of felt a disconnect between what they're saying and the kind of reality of what's kind of happening. And I think, you know, the importance of this is making sure that people understand the why, but they understand why. you know, and again, going back to what you talked about in terms of targets and goals, what it really means to them day to day and what it means to them now and next year and a bit into the future as well. And I think last time you talked a bit about like Unilever time, remuneration to their ambition. And I thought that was really interesting as well. But I think, you know, going back to the business as well, there's a lot of things you talk about in your book about, things like open and transparent communication that is really critical as well. So reminding people on an ongoing basis as to what's going on. Can you sort of just give us a bit of a sense of some of the things that you think beyond sort of communication are really important as well?

SPEAKER_03:

I think, yeah, I think for me, communication has always been and will continue being the key, right? Because it's so important when you're managing your stakeholders that, as you mentioned, you need to explain the why and you need to continue continuously updating and communicating with your stakeholders, right? And just like as we discussed previously, you can do surveys, you can do employee engagements for the different stakeholders and so on. But if you don't communicate, as an example, the outcome of this survey or the outcome of employee engagement, right? Because if the result is good, you're happy to communicate. But if the result is not good, you're not keen to communicate. People see through this, right? We need to be transparent, open into this communication to say, how can we do this, right? And for me, I think some of the things that are very important, and other things you can do is also, involving your stakeholders into the decision making, right? So as an example, you can set up a advisory board or some external viewpoints that can help you support in getting some inputs from these different stakeholders, right? This can be done in a bilateral basis. This can be done through a focus group. This can be done through workshops because you need that input when you're trying to understand the viewpoints of your stakeholders. Because sometimes what unfortunately organizations end up doing is that they get so focused on that long-term ambition or goal or target they have set that they forget that are they moving in the right direction. It suddenly becomes a question of speed and not a question of direction. And that's why it's super important, right? Because when you're bringing thousands of people or hundreds of people with you, sometimes people will just listen to what you say and then they will just put on the speeder and just run all the way they can. Instead of saying, am I running in the right direction? And that's why it's so important that, you know, it's just like driving a car. It's not only about the speed. It's also a question of where are you driving your car to. And that's so important. The same with the stakeholders, right? You might have a direction you have set, but the stakeholders can help you navigate that you're going in the right direction. And that's why it's so important to bring them into this discussion. So it doesn't just become a question of speed.

SPEAKER_01:

No, no, I think it's great. But I love your point around active involvement. So, you know, I think sustainability and climate change can be really overwhelming for a lot of people. I mean, I'll give you a small example of active involvement and the difference it can make is I'm a champion for my local river. You know, I go out and I measure water quality on a regular basis. And I often talk to people about the issues of the river, but it's not until I involve them in coming and doing testing with me and getting their hands dirty that you can kind of see the penny drop. So getting people actively involved in these things is such an incredibly helpful way, I think, to get them to understand the broader picture as well.

SPEAKER_03:

Dave, you're so spot on, right? Because again, just as you mentioned on the river, right? I had a very good discussion recently where people were asking me that, you know, we hear about the world's global warming, that we need to keep it well under two degrees, ideally to 1.5 degrees. But they were saying, listen, I've seen the temperatures raising, you know, three, four, five degrees where I live. And I'm fine, right? We found mitigation. We got air conditioning and so on. So what's the issue, right? And it's just about explaining to people. And I think it's very important. And now I'm trying to simplify it. But a lot of people don't actually really understand this. And that's why you're saying communication to your stakeholders is so important. Because I'm saying that, you know, once you have fever, we all try to have fever, right? So and again, I'm going to use, you know, the degree. So if you're having a 37 degrees is relatively normal. Then you go to 38 degrees. Once you start going above 40 degrees in fever, you start feeling it in your body. You can't get up. You might be just lying in the bed. You're not feeling well. You'll probably go to a doctor because basically your body is starting to shut down. And we all understand that. So basically going from 37 to 40 degrees, we all understand how our body is being impacted. Now look at the whole globe as a body and start seeing that basically what we are doing is that we have gone constantly from 37 degrees to 38 and a half degrees. That's where the world is right now. And people are fearing that we might get to four or five degrees, which will be unbearable. And that's actually what it's going to do to the world, right?

