Navigating the New World of Stakeholders

Katharine F. Maroney

FMI Sustainability SummitJune 18th, 2008

Overview

• The New World of External Stakeholders–Their Role in and Influence on the

Marketplace–The Various Levels of Engagement

• A Closer Look: “Sustainable” Seafood

2

Business Response:

• Identify Opportunities from Social and Environmental Trends

• Integrate Social and Environmental Trends into Business Strategy & Other Decisions

• Gain “First Mover” Advantage – political goodwill and increased marketshare

Business Value at Stake

Sustainability in the Marketplace:The New Equation

Copyright Ecos Corporation 2006

Social & Environmental Issues as Market Forces

Global Trends Magnify Market Forces+ = Changed Operating

Conditions for Retailers• Global Population Explosion

• Wealthy Nation Consumption Patterns

• Declining Availability of Natural Resources

• Growth/Impact of Civil Society

• Globalization

• Role of Government

• Connectedness

3

Mapping Stakeholders for Retailers

VALUE CHAIN PLAYERS

NGOs

Parents

Industry groups

MediaAcademics

Regulators

Politicians

Banks

Financial analysts

Shareholders

Healthprofessionals

Scientists

Litigators

Producers

Suppliers

Wholesalers

Retailers

Consumers

REACTIVE INFLUENCERS

SHAPING INFLUENCERS

Dieticians

4

-20

-10

0

10

20

30

NGOs UnitedNations

Large LocalCompanies

NationalGovernments

GlobalCompanies

Who the Public Believes to Act in the Best Interest of Society

% of “yes”minus % of “no”

Activists are BecomingIncreasingly Credible

World Economic Forum 2005

5

Activists areHaving an Impact

6

Copyright Ecos Corporation 2006

Use of Public Pressure

Definition of Sustainability

Integrated UseStrict Protection

High

Low

Mapping NGOs

Use of Public Pressure

Definition of Sustainability

Use of Public Pressure

Definition of Sustainability

Greenpeace

PETA

World Wildlife Fund

The Nature Conservancy

Campaigners

Solution Groups

Threatening Punishment Promoting Solutions

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Levels of Connecting with Stakeholders

• Awareness – acknowledging and seeing non-traditional stakeholders as strategic to business and having influence in the marketplace.

• Engagement – limited outreach and dialogue with stakeholders for business purposes

• Partnership – strategic alliance with strong mutual value for both (all) parties

8

James Austin’s Collaboration Continuum

Source: 2001 BSR Guide to Engaging with NGOs, page 16.

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Why Engage with Stakeholders?

• Provides an “over-the-horizon” radar on issues

• Brings balanced perspective(s) to business decision-making

• Reality check on “sustainability” assumptions and may provide new opportunities

• Adds legitimacy or credibility to business approach

• Builds “ambassadors” within the community and political goodwill

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Engaging Stakeholders: What is the Business Objective?

• What does the business hope to achieve through engagement?

• What is the business already doing around external engagement?

• Is the business ready for a dialogue versus just providing information?

• What is the value to the business? What is the value to the NGO?

• Do not waste either parties time, the most successful engagements have strong mutual value propositions for both the business and the stakeholders.

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Corporate Lessons On Engaging Stakeholders

1. Engage early and often: be proactive as it is much easier to setthe terms for the discussion.

2. Be prepared to be as open and transparent as possible3. When mapping and ultimately engaging stakeholders, think:

• broadly• friends and enemies• commercial and not

3. Do not be arrogant and assume you know all the issues or be dismissive of others concerns. Listen and learn about the origins of positions and perspectives and how they are framing the issue.

4. Use engagement not only to understand others, but to identify real concerns that may lead to changes in strategy, new market opportunities, and possible partners.

5. Look to be leaders, set high standards, but bring the industry along and do not simply rely on associations to lead.

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Examples of Corporate/NGO Partnerships

• World Wildlife Fund and Coca-Cola have created a partnership to conserve and enhance fresh water resources around the world.

• Unilever partnered with Greenpeace to develop HFC-Free Freezers and market them to specific customers.

• Forest Stewardship Council & Marine Stewardship Councilcredibility due to fact that they are multi-stakeholder organizations.

• U.S. Climate Action Partnership (USCAP) is a group of companies and leading environmental groups that are working together to promote federal action to quickly reduce greenhouse gas emissions.

• Sustainable Packaging Coalition created by the GreenBlueInstitute and brings together a range of stakeholders to create a more robust environmental vision for packaging.

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“Sustainable” Seafood

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• Seafood stocks around the world are being significantly depleted, many to the point of no return

• Americans receiving conflicting advice from medical establishment to eat more fish (Omega-3s/ Mercury)

• Farm-raised seafood accounts for over 40% of all seafood consumed and has many environmental and potential health concerns

• Specific environmental/social issues being used to highlight seafood sourcing issues (eg. Canadian seal hunt)

• Growing public debate and discussion which will increase in near future will additional funding to NGOs

• Retailers being brought into public debate• No clear and easy solutions

“Sustainable” Seafood: Concise Overview

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• Greenpeace (GP)• Oceana (OA)• Humane Society of the U.S. (HSUS)• Pew Environmental Group (Pew)• Environmental Defense Fund (EDF)• World Wildlife Fund (WWF)• Monterrey Bay Aquarium (Seafood Watch Program)

(MBA)• Ocean Conservancy (OC)• Sustainable Fishing Advocates (FishWise with ED)

(SFA)• National Coalition for Marine Conservation (NCMC)

“Sustainable” Seafood: Key NGOs

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• National Fisheries Institute (supplier trade association)

• Seafood Choices Alliance (multi-stakeholder association)

• Global Aquaculture Alliance (aquaculture trade association)

• Pew Foundation (major funding source and implementing agency for NGOs)

• Marine Stewardship Council (labeling certification)• GLOBALGAP (European labeling standard)

Other Key Seafood Organizations (not exhaustive)

17

Copyright Ecos Corporation 2006

Use of Public Pressure

Definition of Sustainability

GP

OA

WWF

EDF

OCMBA

SFA

HSUS

Pew

Mapping of Identified Key Seafood NGOs

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• How does your company want to be positioned on this issue (eg. leader, responsible, not a laggard)?

• Review stakeholder information and positions (look at full breadth)

• Which stakeholders can help with your company’s objectives?

• What level of stakeholder engagement is required to meet your objectives?

How Stakeholders Can Help Retailers Navigate Seafood Issue

19

“If you are not at the table, you may find yourself on the

menu”

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Katharine F. Maroney

kats@ecoscorp.com

(610) 299 1949