8/8/2019 13 Stakeholder Management & Sustainability Reporting
1/25
11
COM 362: Decision Making for Responsible andCOM 362: Decision Making for Responsible andSustainable Global BusinessSustainable Global Business
Dr. Monika WinnDr. Monika Winn
Professor of Business Strategy and SustainabilityProfessor of Business Strategy and Sustainability
UVic BusinessUVic Business
Stakeholder ManagementStakeholder Management&&Sustainability ReportingSustainability Reporting
8/8/2019 13 Stakeholder Management & Sustainability Reporting
2/25
8/8/2019 13 Stakeholder Management & Sustainability Reporting
3/25
33
LEARNING OBJECTIVESLEARNING OBJECTIVES Understand the expanding scope of strategicUnderstand the expanding scope of strategic
stakeholder managementstakeholder management
Learn how firms may determine immediatelyLearn how firms may determine immediately
important (salient) stakeholdersimportant (salient) stakeholders
Understand sustainability reporting asUnderstand sustainability reporting as a response to calls for greater transparency, disclosure anda response to calls for greater transparency, disclosure and
accountabilityaccountability
a means to retain a firms social license (LTO, LTG)a means to retain a firms social license (LTO, LTG) an effort to manage reputation and stakeholder perceptionsan effort to manage reputation and stakeholder perceptions an emerging (and imperfect) sciencean emerging (and imperfect) science
Place stakeholder management in the SVFWPlace stakeholder management in the SVFW
8/8/2019 13 Stakeholder Management & Sustainability Reporting
4/25
44
A Changed Landscape:A Changed Landscape:Todays Corporations Face Tough Demands
Rise of civil societyRise of civil society
Calls for corporate accountability & transparencyCalls for corporate accountability & transparency
Power of social movementsPower of social movements
IT & rapid, worldIT & rapid, world--wide information disseminationwide information dissemination
Need to maintain social licenseNeed to maintain social license
LTO, LTG: License to Operate, License to GrowLTO, LTG: License to Operate, License to Grow
From environmental to tripleFrom environmental to triple--bottom line reportingbottom line reporting
New business modelsNew business models
Disruptive changeDisruptive change
8/8/2019 13 Stakeholder Management & Sustainability Reporting
5/25
55
Stakeholder ManagementStakeholder Management
8/8/2019 13 Stakeholder Management & Sustainability Reporting
6/25
66
StakeholdersStakeholders
What is a stakeholder?What is a stakeholder?
Why do we consider stakeholders?Why do we consider stakeholders?
Who do you consider to be a stakeholderWho do you consider to be a stakeholderand why?and why?
8/8/2019 13 Stakeholder Management & Sustainability Reporting
7/25
77
TheTheCorporationCorporation
SuppliersSuppliers
GovernmentsGovernmentsCustomersCustomers
CompetitorsCompetitors
Societies &Societies &CommunitiesCommunities
MediaMediaManagementManagement
Board of DirectorsBoard of Directors
EmployeesEmployees
Investors,Investors,Shareholders,Shareholders,
OwnersOwners
Special InterestSpecial InterestGroups, NGOsGroups, NGOs
InsurersInsurers
StakeholdersStakeholders
InternationalInternationalAgenciesAgencies
FirstFirst
NationsNations
8/8/2019 13 Stakeholder Management & Sustainability Reporting
8/25
8/8/2019 13 Stakeholder Management & Sustainability Reporting
9/25
99
TheThe
CorporationCorporationSuppliers,Suppliers,
InsurersInsurers
GovernmentsGovernments
CustomersCustomers CompetitorsCompetitors
Societies &Societies &CommunitiesCommunities
MediaMedia
EmployeesEmployees
InvestorsInvestors
IndustryIndustry
buyers ofbuyers ofproducts &products &
servicesservices
capitalcapital labor, ideas,labor, ideas,expertise,expertise,
valuesvalues
publicitypublicity
regulation,regulation,legal systemlegal system
normsnorms
innovation,innovation,best practicesbest practices