SPEAKER_01:

I think as an explanation, it's fantastic. I mean, I think... All men out there would probably understand that at 38 and a half degrees, we feel pretty miserable. I think, you know, what do they describe? Man flu or something like

SPEAKER_02:

that. Exactly.

SPEAKER_01:

So I really like that. And I think it's sort of finding ways to kind of communicate this that people understand is important. is so critical to that stakeholder engagement. And

SPEAKER_03:

involving, exactly as your example, right? Involving them so they can really start seeing the difference, right? And it's the same thing. So many of us, when we go to some places that have been really impacted by the global change and global warming, when we see that, we really realize, wow, that's a huge issue. And that's where the penny drops. And I think that's why that communication to all stakeholders is so important. And this needs to be done by all kinds of organizations so we cover as many people as possible and we can share with them the different impacts their decisions, active, inactive decisions can have.

SPEAKER_01:

Fantastic. Well, look, I was keen that we talk through a few examples of businesses which have... publish some thoughts around stakeholder engagement. So we're going to start by talking about Unilever and I guess what we'll talk about with them is sustainability and consumer engagement. So can you talk a bit about the Unilever case study? Yeah.

SPEAKER_03:

So we've already previously discussed Unilever a couple of times, and I think Unilever is probably one of the companies I mention a lot in the book. First of all, because they're really, really good at sharing their information publicly, making that available and sharing their experiences to be inspiration for others. But also because they have been working on this for a long, long So they introduced what they called the sustainability living plan, which was basically had multiple layers that, you know, which was engaging with different kind of stakeholders. But one of the things they really did was to say, how do we engage with the stakeholder group of consumers, you know, who are paying for our products and work with them and co-create? So what they basically did was that, you know, brought together a lot of those stakeholders and say, OK, you know, what are the customers preferences when it comes to packaging? Right. So when we are starting to look into sustainable packaging, what are the consumers preferences when we start looking into? So basically what they were trying to align is to say we want to align better customer experience, but at the same time achieving our sustainability goals. So how can we do this? And one way to do this is, okay, let's bring together and let's co-create this, right? Let's figure out what are the preferences of our clients and get that feedback. And they did this through online surveys. They had focus groups, physical coming together, which helped them improve their product design, but also helped them enhancing their customer satisfaction as well from that perspective. And making sure that you're getting that input from the actual users of your product to say that, you know, this is basically what I would like to have, right? And I think that is such a good example of where you're bringing in a co-creation creativity to exactly support and address your clients and

SPEAKER_01:

customers. Fantastic. And then Patagonia, which I think you showcase as an example of engaging employees, right? and advocacy for environmental causes.

SPEAKER_02:

Yeah.

SPEAKER_03:

Patagonia is such a, again, a fantastic leader within the topic of sustainability. And I think for me personally, I think it's a company I have seen that has truly embedded sustainability within their organization. I had a pleasure at the New York Climate Week last year to listen to a panel where the CEO of Patagonia was there, where it was so important to hear and listen to how they are truly embedding sustainability across everything. Like sustainability is almost like their core value. They start from there on and then everything comes after that, right? And one of the things they did was basically that they have decided to donate 1% of their revenue, not their profit, of their revenue to environmental organizations, NGOs and support from that perspective. And what they do at the same time is they give their employees opportunity to directly work with these organizations. So they give them the opportunity to take some time off work specifically to go and work with these organizations to really help and support from that perspective. So first of all, what that does, it helps those environmental organizations. It's benefiting the planet overall because these organizations are trying to support for a better planet. But it's also raising awareness with the employees on these topics as well. If I remember correctly, what they're also doing is they're also asking the employees the option to bring in their families and friends to this as well. So it's raising awareness at the same time. And again, for me, it's just a win-win-win, right? It's creating a win for the planet. It's creating a win for those environmental organizations that are trying to do a difference. And it's creating a win for the employees because you're raising their awareness. And what you get at the same time, you get more information engage employees on this topic as well.

