Community Engagement

Communities generally appreciate most of the tangible benefits that companies provide including jobs, support for local businesses and nonprofit organizations and assistance with maintaining the infrastructure upon which all community members depend.  However, there is at least one other important thing that companies can do to improve the quality of life in their communities and make better use of their own resources.  The answer is proactively working to give community members a “voice” by allowing them to have input into decisions made by governments, companies and other organizations that will impact their day-to-day lives and the level of well-being in the communities in which they live and work.  Community engagement is the cornerstone of everything a company does vis-à-vis the community in which operates.

Community engagement appears in many of the voluntary standards relating to sustainability and reporting on sustainability-related matters.  For example, the OECD Guidelines for Multinational Enterprises call on enterprises to seek and consider the views of community members before making decisions regarding changes in operations that would have major effects on the livelihood of employees and their family members living in the community and the community as a whole (e.g., proposed closures of facilities) and take steps to mitigate adverse effects of such decisions on the community. The Global Reporting Initiative (“GRI”) created Sustainability Reporting Standards that have become the most widely used standards on sustainability reporting and disclosure around the world and which call for reporting organizations to discuss their management approach to local communities by describing the means by which stakeholders are identified and engaged with; which vulnerable groups have been identified; any collective or individual rights that have been identified that are of particular concern for the community in question; how it engages with stakeholder groups that are particular to the community (for example, groups defined by age, indigenous background, ethnicity or migration status); and the means by which its departments and other bodies address risks and impacts, or support independent third parties to engage with stakeholders and address risks and impacts.[1]

In its CSR Processes and Practice Manual, Africa Oil Kenya (“AOK”) noted that a company’s approach to working with local communities is a critical component to its social license to operate and cultivating a trusted relationship, with strong communication, between the company and its community stakeholders takes time and patience.[2]  Among other things, community engagement should be used to proactively understand the various perspectives of the communities in order to manage the expectations of stakeholders, identify potential conflicts or risks and appropriate responses and ensure communities feel like they have been engaged.  Effective stakeholder engagement requires a deliberative and ongoing process based on the following principles and elements[3]:

• Predictability: Stakeholders should have a clear understanding of the process of engagement
• Transparency: Information should be communicated early in the decision-making process in ways that are meaningful and accessible
• Accessibility and Appropriateness: Consultation with stakeholders should be conducted in a manner that is inclusive and adapted for local norms in order to ensure that stakeholders can communicate effectively and with minimal barriers (e.g., financial, cultural, literacy restraints etc.)
• Responsiveness: Engagement should help the company understand and respond effectively to issues as they emerge
• Documentation: Engagements to be documented for future reference in order to ensure that the company can respond appropriately and to support transparency of engagement
• Grievance Mechanisms: Grievance mechanisms should be incorporated into the engagement process in order to allow for open communication of issues from stakeholders and enable company to proactively manage critical issues

One striking feature of the construct of community involvement and development is the emphasis on proactive engagement by businesses and other organizations with the individuals and groups within the communities that the organization operates, either as a resident of the community (e.g., the area in which the organization maintains its principal offices), as a vendor of products that are commonly used within a community or as a consumer of natural resources that are available in the community.  Businesses should not simply make their own judgments and decisions about what is best for the communities in which they operate but instead should take the time, and invest the resources, necessary to establish a framework for continuous engagement with the communities in order to better assess the needs and expectations of the community and select and launch projects and initiatives that will have the greatest positive impact on community and generate reputational advantages for the organization.

Identification and engagement of stakeholders in the community regarding the impact of the organization’s activities is certainly a fundamental part of community involvement and development; however, ISO 26000 stresses that organizations must act with sincerity and demonstrate that they value their communities and that they recognize their role as stakeholders in the community with shared common interests.  In other words, an organization needs to consider itself as being part of, and not separate from, the community in which it operates as it develops its approach to community involvement and development.  As described by ECOLOGIA, “[e]very business is a stakeholder in its community; it depends on the community and also affects its development”.[4]  The importance of authenticity cannot be understated and organizational representatives, from the directors and members of the executive team at the top down to the lowest levels of the organizational hierarchy, need to be mindful of how they interact with the community in both formal and informal settings.  A chance encounter between a mid-level manager wearing a jacket with the company’s logo and a community member in a restaurant can be just as impactful a presentation by the CEO to the town council.

Businesses, especially larger firms, are used to dictating the terms of engagement with their commercial partners and stakeholders; however, effective community engagement by organizations means acknowledging and accepting the influence of the unique historical, cultural, religious, social, political and economic characteristics of the community and overcoming the challenges created by differing and conflicting interests among the other stakeholders in the community. ISO 26000 emphasizes that organizational social responsibility with respect to community involvement and development means recognizing and having due regard for the rights of community members to make decisions in relation to their community and thereby pursue, in the manner they choose, ways of maximizing their resources and opportunities.  Organizations must also appreciate that the value of their contributions will be enhanced by working in partnership, and sharing resources, efforts and experiences, with other community stakeholders.

This article is part of the Sustainable Entrepreneurship Project’s extensive materials on Community Engagement and Investment and an excerpt from Community Engagement and Investment: A Guide for Sustainable Entrepreneurs by Alan S. Gutterman, which is available for purchase at various online booksellers.  Readers may also enjoy the author’s Responsible Business: A Guide to Corporate Social Responsibility for Sustainable Entrepreneurs.

[1] GRI 413: Local Communities 2016 (Amsterdam: Global Sustainability Standards Board, 2016).

[2] Corporate Social Responsibility Processes and Practices Manual: Operating Guidelines (Africa Oil Kenya B.V., July 2015).

[3] Id.

[4] Handbook for Implementers of ISO 26000, Version Two (Middlebury, VT: ECOLOGIA, 2011), 32.