a business guide to sustainability · a process for stakeholder engagement 10.45-11.00 12.15-13.30...

Life Cycle Management

a Business Guide to Sustainability

Trainer’s Manual for Session IV:

LCM and Stakeholder Expectations

November 2006

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Table of Contents

Context & Introduction to Training ................................................................................... iii

Training Materials List .................................................................................................. iv Overview of the Training Program Session........................................................................ v

IV. LCM and Stakeholder Expectations ..................................................................... v LCM and Stakeholder Expectations Slides and Notes ...................................................... vi

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Context & Introduction to Training Training Session Booklet IV (Trainer): LCM and Stakeholder Expectations is companion to a set of training slides, and supporting booklets for both trainers and delegates and is intended to support Trainers in conducting a training session on Life Cycle Management (LCM). (A list of these materials can be seen on the next page.) Life Cycle Management is a unique framework of concepts, techniques and procedures with the goal of creating sustainable development. Rather than focusing specifically on environmental, social or economic impacts and/or benefits, LCM combines a variety of tools and approaches to look at all of these factors, how they are interconnected and how to best address these issues throughout the product or material’s life cycle. How these factors are weighted and balanced will depend on what is important to the organisation responsible for the management and what is deemed the most important issues throughout the product’s or material’s life cycle. This training kit presents the central messages of Life Cycle Management in a format accessible to a broad audience. The training kit will present LCM in four topics:

• Introduction to LCM • How LCM is Used in Practice • Communicating LCM Results • LCM & Stakeholder Expectations

LCM practices relevant to less developed countries will be emphasised within each of the four topics. In many instances trainers will find there is material which may not be relevant to their audience or is too detailed given time constraints and it is expected that they will leverage and add to the existing materials as need be.

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Training Materials List The Life Cycle Management a Business Guide to Sustainability Training materials are comprised of the following resources for Trainers and for Delegates: For the Trainer

Trainer’s Manual: Introduction, Case Studies & Resources

Trainer’s Manual for Session I: Introduction to Life Cycle Management

Slides for Session I: Introduction to Life Cycle Management

Trainer’s Manual for Session II: How LCM is used in Practice

Slides for Session II: How LCM is used in Practice

Trainer’s Manual for Session III: Communicating LCM Results

Slides for Session III: Communicating LCM Results

Trainer’s Manual for Session IV: LCM and Stakeholder Expectations This document

Slides for Session IV: LCM and Stakeholder Expectations

For the Delegate

Delegate’s Manual: Introduction, Case Studies & Resources

Delegate’s Manual for Session I: Introduction to Life Cycle Management

Delegate’s Manual for Session II: How LCM is used in Practice

Delegate’s Manual for Session III: Communicating LCM Results

Delegate’s Manual for Session IV: LCM and Stakeholder Expectations

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Overview of the Training Program Session

IV. LCM and Stakeholder Expectations Learning Objectives for Session Four To understand how to identify stakeholders, as well as, their priorities and concerns Outline for Session Four Day Two Session Four

10.30-10.35 Opening engaging Discussion

10.35-10.45 Stakeholder Expectations Today Value of Engaging your Stakeholders

10.45-11.00 A Process for Stakeholder Engagement

11.00-11.45 Case examples

11.45-12.30 Closing group Discussion

12.30-13.30 Break for lunch

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LCM and Stakeholder Expectations Slides and Notes

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Life Cycle Managementa Business Guide to Sustainability

Training Session 4 of 4November 2006

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Life Cycle Management Training - Outline • Introduction to LCM

– First session

• How LCM is used in Practice– Second session

• Communicating LCM Results– Third session

• LCM and Stakeholder Expectations– This Session!

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• Introduction to LCM– First session

What does LCM encompass?What are the unique aspects of LCM?

08.40-09.15

Break for coffee & refreshments10.00-10.30

Learning Objective: Understand the theoretical basis of life cycle management & its history

Group exercise09.15-10.00

Why LCM is needed in business and in government?

Drivers

08.30-08.40

What is a life-cycle? Impacts & value created along the life cycle of a product or service

DefinitionsHistoryUse

08.00-08.30

done

Here is a reminder of what we learned, discussed & accomplished in the previous session...

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• How LCM is used in Practice– Second Session!