IntlIntlAgenciesAgencies
inputsinputs
SubstitutesSubstitutes
NGOsNGOs
health concerns,health concerns,values, social licensevalues, social license
advocacyadvocacy
ProfessionalProfessionalEnvironmentalEnvironmental
ServicesServices
knowledge,knowledge,skillsskills
Stakeholders & Drivers of ChangeStakeholders & Drivers of Change
innovation, newinnovation, newtechnologiestechnologies
FirstFirst
NationsNations
standardsstandards
legallegal
rightsrights
8/8/2019 13 Stakeholder Management & Sustainability Reporting
10/25
1010
Salience of Stakeholders to a FirmSalience of Stakeholders to a Firm
PowerPower
LegitimacyLegitimacy UrgencyUrgency
Government regulation
Customer buying power
Shareholder investment
Labour unions
Competitors
Environmental activists
NGOs
Media
Local community
Employees
Suppliers
Mitchell, Agle & Wood, 1997Mitchell, Agle & Wood, 1997
The stakeholdersThe stakeholders powerpower to influence the firmto influence the firm
TheThe legitimacylegitimacy of the stakeholders relationship with the firmof the stakeholders relationship with the firm
TheThe urgencyurgency of the stakeholders claim on the firmof the stakeholders claim on the firm
8/8/2019 13 Stakeholder Management & Sustainability Reporting
11/25
8/8/2019 13 Stakeholder Management & Sustainability Reporting
12/25
1212
Power, Legitimacy & UrgencyPower, Legitimacy & Urgency
Careful analysis of environmental, safety, healthCareful analysis of environmental, safety, healthand economic considerations had convincedand economic considerations had convincedindependent experts, Shell UK, and the Britishindependent experts, Shell UK, and the Britishgovernment that this was the best option.government that this was the best option.
An emotive Greenpeace campaignAn emotive Greenpeace campaign (urgency)(urgency) gavegaveit symbolic significanceit symbolic significance (legitimacy)(legitimacy) beyond anybeyond anyrational, scientific calculation of its impact.rational, scientific calculation of its impact.
Political and public pressurePolitical and public pressure (power)(power) on Shellon Shellcompanies on the Continent, and the growingcompanies on the Continent, and the growingsafety threat, forced Shell UK to abort its planssafety threat, forced Shell UK to abort its plans
Shell briefing document 27, July 1995Shell briefing document 27, July 1995
8/8/2019 13 Stakeholder Management & Sustainability Reporting
13/25
1313
Managing StakeholdersManaging StakeholdersStrategicallyStrategically
Managing StakeholdersManaging Stakeholders
Traditional stakeholder viewTraditional stakeholder view Power, Legitimacy, UrgencyPower, Legitimacy, Urgency
How does this view perceive the relationshipsHow does this view perceive the relationshipsbetween the firm and its stakeholders?between the firm and its stakeholders?
Engaging with StakeholdersEngaging with Stakeholders
Including not only salient (primary orIncluding not only salient (primary orsecondary), but also fringe stakeholderssecondary), but also fringe stakeholders How does this view perceive the relationshipsHow does this view perceive the relationships
between the firm and its stakeholders?between the firm and its stakeholders?
PP
LL UU
8/8/2019 13 Stakeholder Management & Sustainability Reporting
14/25
1414
Sustainability ReportingSustainability Reporting
What is a sustainability report?What is a sustainability report?
What is sustainability reporting?What is sustainability reporting?
Why is this difference important?Why is this difference important?
8/8/2019 13 Stakeholder Management & Sustainability Reporting
15/25
8/8/2019 13 Stakeholder Management & Sustainability Reporting
16/25
1616
Sustainability ReportingSustainability Reporting
How is sustainability reporting related toHow is sustainability reporting related tostakeholder management?stakeholder management?