SPEAKER_01:

And again, I've sat on the other side with Patagonia where, you know, actually, I've actually sought funding from them. And it's really interesting because as an organisation, often, you know, if you're looking for funding, it can be very difficult to find those opportunities to get funding. But actually, they make it really easy. And, you know, they know exactly what they're looking for in terms of the projects that they're looking to support as well. So, you know, not only do they do this, but they make it easy for people then to, and NGOs and small groups to actually kind of get in contact with. I think they're a fabulous example. And, you know, I think as a company, one that sort of really shines out. You also talk about, IKEA in terms of transparent communication and customer involvement as well. So can you sort of expand on IKEA as well, please?

SPEAKER_03:

Yeah, IKEA, again, a fantastic example coming from Scandinavia has been working on the topic of sustainability for a long, long time. And I think, again, you know, we all know, some people know and hate IKEA for multiple reasons. They don't want to spend a weekend in there and others enjoy it. Right. I mean,

SPEAKER_01:

if you could see in here, it's sort of like an IKEA showroom. Exactly.

SPEAKER_03:

It's fantastic, right? And what they have done so well is, first of all, really been good with the communication on what is it their products are doing from a sustainability perspective, which is unique through, you know, again, whether you're doing it across their channels, if you go to a IKEA store or whether you're looking on the website or application and so on, they do so much to say that, but also show it in their stores. And I'm just going to come back to that. But one of the things they did, and I think they were probably one of the early adopters, I'm starting to see this, many other companies taking that forward. What was basically that, you know, they introduced this by back program that if you had some old furniture instead of just throwing it out and you know it will end up in a landfill somewhere and so on come back to this with Ikea and you know you get a percentage back or something from that perspective right and I think we have started to see more and more companies adopting that buy back program and I think they were definitely one of the first ones to do it from a furniture perspective but now I'm seeing it multiple places right I think Apple have started something similar that you can come with the old iPhone to them I'm starting to see a lot of clothing companies to take that approach as well. They say that, you know, that can help you from a recycling perspective of that clothes as well. But what I think IT also does from a communication perspective, which is fantastic, is if you've been to one of the IKEA restaurants in their stores, what you see is actually their own products they're using all the time for the benefit of recycling, right? So what you do is that, you know, if you're having lunch there, you will see that, you know, the plate you will use is the plate you can and go downstairs and buy in the store as well. And then they were telling you that, you know, this plate will get reused X thousands of times by, you know, through the dishwashers and et cetera. And what's gonna be the benefit of that versus had you just used a single use, a plastic kind of a cutlery or plate or whatever it might have been. So again, I think they just show, they walk the talk, right? They show this through their communication, They're giving you some specific offering as a consumer to say, if you're having some of our old furniture, please come back with this. We're going to give you some credit for this from that perspective. But also, if you're going there, you're actually seeing the examples used by themselves that can help you.

SPEAKER_01:

Which goes back to that whole thing of involving people in the, you know, don't just tell people, involve them as part of the process. That engagement, right? Engagement is so critical. So you also talk about Danone and Tesla, and I'm very conscious of time, so people can read about them in the book. I thought finally it'd be great to touch on Microsoft as well, because they've made a commitment not just to get to zero, but to go negative in terms of carbon. And I'm really interested in this, because the big tech firms are facing... I guess a dilemma because, you know, as things like AI and cloud computing kind of really, really get more and more established and bigger and bigger and more used, you know, the big tech companies like Microsoft, their carbon footprint's are going one way as far as I'm concerned. They're going up and yet they've made this commitment to go negative. So can you talk a bit about sort of Microsoft and what they're doing and how they're involving stakeholders as part of that?