A process for implementing LCMPlan – Do – Check – AdjustA focus on designFurther examples to illustrate

11.00-12.00

Break for lunch12.30-13.30

Learning Objective: Understand the practical aspects of LCM in policy development & business operations, through discussions of how to integrate it into decision making & through case examples


LCM involves…Learning from a range of examples

10.45-11.00

Life cycle managementDefinition & Benefits

10.30-10.45

done

Here is our agenda for this session, and a statement of learning objectives – The session will last no longer than 2.5 hours

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• Communicating LCM Results– Third Session

Case-studiesSector-specific driversCommunication strategiesCombination of tools

09.00-09.45

Break for coffee & refreshments10.00-10.30

Learning Objective: Provide a good understanding of communication tools and strategies. Why and how can they be valuable to business?


Communication toolboxMain features and link with LCMExamples and diffusion of tools

08.15-09.00

Why communicating LCM? To whom? Definition and scope, drivers, target groups of communication

08.00-08.15

done

Here is a preview of the agenda for the third, upcoming, session - - to give you an understanding of what we’ll cover next

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• LCM and Stakeholder Expectations– This Session!Case examples11.00-11.45

A Process for Stakeholder Engagement

10.45-11.00

Break for lunch12.15-13.30

Learning Objective: Understand how to identify stakeholders & the basics of a process for stakeholder engagement; Reflect on your relevant stakeholders

Closing group Discussion11.45-12.15

Stakeholder Expectations TodayValue of Engaging your Stakeholders

10.45-11.00

Opening engaging Discussion10.30-10.45

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Exercise: Who Has a Stake?

Purpose and Objectives: This is a simple, quick exercise. The purpose is to get participants talking and thinking about who has a stake in their organisations. This will provide them with some context for the “process” for stakeholder engagement that is presented later in this Session. This exercise includes some role playing.

Materials: Note pads for each individual to write their ideas.

Facilitating the Activity:• Ask participants to choose a partner (or assign partners)• Ask one partner to choose the role of journalist to conduct an interview. The other partner is “himself”, a

representative of his organisation.• Ask the journalist to interview his partner, and to ask the following 2 questions (allow 5 minutes):

1. “Businesses recognise that today’s complex issues cannot be solved alone. Solving today’s complex issues requires a coordinated effort with multiple stakeholders contributing to innovative, sustainable solutions”... Can you name five groups that have a stake in the environmental and social performance of your organisation?

2. Can you describe how your organisation has worked together with one of these groups (or describe how you think your organisation might be able to work together with one of these groups), in order to address an environmental/social aspect of your products/process/operations?

• Now have the partners change roles. Have the partner playing the journalist role ask the same two questions of his partner (allow 5 minutes)

• To close, tell participants to keep their stakeholders in mind, as we begin the Session...

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Companies are not alone in the world

LCM... Recall to mind two of the things we learned about life cycle management:

1. Active participation of all employees all departments and all functions in a company is an important precondition for LCM.

2. An organisation must look at activities beyond its facility boundaries, and be willing to expand its collaboration and communication to all stakeholders in the value chain, in order to: successfully foster more sustainable goods and services; to manage the total life cycle of its product portfolio; to successfully move towards more sustainable production and consumption.

Therefore, we know stakeholders are key to the success of LCM in an organisation. Specifically, a process to identify priority stakeholders and garner their input, are key to the success of LCM in an organisation.

Who has a Stake? Companies are not alone in the world. Many groups have a stake, or interest in a company, its products, its operations, its financial success. This figure (adapted from Wuppertal Institute, 2004) presents employees, suppliers, financial institutions, public authorities and customers in the product chain as primary, obvious stakeholders. The figure presents a number of other groups as secondary stakeholders along the product life cycle. Each stakeholder has different expectations of, and different skills to offer to, an organisation.

• Activities of an organisation have impacts of different kinds along its product chain, and affect almost anyone. Hence, organisations can be held accountable for these impacts by different stakeholders.

• Activities of an organisation can be enhanced at many points along its product chain. Hence, organisations can benefit from insights of different stakeholders and their perspectives on improvement opportunities.

Therefore, identifying and engaging stakeholders is necessary to anticipate the stakeholders’ opinion on the business, the products and services and to learn what really matters to them.

Source: A UNEP Guide to Life Cycle Management, UNITED NATIONS PUBLICATION, DTI/0889/PA, ISBN: 978-92-807-2772-2

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Trends & changing expectations

• Complexity of Stakeholder Expectations Increasing:

– Economic Environment Social Sustainability– Facilities Products Suppliers & End of Life– Trust Me Tell Me Show Me Involve me

• Definition of Stakeholders is Broadening

– External Internal

Stakeholders have become more global in their reach and have a better understanding of business than ever before. Stakeholders expect transparency. They expect to be involved in setting social and environmental performance objectives – not only being informed of the organisation’s activities and performance.

