New toolkit to support businesses in increasing stakeholder powers to include ESG targets
Business in the Community (BITC), the Prince’s Responsible Business Network, has published a toolkit detailing how companies can increase the powers of their stakeholders to ensure that environmental, social and governance (ESG) targets are reported on, alongside financial performance. Research shows that brands that have a reputation for positive impact have value growth of 175% versus 70% for brands that have a low positive impact.
The toolkit, produced alongside Hogan Lovells, helps businesses navigate through the noisy ESG landscape and ensures that they hold themselves to account to all stakeholders, including shareholders, customers, employees, the communities they operate in and the environment.
The toolkit shares the reasons why businesses should embed ESG stakeholder accountability into their corporate structure, and outlines four key recommendations to consider when thinking about implementing stakeholder accountability, including:
Identify your stakeholders.
Listen and respond – the difference between engagement and accountability.
Measure and communicate the link between stakeholder capitalism and commercial success.
Become a leader in stakeholder governance before it becomes compulsory.
Alastair Loasby, responsible business and strategy campaign director at Business in the Community, said: ‘Research shows that consumers are demanding more from the companies that they purchase from with three in five consumers admitting that they will boycott brands next year who are not taking action on climate change. Ensuring that stakeholders have the authority to hold businesses to account on their ESG targets, alongside their financial targets isn’t just the right thing to do, it makes business sense. The toolkit that BITC is launching aims to support those companies who are taking their first steps on giving stakeholders additional powers to ensure that their ESG goals are being met.’
Scott Tindall, partner at Hogan Lovells, said: ‘Speaking to a range of corporates about the steps they have taken to embed stakeholder accountability into their business has been a heartening experience. It is clear that these issues are more topical than ever and that businesses are keen to progress the agenda around purpose and stakeholder governance. We heard that true stakeholder engagement cannot be a tick box exercise and has to be something meaningful that enables stakeholders to hold businesses to account.’