Fourth in the WHY SERIES of articles addressing the business case for sustainability in the building industry
“If you want to go fast, go alone. If you want to go far, go together.”
– African proverb
Customers are more likely to purchase from a company that they like and trust. A company’s true commitment to sustainability is a good way to create that connection with potential clients.
Furthermore, engaged external stakeholders – such as suppliers, customers, investors, regulators, and advocacy groups - can provide insight into trends, market developments, and strategic opportunities.
Let’s get some basic definitions out-of-the-way first.
What are external stakeholders?
Stakeholders are individuals or groups who affect or are affected by your company’s products or activities
It helps to map out your company’s stakeholder system. The list can quickly become overwhelming, so begin by prioritizing those on whom your company has the most impact, or vice versa.
Common external stakeholders for the building industry:
- Clients: corporations, institutions, and individuals
- Users: communities, facility managers, client employees, and individuals
- Suppliers: vendors and sub consultants/subcontractors
- Finance: Investors and Joint-venture partners
- Regulatory: government, utility, and policy development entities
Secondary stakeholder groups include: the media, NGO’S, advocates, industry associations, unions, community partners, and donor recipients.
What is engagement?
Stakeholder engagement is the process by which an organization involves people who may be affected by the decisions it makes or can influence the implementation of its decisions.
Be aware that a fundamental principle of stakeholder engagement is that concerned parties have the chance to influence the decision-making process. This differentiates stakeholder engagement from one-way communications that are primarily designed to inform or persuade people of a choice that is already made.
The benefits of stakeholder engagement to your company can be grouped into two areas.
1. Engaged customers are more likely to purchase from your company.
Many recent surveys indicate that consumers are increasingly willing to pay for products that they believe have environmental benefits or that are produced by a company adopting socially-conscious practices. Companies such as Patagonia, which make sustainability central to their brand, have a devoted customer base built on trust.
With the expected increase in green building, smart companies should demonstrate their focus on and understanding of sustainability by transparently communicating their relevant research, policies and best-practices.
2. Engaged stakeholders can provide insight into trends, market developments, and strategic opportunities.
There are several stakeholder groups in the real estate sector that can help shed light on your organization’s blind spots. They can also provide potential solutions to issues you are facing. Let’s take a closer look at the benefits these entities can provide.
a. Building Owners , Operators, and Occupants
Post-occupancy evaluations are a good way to get feedback and show the building operators and occupants that you care about their needs and experiences. In return, you gain a better understanding of which sustainable practices produce the greatest result and can focus your time accordingly. These evaluations should be a part of your project delivery process from the outset, so they happen as a matter of course.
b. Vendors and Suppliers
It’s important to foster a two-way dialogue on sustainability with those that provide services and products to your company. A better understanding of different perspectives and team cohesiveness will evolve if this engagement happens routinely and not just when it’s time to focus on a project.
c. Banking, Finance, Real Estate professionals
Green building provides opportunity to access new financial vehicles. Over the years an assortment of tax credits, bonds, and other funding sources have emerged to drive adoption of sustainability, increase investor diversification, and provide new sources of capital for projects that meet specific environmental criteria.
d. Utility, Regulatory, and Policy Stakeholders
Engaging with these entities not only gives you insight into existing rules and guidelines but can help you explore innovative strategies and best practices. For instance, when on a task force or committee, you can shape policy and have a head start on understanding implementation.
Stakeholder engagement is a way to address many business issues, such as risk mitigation, innovation and new market opportunities, service refinement, and ultimately project success.
The process of stakeholder engagement may seem overwhelming, however, because there are a myriad of approaches and types of stakeholders. In fact, this article may have left you with questions like : How do I find and prioritize stakeholders? How do I set up and manage these engagements? Stay tuned – I’ll have more on these issues in an upcoming series of “How” articles.
Kevin Wilhelm, Making Sustainability Stick: The Blueprint for Successful Implementation
Consortium for Building Energy Innovation, Stakeholder Platforms
Gibbs and Soell, Sense & Sustainability Study
SustainAbility, Practices and Principles for Successful Stakeholder Engagement
SustainAbility, The Stakeholder Engagement Manual
GRESB, 2014 Innovation Case Study