External stakeholders, removed from the organisation’s business (such as activists like Greenpeace) are still active. But more interestingly is the increasing expectations of stakeholders closer to the organisation’s business, such as their employees, their shareholders, their banking institutions.

Source: Five Winds International, 2003, “Descriptions of Tools & Concepts for Environmental Sustainability”. www.fivewinds.com/uploadedfiles_shared/StakeholderEngagement040127.pdf

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Consider 2 types of stakeholders

Organisations that work with the companies who operate in their region at the local & communitylevel

Organisations that work with a number of different companies at a strategic or corporate level

2. Community1. Corporate

The two types are not mutually exclusive

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What do corporate-level stakeholders expect?

Strategic, corporate level stakeholders:

– Can have high expectations of the companies with whom they partner

– Most focused on a clear agenda of specific issues– Approached by many companies, so will be selective of

whom they work with– A majority of engagements at this level rely very much on

personal relationships– Many expectations revolve around building & maintaining

trust

Source: Five Winds International, 2003. “Effectively Engaging Stakeholders: A survey of current practice” presentation to Conference Board of Canada, 20 May 2003, Kevin Brady, Director, Five Winds International.

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What do community-level stakeholders expect?

Local, community level stakeholders:

– Expectations are unique to each community– Often, companies incorrectly assume that:

• Stakeholders who want to be consulted or engaged will be the same in each community / region

• Stakeholder expectations or issues will be the same from facility to facility, region to region

– Companies need to take the time to effectively listen to their concerns, to ensure they understand the real rootsof the concerns

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Stakeholder expectations in 3 areas

Expectations

Targets on environmental performance of products monitored, measured, reported (e.g. product declarations)

Targets on sustainability monitored, measured, reported publicly

Identifies & prioritises risks

Programs to address same (design for environment, product and packaging take-back

Code of ethics or policy on expected behavior of employees & business partners

Two-way communication, engaging community in decision-making

Policy to address environmental impact of products

Environmental, social stated in company's mission

Contribution to social, cultural & economic wellbeing of local community

Product performanceCorporate performanceCommunity / Operations

The community level... Companies have often been working with groups in their local communities for many years... What is new is an approach that involves community groups in discussions, and in generating solutions, instead of only informing them of decisions after they are made (two-way communication, engagement)

The corporate level... Companies, depending on their size and scope, may work with international NGO’s, investors and thought leaders. Expectations of these stakeholders tend to be focused on the company’s strategy and commitments to upholding or surpassing best practices in their sector.

The product level... Companies have always responded to customer’s needs when creating products... What is new are customer expectations for credible information on environmental & social performance of products

Supporting Case Study, “Johnson & Johnson: Environmental and Sustainability Reports” - see “Case Studies and Resources” section of manual – It illustrates J&J is increasingly including life cycle product information in communication documents meant for private and public stakeholders, environmental and sustainability reports

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Value of working with stakeholders

1. Opportunity creation

2. Risk avoidance

Perception of a company’s overall reputation is not only based on the activities which it participates in or the organisations which it supports, but is often a reflection of how well the company interacts with its stakeholders. Engaging stakeholders can help to build relationships with upstream and downstream members of the value chain as well as with organisations in the communities in which they operate. These relationships can be an integral part of creating new opportunities for development and avoiding risks.

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Business value of working with stakeholders

Expedite permitting & approvals

Stimulate innovation & generate ideas

“Keep the radar screen tuned” - Stay in front of & influence regulations & expectations

Maintain or improve reputation & image

87654321Business value: Company

Business Value of Stakeholder Engagement – A survey of 8 companies


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Business value of working with stakeholders

Possible benefits and outcomes of stakeholder collaboration and communication (adapted from WuppertalInstitute, 2004)

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Importance of Including Stakeholders

1. Opportunity Creation

• Less Developed Countries• Presenting to the greater community• Establishing mechanism for ongoing community

input• Building the organisation’s brand• Reassessing opportunities for value creation

Adapted From: Simanis, E., Hart, S., Enk,G., Duke,D., Gordon,M. & Allyson Lippert “Strategic Initiatives at the Base of the Pyramid - A Protocol for Mutual Value Creation”. 2005.

In Less Developed Countries, where companies may need to gain broad support and trust for the venture. There are four primary tasks involved in this process: presenting the business plan to the community, establishing mechanisms for ongoing community input, building the MNC brand, and reassessing opportunities for value creation.