SPEAKER_03:

I think Microsoft is quite unique from this perspective, right? Because I think while others are doing things to reduce their emissions, which of course Microsoft is as well, but exactly as you're saying, what Microsoft also, I think, has realized is that with all the data centers and the need for all the services, technology, their emissions might actually go up, right? Because we need more data sensors than the world ever needed, I assume, right? And you're the expert on that part, Dave. But I think that that's at least for me sitting outside, what I'm seeing is. But what they've done is, which I think is so fantastic, again, coming back to the customers and managing the stakeholders and partnering with them, is to say, we are going to help our clients reduce their emissions, right? because that is also gonna help us reduce our emissions, right? So you basically almost created this pay it forward kind of a mentality to say, okay, how do we help them from that perspective, right? So again, linking a little bit into the way Unilever was doing, they're trying to co-create solutions, they're trying to work with the different partners. These can be banks, these can be other IT companies, these can be different kinds of suppliers and so on to looking into everybody who's using their services, cloud services, products and so on to say, you know, how can we co-create from that perspective and help you reduce your emissions? So what is it that this industry needs? Does they need some kind of different kind of programs? Is that how we can support them? Is it related to different kind of offers we have today that services that we can start changing that can help them from that perspective? And also they're starting to work so much into the different part of management systems that can, first of all, enlighten you on your own sustainability, emissions kind of information, but then also, how can we help you support reducing this, right? And they're not doing it as a, at least to my understanding, as a product offering, they're doing it as a partnering. That for me is a very, very different approach, right? It's not like, you know, I need to buy a product from them. It's more about partnering because again, if I reduce my emissions, that will help them reduce their emissions, right? So I think that approach is truly interesting. And I think we're going to see in order to achieve, and I think we've discussed it in a couple of previous discussions we've had is that the journey to the transition and achieving net zero and aiming for a better world will only happen through partnership. And I think that's where Microsoft is truly coming across and showing their leadership by saying, OK, you know, how do we partner on this? Right. And then you're actually seeing it also beyond sustainability, because I think when I'm looking across the partnership, then trying to create in the AI space, et cetera, seems to me sitting outside is about, you partnerships, how do we bring this together? And again, going back to creating these win-win-wins for everyone for a better planet.

SPEAKER_01:

Fantastic, fantastic. Well, listen, just sort of final point, I guess, is if, and we've talked, you know, in the other episodes we've done this, is if people want to think about, you know, getting stakeholders engaged today, what's the first thing that they should do? I

SPEAKER_03:

think the first thing I will do is, of course, you need to identify your stakeholders. That's the step number

SPEAKER_01:

one. I mean, it's a super critical thing. Yeah, it

SPEAKER_03:

is. And I think sometimes people just say, oh, we only have a few stakeholders. You need to identify all of them step by step. And honestly, for me, your stakeholder map is a live map. When you start plotting them in, you will always start getting new and new stakeholders. Even if your clients, your clients can be so many different that you start getting new types of clients. And that's a new kind of stakeholder. And I think sometimes people forget that. As an example, Generation Z as clients are very different than the boomers as a client. So that's very important to remember that. But again, simple thing. First of all, identify your stakeholders and then start engaging with them and setting up relationships and managing those relationships, right? Keeping that very simple. Identify them, start engaging with them, and then build a relationship with them. I'll say that those are the key things that you need to focus on. And then there's all different kind of ways to do those three steps, as I mentioned. But I think those are the three things. Identify, engage, and build those relationships.

SPEAKER_01:

Fantastic. Well, thank you so much. Thank you so much for having me, Dave.

UNKNOWN:

Thank you.

SPEAKER_00:

Thank you for tuning in to Dave and Darm Demystify. We hope you enjoyed the show. Don't forget to like and subscribe and tune in next time as we take another topic and demystify it.