Stakeholder engagement secrets from Apple, Levi's and Wrigley
When it comes to engaging stakeholders, employees are at the top of many corporate sustainability managers’ agendas. Some 73 percent of companies are engaging employees across their organization educating them about corporate sustainability goals, according to a 2014 GreenBiz survey.
The business benefits of engaging employees on corporate sustainability initiatives are well-understood — If employees feel they are working towards a good cause, it can increase their productivity by up to 30 percent, according to a study by the Center for Economic Studies.
And in today’s competitive marketplace, higher employee productivity and lower absenteeism and turnover can translate into a significant competitive advantage.
But employee engagement is only a single facet of stakeholder engagement, which describes a broader, more inclusive and continuous process between a company and those potentially impacted by its operations. This, of course, includes customers, but also the C-Suite, investors and suppliers.
“Engagement is being consciously present to a conversation, listening, caring, dialoguing, and then taking that information and doing something with it,” Julie Urlaub, founder and managing partner at Taiga Company, told GreenBiz. “It’s basically what we do in our everyday human interactions, but it seems to somehow get missed in corporate communications.”
According to Urlaub, stakeholder engagement — whether it involves customers, executives, investors or others — is a two-way street involving both talking and listening, educating and collaborating.
Levi’s closes the loop with customer engagement
Whether they like it or not, companies are always engaging their customers — it occurs every time a customer interacts with a brand, and determines the depth and direction of the relationship. Building a solid base of loyal customers is obviously a top priority for companies, but corporate sustainability managers can take this a step further to engage customers to help amplify the impacts of their initiatives.
“One of the questions that’s always brought up is, how do you make sustainability part of someone’s day-to-day life,” Urlaub said. “Manufacturers can create great products, but if the consumer doesn’t recycle it or dispose of it responsibly, then what good is it?”
Take Levi Strauss, which has made water conservation a pillar of its sustainability program. Jeans are largely made up of cotton, and more than 2,000 liters of water typically are needed to produce a single pair of jeans. While the company developed its Water<Less jeans and promoted more sustainable cotton cultivation, a lifecycle assessment found that about 50 percent of the water used during the life of a pair of jeans comes from consumers washing them.
Clearly, it would be impractical — if not creepy — for Levi’s to check in with customers each time they planned on visiting the laundromat. That’s why the company embraced customer engagement to help close the water conservation loop.
Levi’s launched its Care Tag For Our Planet initiative, which educates consumers on sustainable ways to care for their jeans in an effort to reduce water waste. The program also educates consumers with water-saving cleaning tips.
While it is difficult to directly measure the effect of these engagement efforts, it’s safe to say they are at least making customers think twice before washing their jeans.
Engage the C-Suite with cold, hard facts
Engaging the C-Suite on sustainability can nearly be a full-time job for many corporate sustainability managers. Not every CEO “gets it,” and some may prioritize shorter-term profits to long-term sustainability investments. What’s more, many executives may view sustainability as something that is “nice to have” rather than a necessity.
“The C-Suite has to understand the business case for sustainability,” Urlaub said.
One sure route to achieving this is by helping them to view inaction as a risk to the bottom line. This involves understanding what other stakeholders — namely customers — are demanding. Millennials, for example, are universally more engaged in corporate social responsibility efforts and are are more likely to support purpose-driven brands, according to a 2015 study from Cone Communications.
“That is a rising pressure, but if what the stakeholder groups want and need can be captured in quantifiable measures, this can be presented to executives as a business risk rather than just a driver,” Urlaub said.
In this instance, engaging executives by framing sustainability as a business risk can create a sense of urgency that generates more opportunity to get ahead of the issue rather than react when it might be too late.
“If they can be proactive about it and pair it with the bottom line now, then there’s more opportunity to act,” Urlaub said. “But getting that data and making that connection can be hard.”
In a recent GreenBiz webinar, Kim Frankovich, global sustainability director at Wrigley, explained how the company engages its C-Suite by making sure sustainability is viewed as an integral part of the business model.
"From a chief sustainability officer’s perspective, it’s important to make sure that your sustainability strategies are embedded within your business strategies, so they aren’t created in a vacuum," Frankovich said.
"And make sure that the resources and the commitments that are needed are integrated into the operating plan, so that as things change over time you have that connectivity to your finance teams."
Investors waking up to the necessity of sustainability
Quantifying and communicating the business benefits of sustainability also can help companies engage their investors.
In recent years, the number of shareholder proposals devoted to environmental, social and governance (ESG) issues have increased, and the attention paid to these issues hasn’t been limited to activist shareholders and fringe groups — many mainstream institutional investors have expanded their incorporation of ESG criteria in investments.
Corporate sustainability professionals can work with their investor relations colleagues to understand which of their firm’s investors are engaged on sustainability issues. Proactively courting investors on sustainability is much more effective than waiting for a shareholder proposal. And with investors on your side, it will be much easier to engage the C-Suite.
Apple engages suppliers through firm expectations
For those firms with far-reaching supply chains, engaging suppliers has become a business imperative. As the world shrinks due to information communication technologies, consumer sustainability awareness is growing and they increasingly are holding companies accountable for unsustainable supply chain practices.
This creates a dual risk and opportunity for companies — they may be held responsible for unscrupulous behavior of their suppliers, but they also have the power to influence positive change.
“With engaging suppliers, it’s more about setting expectations and requirements and letting them know how the collaboration is impacting mutual goals," Urlaub said.
Apple is a classic example of a company that made a herculean effort to turn it all around after facing stark criticism over labor conditions at Chinese factories contracted to assemble iPhones and iPads. The company made large strides toward greener procurement practices.
In addition to issuing a list of 200 of its key suppliers, Apple also began systematically examining and evaluating its supply chain for environmental violations and adopting corrective and preventive measures. Marking its success, Apple last year was rated as having the "greenest" supply chain among the 167 brands evaluated by the Corporate Information Transparency Index, a system for assessing companies’ sustainable sourcing practices.