Presenting to the Greater CommunityThe organisation should discuss the business plan with community members, other stakeholders, and possibly even competitors. The fundamental objective of this task is to listen attentively for overlooked concerns and possible alternatives, adopting a stance of humility and respect for different perspectives. Changes should be made to the business model as appropriate, and additional partners added as necessary. The idea is not to get unanimous agreement – since that may not be possible, even though it is desirable – but to engage in an open, respectful and transparent dialogue with the community that results in broad support of the path forward.

Establishing Mechanism for Ongoing Community InputIn the spirit of transparency and in recognition of the venture’s responsibility to the local community, the organisation shouldinstitute a mechanism that allows for the broader community to periodically report-back on the venture’s performance and to raise possible concerns. One option might be to include community members in the collecting, analysing and reporting of scorecard metrics. The data and the reports would be made public and accessible to the community through the local enterprise office. Additionally, the organisation could institute regular “town-hall” sessions that provide a forum for raising concerns.

Building the BrandEngagements with the community present an opportunity for the organisation to raise awareness of their brand. Establishing a brand as reliable, trustworthy, and of high quality increases access to valuable resources and capabilities within the community, enhances legitimacy, and may generate additional business opportunities. To effectively manage this process and to leverage the organisation’s interactions with the greater community, a clear brand strategy should be established. This strategy should make explicit the relationship of the local venture to the organisation’s corporate brand.

Reassessing Opportunities for Value CreationThe organisation should also utilise the feedback from the community in assessing their own strategic plan. In addition to ensuring alignment between the community and their objectives, the feedback may bring to light parallel opportunities to leverage the organisation’s current suite of products and services. Additionally, the organisation may identify new competencies or capabilities that it can develop and deploy locally or in its existing markets.

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1. Opportunity Creation

• Less Developed Countries• Existing Markets

• Innovation• Good Reputation• Social Licence to

Operate

Adapted from: Collaborative Learning and Innovation Centre for Sustainable Community Development, Simon Fraser University http://www.sfu.ca/cscd/cli/resources_business_case.htm

Stakeholder relationships can have a significant impact on the bottom line in the following ways:•innovation depends on trust and collaboration between employeesand access to new information and ideas through stakeholder networks •a good reputation helps to attract talent, maintain customer loyalty and fostercommunity support; •maintaining a social license to operate depends on satisfying growing demands fromstakeholders for accountability.

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2. Risk avoidance

– Project delays – Cancellations – Public relations disasters,

e.g. Public boycotts– Damaged reputations

Adapted from: Natural Resources Canada http://www.nrcan-rncan.gc.ca/sd-dd/pubs/csr-rse/p6_e.html

Managing risk in an increasingly complex market with greater stakeholder scrutiny of corporate activities is becoming essential to business success. Many issues risks can be avoided or minimised if issues of concern to stakeholders are addressed before a major problem arises, or if a relationship exists with stakeholders so the problem can be addressed in the early stages.

Failing to invest the time and resources in understanding stakeholder expectations and address their concerns upfront can increase risks to business such as:•Project delays •Cancellations •Public relations disasters, e.g. Public boycotts•Damaged reputations

•Teck Cominco’s reputation for building successful partnerships with the communities near its mines has helped it avoid the fate of others who have had to spend large amounts of resources and time dealing with communities and other groups that challenge their right to operate, even to the point where these projects become no longer financially viable.

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Process for Stakeholder Engagement

1. Commitment & Principles– Designate responsibility– Develop principles to guide engagement

2. Identifying & Prioritising Stakeholders– Identify key stakeholders– Identify the issues

3. Methods & Types of Engagement (“Toolbox”)– Determine appropriate method of engagement

4. Implementation & Exit

Supporting Case Study, “Utz Kapeh” - see “Case Studies and Resources” section of manual – It describes how Utz Kapeh worked with more than 100 producers and producer groups throughout Latin America, Asia and Africa, 57 roaster companies, 146 registered buyers to foster responsibly grown mainstream coffee


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Process for Stakeholder Engagement:1. Commitment & Principles

• Designate responsibility to a group or individual:

– need internal champion(s) to ensure that appropriate stakeholder engagement takes place

– champions should have experience in stakeholder engagement & strong interpersonal skills for relationship building

– champions should be interested, willing & see the value– champions need to report to a senior executive to ensure

high level commitment & involvement


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Process for Stakeholder Engagement: 1. Commitment & Principles

• Develop principles to guide engagement, in order to:

– demonstrate commitment to stakeholders– establish rules of the game for fair, respectful dialogue– ensure consistent approach across all operations

