Monday July 29th, 2019 ARCO LAB

Why it’s important to engage stakeholders in Sustainability Reporting?

bilancio della sostenibilità per essere affidabile deve avere il coinvolgimento degli stakeholder

In recent years, large companies have earned revenues similar to small States GDPs, but not all of them pay the same attention to the cost of their activities in social and, above all, environmental terms. The Sustainability Report, which defines a company’s impact on neighboring communities and environment, represents both a powerful channel of communication and a strategic planning tool. To achieve a reliable Sustainability Report, ARCO researchers believe it is important to involve stakeholders and they discuss in their latest publication Stakeholder Engagement and Sustainability Reporting (Routledge, 2018) the different strategies that can be adopted to do it.

In an increasingly interconnected and global world, in the face of growing concern over environmental and climate changes caused by human activities, investors and consumers are turning their attention to the role companies have in adopting sustainable measures. General attention is not directed only at the economic and financial performance anymore, but increasingly also on the environmental impact of companies’ production and distribution processes.

Parallel to this this shift of attention, the academic community started focusing on defining the scientific criteria and concepts necessary for the realization of Sustainability Reports. These documents demonstrate scientifically how companies consume shared natural resources and which strategies they adopt to reduce their own social and environmental impact. Among the different criteria that can be used for sustainability reporting, ARCO Researchers believe that stakeholder engagement is fundamental.

Stakeholder engagement is a process that allows companies to interact with their stakeholders on the main objectives and priorities of the company. By definition, therefore, it is a reiterative process that provides for an open relationship between the company and its stakeholders, and therefore allows the company to respond to their evolving expectations. This process is both a powerful mean of communication for the company and a channel of mutual teaching, or a way to promote positive change within and outside the company.

Stakeholder Engagement and Sustainability Reporting illustrates and discusses, both from a theoretical and a practical point of view, the different ways in which stakeholders can be involved. The comparative analysis of 211 Sustainability Reports published in 2016 by large companies operating in 8 sectors with a strong social and environmental impact contributes to the academic discussion with original insights on the properties of information concerning the policies and practices of stakeholder engagement in Sustainability Reports.

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