8/8/2019 13 Stakeholder Management & Sustainability Reporting
17/25
1717
Sustainability ReportingSustainability Reporting
A ContinuumA Continuum
PDF Report Multi-
stakeholder
virtualdiscussion/
debate
Available
online
Emails
one-way
communication
Two way
communication
Stakeholder Management
Pushing info out
Limited understanding
Firm view
Stakeholder Engagement
Stakeholder accessibility
Data collected on users
Opportunity to respond
Web-Based
Reporting
8/8/2019 13 Stakeholder Management & Sustainability Reporting
18/25
1818
Shell and the Ogoni PeopleShell and the Ogoni People
The Execution of Ken SaroThe Execution of Ken Saro--WiwaWiwa
Shells call for quietShells call for quietdiplomacy in the 11diplomacy in the 11thth hourhourfollowing the confirmation offollowing the confirmation ofthe death sentence by thethe death sentence by the
Nigerian Ruling Council has aNigerian Ruling Council has ahallow ring. Shell had amplehallow ring. Shell had ampleopportunity to demonstrateopportunity to demonstrateconcern over the 17 months ofconcern over the 17 months ofKens incarceration and trial.Kens incarceration and trial.They chose to maintain theirThey chose to maintain theircozy relationship with thecozy relationship with the
military dictatorship to securemilitary dictatorship to secureoil profits rather thanoil profits rather thancondemn, the brutal andcondemn, the brutal andunjust arrest and laterunjust arrest and latersentencing of nonsentencing of non--violentviolentenvironmental campaignersenvironmental campaigners(November 10(November 10thth, 1995, UK Newspaper), 1995, UK Newspaper)
8/8/2019 13 Stakeholder Management & Sustainability Reporting
19/25
1919
2005 Sustainability Report2005 Sustainability Report
But opposition to the project remained amongBut opposition to the project remained amongsome community members concerned about thesome community members concerned about thesafety of the onshore pipeline, about real benefitssafety of the onshore pipeline, about real benefitsfor the local communityfor the local communityWith hindsight, we underestimated the intensity ofWith hindsight, we underestimated the intensity ofthe opposition and its impact on this community.the opposition and its impact on this community.By focusing on obeying the law and following theBy focusing on obeying the law and following the
permitting process, we paid too little attention topermitting process, we paid too little attention tothe communitys concerns, to communicating thethe communitys concerns, to communicating theprojects safety features and to finding ways forprojects safety features and to finding ways forthe community to benefitthe community to benefit
Shell 2005 Sustainability ReportShell 2005 Sustainability Report
8/8/2019 13 Stakeholder Management & Sustainability Reporting
20/25
2020
Audio Clip of the son of executedAudio Clip of the son of executedKen SaroKen Saro--WiwaWiwa
International Finance CorporationInternational Finance CorporationSustainability Learning ProgramSustainability Learning Program
20032003
8/8/2019 13 Stakeholder Management & Sustainability Reporting
21/25
2121
Sustainability ReportingSustainability Reporting Lessons LearnedLessons Learned
About a firms environmental performance?
A firms social performance?
About the role of reporting standards?
Any tie-in to competitive advantage?
Other?
8/8/2019 13 Stakeholder Management & Sustainability Reporting
22/25
2222
Sustainability ReportingSustainability Reporting
TripleTriple--Bottom Line PerformanceBottom Line PerformanceAnnual ReportsAnnual Reports
add Environmental Reportsadd Environmental Reports on to Sustainability (TBL) Reportson to Sustainability (TBL) Reports
Global Reporting InitiativeGlobal Reporting Initiative emerging standards for comparable reportingemerging standards for comparable reporting
performance criteriaperformance criteria
measures & metricsmeasures & metrics
8/8/2019 13 Stakeholder Management & Sustainability Reporting
23/25
2323
What is the Role of Stakeholder Mgmt in the SVFW?What is the Role of Stakeholder Mgmt in the SVFW?The Role of Reporting?The Role of Reporting?
Internal External
Tomorrow
Today
Sustainable
Shareholder
Value
8/8/2019 13 Stakeholder Management & Sustainability Reporting
24/25
2424
SUMMARY (1)SUMMARY (1)
Stakeholder Management rose in parallel to the growth of corporations in size,
economic power and environmental/social impact
goes beyond a narrow shareholder orientation
utilizes P-U-L to assess immediately importantstakeholders
broadens how and with whom firms conduct business
8/8/2019 13 Stakeholder Management & Sustainability Reporting
25/25
2525
SUMMARY (2)SUMMARY (2)
Sustainability Reporting is an evolving learning process for firms (and entire
industries) and their myriad of stakeholders
is another example of innovation (societalinnovation as much as business innovation) and assuch contains opportunities for yourself
Sustainability Reports are a means of corporate communication
are a response to pressures from an increasinglyskeptical civil society to reveal corporate action andaccountable
are an effort to retain legitimacy: social license,
license to operate, license to grow
Top Related