Supporting example, “Global Sullivan Principles” - see “Case Studies and Resources” section of manual –Signatories commit to “work with governments and communities in which [they] do business to improve the quality of life in those communities-- their educational, cultural, economic and social well being--and seek to provide training and opportunities for workers from disadvantaged backgrounds” and to “promote the application of these Principles by those with whom we do business”


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Process for Stakeholder Engagement: 2. Identifying & Prioritising Stakeholders

Potential Stakeholder Groups to include:

• International, national and regional regulatory bodies

• Shareholders• Investment community• Local and global environmental and social

non-governmental organisations• Local communities• Members of supply chain• Customers• Employees and contractual workers• Media• Labour Associations• Commercial Trade Associations

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• Ask the right people:

– Contact/ interview key representatives from your organisation about who they feel are key stakeholders

– Collaborate with leaders from various business functions

Contact/ interview key representatives from your organisation about who they feel are key stakeholders. •As part of these interviews, ask what they think are key expectations of various stakeholder groups with respect to environmental and social performance.

Collaborate with leaders from various business functions• (e.g., regulatory and public affairs, marketing and sales, EH&S, etc.) to brainstorm key stakeholder groups of the activities and service offerings associated with your organisation

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• Rank stakeholder groups based on their relevance to your organisation’s LCM strategy

• Prioritise the stakeholder groups based on their relevance to the business

• Select the stakeholder groups in terms of their expectations

Rank using the numbers 1-3 (1 being most relevant, 3 being least relevant). Number of stakeholder groups typically ranges from 3-10.

Potential Ranking FactorsAre they active in issues of direct relevance to the organisation’s business?Are they active in the organisation’s region of operations?Have they already established a relationship with the organisation?Are they influential in terms of policy or public visibility?

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Process for Stakeholder Engagement: 3. Methods & Types of Engagement

• What determines the method of engagement? – business value, issues being discussed, location, stage of

process, level of resources required etc.

• Method entail different levels of involvement

– Information Sharing– Consultation – Collaboration

Increasing level of involvement

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Process for Stakeholder Engagement: 4. Implementation & Exit

Implement

• develop action items to address issues raised

• measure success– Maintain enthusiasm &

credibility– Justify time & expense

ExitSet a time line:

• If reason for engagement is addressed, exiting relationship is natural

• With local community stakeholders, engagement often lasts for the duration of an operation or project, even after closure or decommissioning

For example of “action plan” and “measuring successes”, see subsequent slides on CEMEX - - Action: made quality housing attainable by supporting collective responsibility and by providing designs that are simple, adaptable, and expandable. Measuring: CEMEX reports the last five years have seen the amount of cement consumed by the informal sector grow by 300%, while the average construction time has decreased by 66% and construction costs have been cut by 33%.

Source: Patrimonio Hoy Presentation – Research directed by C.K. Prahalad available at www.nextbillion.net/files/Case%20Studies%20Cemex.pdf

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Process for Stakeholder Engagement: 4. Implementation & Exit

Case Study: CEMEX

Housing is a fundamental need, but acess to bring the resources needed - labour, design and materials - can be difficult for many! CEMEX became aware of the importance of the informal housing sector, made up of mostly individual home builders, for their company during the peso crisis in the mid 1990s. This lead them to initiate the “Patrimonio Hoy” Program (Savings/Property Today) which looked for opportunities to expand their market in this area by designing a new approach to delivering construction material, support and financing.

To learn as much as they could about the needs of these communities they researched, listened and immersed themselves to and with their customer base. This gave them insights they could never have acquired otherwise including the structural aspects that where obstructing people from constructing affordable housing.

CEMEX was able to match the needs of their customers with their products and make quality housing an attainable target by supporting financing of construction projects through collective responsibility (similar to the Grameen Bank’s model); providing designs that are simple to build, adaptable, and expandable; as well as, being able to supply all the materials needed.

As a result of this they have one million customers, and in the last five years have seen the amount of cement consumed by the informal sector grow by 300%, while the average construction time has decreased by 66% and construction costs have been cut by 33%. (Cemex: Patrimonio Hoy Presentation – Research directed by C.K. Prahalad available at http://www.nextbillion.net/files/Case%20Studies%20Cemex.pdf) Summary:•Geographical Scope: This program is specific to Mexico although other developing countries, such as the Philippines, are considering replicating the Patrimonio Hoy model and there are associated programs, such as facilitating remittances from the United States, all focused on serving this population in a profitable way.• Challenges:

•There was a real lack of understanding of this market•Required a whole new business model to access the opportunities that existed there•Only real way to understand the market and how to access them was to live with and learn from the communities themselves.

