Stakeholder engagement in developing sustainable business

Increasing sustainability requirements resulting from expanding regulation and stakeholder needs have raised sustainability to an important strategic goal and a perspective integrated to functions. To achieve this goal, more goal-oriented and effective collaboration with stakeholders is needed. From the company perspective the benefits of stakeholder engagement are related to the development of trust and shared responsibility, efficient use of
resources, increased flexibility, innovations and learning. In addition to knowledge and data, system-level thinking, improved dialogue, motivating, building involvement and culture, recognizing pitfalls and looking to the future are needed when developing sustainable business. The aim of our research was to understand the ways in which companies approach stakeholder engagement and involvement when developing sustainable business. We used 14 interviews of sustainability managers and directors from large Finnish corporations and two case studies from two Finnish companies. Based on the findings, we first identified some challenges related to value co-creation and stakeholder engagement. Secondly, through the cases we considered ways to support companies to understand the stakeholder perspective, and to develop their approach.

According to the companies, the challenges of stakeholder engagement in value network are particularly related to sharing of expertise, getting all committed, and understanding deeply enough the needs and the value capture of stakeholders. Assessment of sustainability in operations and comparison of performance were also perceived difficult. Stakeholder
engagement can be supported, for example, by launching a programme including concrete operational actions for achieving sustainability goals and promises to the environment, employees and other value network actors. We also found that even the simple exercise of looking into the value of sustainability from a stakeholder perspective can generate new
understanding and insights in a company. Understanding stakeholders’ perspective and considering value capture provides a more diverse and pluralistic perspective on sustainability business, strategic management and leadership.