What is the case for an intensive stakeholder dialog?
Everyone operates within their social ecosystem with many different reference groups. This is equally true for companies and other organizations – except that their network is usually much larger. However, another difference is much more important: The reference groups, also known as stakeholders, have sometimes very different relationships with the players in the economy. Shareholders, investors, customers and employees are some of them. Representatives from politics, associations, initiatives, the authorities and the media – in other words, the general public – are also included.
Regular dialog with these various stakeholders should be a matter of course for every company. Why? Quite simply. The exchange of information and opinions in the course of a dialog provides them with valuable suggestions and insights – for example, to recognize market-relevant trends or to identify points for improvement. From a company’s point of view, this enables them to exploit opportunities and identify risks at an early stage. Above all, they learn about the needs and expectations of their individual stakeholders. The question here is not only: How satisfied are they with the products or services? Increasingly important: What wishes and expectations do they have with regard to the company itself – above all in terms of sustainability?
Groups and publicly traded companies in particular, but also well-known medium-sized companies, are feeling increasing pressure from their stakeholders to commit themselves to the environment and society – and to document this credibly in a well-founded sustainability report (ESG reporting). Even if the obligation to provide such ESG reporting has so far only applied to companies that meet certain size criteria: In the long term, policymakers will make all players in the economy more accountable for this. In many cases, pressure from other stakeholders is already growing. Banks, for example, make loans more expensive for corporate customers if they forego voluntary ESG reporting. Large corporations oblige their suppliers to guarantee fair working conditions and compliance with environmental standards – otherwise they terminate the cooperation. And customers and employees threaten to leave for competitors if their expectations in terms of sustainability are disappointed.
Sound ESG reporting therefore offers many advantages for companies. Increasing attractiveness to investors, better ESG ratings, and rising opportunities in the competition for increasingly scarce skilled labor are just some of them. In addition, companies can comply with regulations more reliably and reduce their reputational risks.
Optimize your ESG reporting with a materiality analysis
With a materiality analysis, KOHORTEN provides its clients with a crucial strategic tool for producing a sound ESG report. To this end, we offer the following compontents:
- Stakeholder analysis
- Document analysis to identify relevant external influences
- Rating impact analyses
- Gap analyses
- Stakeholder engagement processes
With these building blocks, you as a company manager can ensure that you take into account the requirements of rating agencies, for example, as well as any existing rules of the legislature. Above all, you will learn about the expectations of your most important stakeholders, as well as the practices of your industry and peers. In short, the materiality analysis puts your company in a position not only to meet the expectations of relevant stakeholders, but even to exceed them – far beyond the scope of the ESG Report. In this way, you secure the opportunity for competitive advantages in all important markets, strengthen your corporate image and reduce general corporate risks. In this way, KOHORTEN provides you with a real value proposition for your company.
With our experience, we support companies and other organizations in creating an efficient and convincing ESG report and help them lay the foundation for a stakeholder dialogue at eye level as the basis for long-term trusting relationships and social recognition. This necessarily involves ongoing groundwork. Which reference groups can be defined in each case? Which of them are relevant? And what are their – changing – expectations? Many companies lack the resources and know-how to systematically prepare and evaluate this “stakeholder map” – for example, according to what influence individual stakeholders have on the company’s development.