• Stakeholders Involved:•Worked with and lived in the communities they were targeting to understand how to deliver improved services in a profitable way. •Also created Socios or small groups to ensure payments through collective responsibility

•Benefit for the company:•After 3 years of operations the program has 36,000 customers and is growing by 1,500-1,600 per month•Program has a positive cash flow from operations of 2 million pesos per month •Largest benefit has been to create a new channel for selling cement and other construction materials. This has helped CEMEX triple its cement sales in places where the program is being run.

• Link to LCM: Fulfils stakeholder engagement and economic aspects of LCM • Lessons Learnt: There are creative ways to profitably access markets that previously may have been viewed as viable due to poverty or other complications.

Source of Image: www.patrimoniohoy.com (Top right from http://www.nextbillion.net/files/Case%20Studies%20Cemex.pdf

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Stakeholder engagement case studies

Consider the following case studies – Refer to the page in your manual which outlines “Process for Stakeholder Engagement”. As we walk through the following case studies, look for elements of the process in their approaches.

Source: This case study and all its contents are adapted from Engagement –The Foundation of Community Building. (http://www.angloamerican.co.uk/static/reports/2006/rts/sc-engagement.htm)

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Case Study – Anglo American

• Have Operations in over 60 countries

• Many in developing or emerging markets

• Often in remote or rural communities

• There is a public expectation that they facilitate poverty alleviation, health and unemployment, both in their operations and in the greater community.

Anglo American is a global leader in the mining and natural resource sectors. The company has significant and focused interests in gold, platinum, diamonds, coal, base metals, ferrous metals and industries, industrial minerals and paper and packaging, as well as financial and technological strength.


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• Use their Socio-Economic Assessment Toolbox (SEAT)

• Develop Community Engagement Plans

• Facilitate engagement through – Social Forums– Partnerships

• Continually look for Feedback

The Socio-Economic Assessment Toolbox (SEAT) “includes assessment tools that assist with the identification of stakeholder groups, culturally appropriate methods for engagement and understanding the dynamics between stakeholder groups. It provides guidance on forming and managing partnerships, the social aspects of closure planning, local-enterprise development and assessing human capacities. To complete the process, the site management must develop a plan that responds to community concerns and priorities.”(http://www.angloamerican.co.uk/static/reports/2006/rts/sc-engagement.htm)

Anglo American states it has either gone through this process or developed community engagement plans for 91% of their major operations

Social Forums are meetings for managers held all over the world and provide the opportunity for them to discuss, debate and interact on issues of greatest importance to the communities they are working in, such as informal settlements, sustainable livelihoods, or HIV/AIDS, with the leaders, advocates and NGOs supporting them.

Anglo American belongs to a number of partner groups including: the UN Global Compact, World Business Council for Sustainable Development, Global Business Coalition on HIV/AIDS, and ICMM.

Both through the use of SEAT and community engagement plans they are able to garner feedback on their performance from the communities they are operating in. They point to this as critical in aligning their improvement efforts with the priorities of the communities they are operating in.


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Stakeholders include:

• Investors• Employees and their representatives• Governments• International organisations• Communities (operational

responsibility)• Contractors and suppliers• Customers• NGOs

This is a list of Key Stakeholders and how they engaged with them in 2005

Investors - Annual results presentations and investor road shows, meetings on sustainable development performance, stakeholder surveys

Employees and their representatives - Performance contracts and development reviews, CEO briefings, climate surveys, European Information Council, trade union negotiations, information portal, internal publications

Governments - Direct engagement as well as through industry associations, national partnerships on social priorities, international partnerships, stakeholder surveys

International organisations - Membership of UN Global Compact, ICMM, WBCSD, Global Business Coalition on HIV/AIDS, participation in consultations on business and human rights and World Bank IFC draft performance standards

Communities (operational responsibility) - Community engagement plans and liaison forums, SEAT, roundtables, consultation with leaders, town hall meetings, surveys, EIAs/SIAs

Contractors and suppliers - Commercial interactions, tender processes, open days, safety inductions, performance reviews

Customers - Commercial relationships, satisfaction surveys, complaints procedures

NGOs - Engagement on specific issues, stakeholder surveys, involvement in partnerships (e.g. on biodiversity, human rights or HIV), international memberships


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• Mondi Packaging Paper Mill – Located in Swiecie, Poland

• Conducted a socio-economic assessment

• Developed a strategy to address local concerns

The socio-economic assessment highlighted both the benefits and priorities for the community. With unemployment at 25% this was a major focus, but there were also concerns around economic development, increased transparency in how social investment projects are selected, and the local environment.

