ConAgra, Gojo and bringing outsiders into your sustainability plans
ConAgra, Gojo and bringing outsiders into your sustainability plans
To effectively build a credible and valuable corporate responsibility and sustainability program, it is crucial to look not only inside your organization, but also outside.
The insights and perspectives gained from engaging external stakeholders can strengthen your environmental, social governance (ESG) goals and initiatives while also enabling you to report on what matters most to both internal and external audiences.
According to the world’s most widely used sustainability reporting framework, the Global Reporting Initiative (GRI), one of four principles for defining report content is stakeholder inclusiveness. Stakeholders are defined as those who affect or are affected by the organization, such as suppliers, labor unions, regulators and local communities.
Based on the GRI G4 sustainability reporting guidelines, an organization should identify its stakeholders and explain how it has responded to their reasonable expectations and interests.
RobecoSAM’s methodology for the Dow Jones Sustainability Index questionnaire also evaluates companies’ stakeholder engagement activities. They view the relevance of stakeholder engagement from the angle of risk as well as opportunity.
Engaging outside groups may prevent business interruptions or reputational damage. Having dialogue with board members, customers, NGOs and industry experts could lead to new solutions and strengthen the brand.
Doug Park, director of legal policy and outreach at the Sustainability Accounting Standards Board (SASB), agreed that external stakeholders can provide useful insights and perspectives on what factors are likely to have a material impact.
SASB’s mission is to develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors. And SASB walks the talk.
As it develops industry-level standards, SASB uses multi-stakeholder engagement, involving corporate professionals, investors and intermediaries, as part of the process.
"It is important that we talk to stakeholders with industry and sustainability experience and gather a broad and balanced perspective and consensus," Park said.
Investors willing to talk
Timothy Smith, director of ESG shareholder engagement at Walden Asset Management and Carly Greenberg, a Walden ESG analyst, both agreed that engaging stakeholders leads to defining material topics and can unveil significant (or rising-in-significance) ESG issues for your industry and company.
"Some companies are looking primarily to internal leaders to define material and significant ESG risks and opportunities when they should be talking to external stakeholders, including investors, as well," Smith said.
He explained how Walden has demonstrated success in engaging with companies.
"TJX Companies (parent company of TJ Maxx and Marshalls) proactively meets with investors annually to report on sustainability progress and challenges, and asks for feedback," Smith said. "Over five years ago, we urged them to embrace reporting. A year later, they published a detailed and comprehensive sustainability report. Since then, they started reporting to CDP and implemented other recommendations for strengthening their management of sustainability issues."
Smith said that there are many ways to engage stakeholders, from roadshows to one-off dialogues. Those who do it best are proactively reaching out and sharing what they feel are the most important ESG matters and asking stakeholders for their feedback.
For example, Intel has been engaging with Walden and many other stakeholders for years in its quest to launch the first commercially available conflict-free microprocessors.
"This is tremendous leadership," said Smith. "Proactively talking with stakeholders allows you to better understand the realities, the risks and the opportunities, and positions you to respond quicker."
Opening the door to leadership opportunities
"Listening to stakeholders is what led us to our success from the start," said Nicole Koharik, global sustainability marketing director for Gojo.
The family-owned company of hand hygiene products, and inventors of Purell Hand Sanitizer, adheres to the belief of its co-founder, Jerry Lippman, that listening and learning is key to finding new ways to make life better.
In 2011, Gojo published a corporate sustainability policy, which included Sustainable Ways of Working principles, with a core principle being stakeholder collaboration — purposefully engaging in meaningful dialogue with stakeholders and listening.
"This is a way to gain insight that leads to the creation of mutually valuable solutions," Koharik said. "We find the gaps and address them; this is how we stay ahead and make a difference."
In 2015, Gojo conducted a materiality assessment to research and verify its most significant ESG impacts, risks and opportunities. The company turned to stakeholders from across its value chain seeking diverse perspectives, from suppliers, to distributers, to end-users, NGOs and industry experts. Koharik explained.
"We selected forward thinkers," she said. "If we can meet their needs, then we’ll remain the leader as the marketplace evolves."
One example of listening and responding to stakeholder needs is the Gojo end-of-life program for old soap and sanitizer dispensers. Upon removal of the old dispenser, Gojo provides documentation to the customer that verifies the dispensers were recovered and recycled responsibly. To date, more than 20,000 used dispensers have been recycled, which has resulted in diverting 10 tons of waste from landfills.
"We listened, responded, and this is helping us win new business," Koharik said.
Gojo also responded when Staples, a long-time customer and key account, asked the company to participate in the Chemical Footprint Pilot.
"Asking us this question accelerated our progress," said Koharik. Today Gojo is in the process of measuring its chemical footprint, and has a goal to halve it by 2020.
"There are only so many ESG strategies and tactics you can take on," said Koharik. "Engaging in dialogue with stakeholders to determine and verify ESG topics that matter most to them enabled us to set clear goals. We are moving forward aligned and confident in our ESG decisions."
Don’t forget the critics
Chris Kircher, vice president of corporate affairs and president of the ConAgra Foods Foundation, said the decision to conduct a materiality assessment in 2014 wasn’t new.
"We’ve looked at what’s material to the company for some time, gathering various internal leaders to discuss and prioritize the most significant ESG material topics," Kircher said.
As ConAgra Foods has advanced CSR initiatives it has strengthened relationships with external stakeholders.
"It made sense this time to talk to various external stakeholders on their perspective of what’s material to our organization," said Kircher. "Maybe there are material issues we should be considering that we aren’t, or ones that are higher or lower in priority than we currently view them."
Conducting the materiality assessment and engaging external stakeholders gave the company a better understanding of where to focus CSR initiatives.
Of note is ConAgra Food’s willingness to not only engage friendly stakeholders, but critics as well.
"This has to be an objective process to be truly reflective of the environment that exists," Kircher said. "We need to know what we should be considering and managing to be successful."
ConAgra Foods was very conscious of engaging fans and critics across its value chain, from farm to fork.
"When it comes to the critics, sometimes we have to agree to disagree; but if we cut off our relationship with them, we cut off a perspective that can be helpful," said Kircher. "In many cases they are simply asking for greater transparency. When asked if we would consider reporting on new topics, we’ve said ‘yes’ more often than not."
Like Koharik, Kircher believes strongly that stakeholder engagement has a positive business impact.
"You surface new avenues for making money while doing the right thing," Kircher said. "We are exploring several opportunities that surfaced in our talks with stakeholders."
ConAgra Foods recently published its 2015 Citizenship Report (PDF), which clearly explains the company’s stakeholder engagement process and key findings. Kircher readily admitted there is always room to expand and improve.
"You may not be in a position to be as comprehensive as you’d like, but you have to start somewhere," he said. "You can always expand your assessment in the future."
Where to begin?
When determining ESG focus areas, it’s wise to start with internal stakeholders from various leadership and employee roles to gather what you know. Then, turn to external stakeholders to add perspective and gather evidence regarding the significance of each topic.
When selecting and prioritizing stakeholders, GRI advises organizations to focus on those who can identify your industry’s and organization’s most significant sustainability impacts, risks and opportunities.
Whether you engage 10 or 40 external stakeholders on ESG matters, through surveys, interviews, webinars or roadshows, this will help you verify ESG focus areas and uncover blind spots. Listening to, addressing and disclosing what matters most to your stakeholders is how you build trust and, ultimately, a sustainable business.