Following this assessment the Mill’s management developed a strategy to address these areas of concern.

Strategies to support items such as economic development can be supported through such initiatives as sub dividing large contracts so that smaller scale local suppliers can compete for and benefit from them. In areas such as HIV/AIDS there are opportunities for educational efforts, testing, and support. Mining firms have found that good public relations in their operations has lead to strategic benefits when bidding to develop new mining sights in both existing and new countries. By investing in the health of their employees and their families they have also found benefits around employee retention and engagement.


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Case Study – WWF Conservation Partners

Basic Principles of Engagement

• Mutual Respect

• Transparency

• Right to criticise

The World Wildlife Fund one of the world’s largest conservation organisations engages directly with leading companies in the conservation area. These companies have made a commitment to the environment and have engaged with the WWF to benefit from their insight and perspective on environmental issues.

The WWF’s ‘guiding principles for engagement’ include “mutual respect, transparency and WWF’s right to criticise.” (http://www.panda.org/about_wwf/how_we_work/businesses/index.cfm)

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The Partnership aim to facilitate:

• Conservation

• Communications

• Joint Learning Initiatives

• Conservation Partnerships

• Investment

To become a Conservation Partner a company will work with WWF to develop a balance between:

•Conservation – setting clear goals for the business and its industry•Communications – if successful for both internal and external parties•Joint Learning Initiatives – (See Nokia case on next slide)•Conservation Partnerships – aiding employee engagement on conservation efforts and learning on both sides•Investment – either in WWF’s global fund or into specific projects

(http://www.panda.org/about_wwf/how_we_work/businesses/conservation_partner/index.cfm)

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The focus of the WWF Nokia partnership is to facilitate discussions with stakeholders and develop new learning programs for Nokia’s 50 000 employees. To date they have developed Connect to Protect a e learning site on their intranet. They have also engaged with a number of stakeholders both on general environmental issues and on those specifically related to Nokia’s operations.

The ultimate goal of the partnership is that Nokia will improve its environmental performance and make a contribution to conservation.

According to Nokia’s VP of Corporate Relations and Responsibility “ The cooperation between WWF and Nokia provides us with a unique opportunity to improve our environmental performance by engaging with staff throughout the organisation –from generating understanding, awareness and action on general environmental issues to a more targeted and specific business case focus. Through this cooperation we are enabling employees to manage environmental issues as an integral part of their jobs.”(all content for this slide from http://www.panda.org/about_wwf/how_we_work/businesses/conservation_partner/cp_nokia/index.cfm)

Summary:•Geographical Scope:

•Within the sphere of influence of Nokia’s 50,000 employees scattered around the world• Challenges:

•Raising awareness within the company’s employees•Looking beyond the typical realm of influence of the company

• Stakeholders Involved:•Works with WWF to identify priorities and communicate those to staff

•Benefit for the company:•Greater integration of employee’s values and their work potentially leading to greater engagement

• Link to LCM:•Fulfils stakeholder engagement and potentially economic aspects of LCM

• Lessons Learnt•Opportunities to improve productivity and environmental performance may be generated by working with environmental organisations rather than seeing them as confrontational and to be avoided.

WWF also has partnerships with Cannon, Lafarge, HSBC, and Ogilvy.

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Discussion: Who Can I Engage?

“Businesses recognise that today’s complex issues cannot be solved alone. Solving today’s complex issues requires a coordinated effort with multiple stakeholders contributing to innovative, sustainable solutions”

Recall again two of things we learned about life cycle management:1. Active participation of all employees all departments and all functions in a company is an important precondition for LCM.2. An organisation must look at activities beyond its facility boundaries, and be willing to expand its collaboration and

communication to all stakeholders in the value chain, in order to: successfully foster more sustainable goods and services; to manage the total life cycle of its product portfolio; to successfully move towards more sustainable production and consumption.

Therefore, we know stakeholders are key to the success of LCM in an organisation. Specifically, a process to identify priority stakeholders and garner their input, are key to the success of LCM in an organisation.

Think back to the questions you discussed with your partner at the start of this session:1. “Businesses recognise that today’s complex issues cannot be solved alone. Solving today’s complex issues

requires a coordinated effort with multiple stakeholders contributing to innovative, sustainable solutions”... Can you name five groups that have a stake in the environmental and social performance of your organisation?

• NOW can you name two additional stakeholders, which you had not thought of previously?

2. Can you describe how your organisation has worked together with one of these groups (or describe how you think your organisation might be able to work together with one of these groups), in order to address an environmental/social aspect of your products/process/operations?

• NOW can you think of a new possibility for working with one of these groups, or stakeholders, which you had not thought of previously?

Use these questions to generate a discussion amongst the group. Encourage people to share ideas, and explain how their views are different now from what they were at the start of this session. This should provide each delegate with ideas to take back to their organisation, or department, at the end of the session.

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Additional questions for thought

1. Who in your organisation should participate in identifying the most important stakeholders to engage with?

2. Name one issue important to your organisation that stakeholder engagement could help address?

3. Think about one particular stakeholder you could work with. What perspectives and skills could they bring to the table? What would the benefits be for your organisation and for the stakeholder respectively?

4. Are there particular opportunities for your organisation to improve stakeholder engagement in less developed countries? In established markets?

OPTION: If desired, use/adapt these questions to generate further discussion...

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Life Cycle Management Training - Outline • Introduction to LCM

– First session

• How LCM is used in Practice– Second session

• Communicating LCM Results– Third session

• LCM and Stakeholder Expectations– This Session!

Acknowledgements Very many people donated their time and expertise to review these training materials, and provide examples that illustrate Life Cycle Management practices. Special thanks to the following key contributors: Gil Anderi da Silva, Universidade de São Paulo

Sarah Basden, Rio Tinto

Francesc Castells, Universitat Rovira i Virgili

Viviana Carrillo, FEBE EcoLogic

Olivia la O’Castillo, APRSCP

Kishore Chenna

Arturo González, ARGOS Consultants

Norihiro Itsubo, National Institute of Advanced Industrial Science and Technology

Lienne Carla Pires, 3M do Brasil Ltda

Dariush Rafinejad, Stanford University

Elena Rosa Dominguez, Universidad Central de las Villas

Andrea Russell, Rio Tinto Minerals

Reginald B.H. Tan, National University of Singapore

Mohammed Tawfic, SCU Faculty of Agriculture

Alexander Voronov, JSC Legal service

The primary authors – Jennifer Cooper, Josh Hendry, Chris Peterson and James Fava of Five Winds International, Greg Schiefer of SETAC North America, Sonia Valdivia & Guido Sonnemann of UNEP, Allan Astrup Jensen of FORCE Technology, Paolo Frankl of Ecobilancio, – are grateful to all who contributed. These training materials also incorporate ideas and examples from Life Cycle Management: a Business Guide to Sustainability prepared by Allan Astrup Jensen of FORCE Technology, Jeppe Frydendal of Danish Standards and Arne Remmen of Aalborg University (2006, DTI/0889/PA, ISBN: 978-92-807-2772-2).

About us

The UNEP SETAC Life Cycle Initiative

UNEP DTIE, SETAC & the Life Cycle Initiative

UNEP and SETAC have established a global life cycle assessment initiative. Among other things, the Life Cycle Initiative builds upon and provides support to the ongoing work of UNEP on sustainable consumption and production, such as Industry Outreach, Industrial Pollution Management, Sustainable Consumption, Cleaner and Safer Production, Global Reporting Initiative (GRI), Global Compact, UN Consumer Guidelines, Tourism, Advertising, Eco-design and Product Service Systems. The Initiative’s efforts are complemented by SETAC’s international infrastructure and its publishing efforts in support of the LCA community. The Life Cycle Initiative is a response to the call from governments for a life cycle

economy in the Malmö Declaration (2000). It contributes to the 10-year framework of programmes to promote sustainable consumption and production patterns, as requested at the World Summit on Sustainable Development (WSSD) in Johannesburg (2002). Our mission is to develop and disseminate practical tools for evaluating the opportunities, risks, and trade-offs associated with products and services over their entire life cycle to achieve sustainable development. The programmes aim at putting life cycle thinking into practice and at improving the supporting tools through better data and indicators by hosting and facilitating expert groups whose work results in webbased information systems.

1. The Life Cycle Management (LCM) programme creates awareness and improves skills of decision-makers by producing information materials, establishing forums for sharing best practice, and carrying out training programmes in all parts of the world. 2. The Life Cycle Impact Assessment (LCIA) programme increases the quality and global reach of life cycle indicators by promoting the exchange of views among experts whose work results in a set of widely accepted recommendations. 3. The Life Cycle Inventory (LCI) programme improves global access to transparent, highquality life cycle data. Learn more at: http://www.uneptie.org/pc/sustain/lcinitiative.

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UNEP SETAC Life Cycle Initiative

a business guide to sustainability · a process for stakeholder engagement 10.45-11.00 12.15-13.30...

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