New media techniques mean that companies have many more options for engaging with their stakeholders

Companies have come a long way from the days when stakeholder dialogue was avoided. Now some are setting examples by using innovative ways to engage with stakeholders.

They are taking their stakeholder engagement online and using digital technology to reach out to a wider audience than before.

Creating detailed corporate responsibility sections on their company websites, use of Facebook, Twitter, blogs, YouTube, games, and e-newsletters are some of the ways savvy companies are delivering sustainability communication.

“We are seeing a wide range of interaction online about sustainability issues in various directions,” says Elaine Cohen, director of Beyond Business, a corporate responsibility consultancy in Israel (and a regular contributor to Ethical Corporation).

Ease of managing information on company websites, and the availability of a variety of communication platforms are also making it possible for companies to deliver targeted communication to groups of stakeholders.

“When we created the sustainability section on our website back in 2007, we asked: ‘Who are our stakeholders? Who are the people that we want to talk to about our business? What kind of things do they want to hear from us? How do they want to read it on the website, and what will help them understand the message better?’” says Nicki Lyons, head of media relations in the UK at the food and drinks company PepsiCo.

Asking the right questions has helped Pepsi understand who to target with its online communication.

Lyons says the company has a clear idea of who the people are that are interested in Pepsi’s business. “Some of them have no knowledge about the business at all. Some of them have a misguided view.”

She says the company has understood that there are a number of different stakeholders who for different reasons “want to know what we are up to”.

“So the strategy has always been about talking to people in a way they are interested in hearing from us, in a way that is convenient and accessible to them, and also about things they want to hear about,” Lyons explains.

Pepsi has long used a monthly e-newsletter to target stakeholders. People can receive it after they register online. But now the company is taking a bold step in targeted communication and online stakeholder engagement.

The company has just published its farming report, an example of highly targeted communication. “We pulled it out as a separate narrative because it’s such a compelling story,” Lyons says.

The farming report sets out an ambitious target of reducing carbon emission and water use by 50% across the company’s agricultural activity in the UK. The report then talks about how the company intends to work in partnership with farmers to deliver on those commitments.

Farmers’ blog

The company’s sustainability website has undergone refurbishment to include a blog that will be written by farmers and will be open for comments. These will be reviewed weekly and points will be answered on a company blog written by the agricultural team. Other features include a YouTube channel and Twitter feed.

“We work with 350 farms in the UK and we will be bringing them on a sustainability journey with us and asking them to work with us to deliver on those commitments,” says Lyons. “It is a much broader engagement than the traditional engagement we have done before.”

Lyons says that as technology has developed, people and stakeholders are much more savvy about how and when they want to receive information from companies.

Pepsi last year experimented with a roundtable model of stakeholder engagement when it launched its water report. The roundtable was hosted by PepsiCo vice-president of operations Walter Todd in London and chaired by Ethical Corporation’s Toby Webb. Webb also did a podcast on the water report, and Pepsi of course posted the full water report on the website.

The online engagement, Lyons says, will enable the company to broaden the delivery of the message. She cautions, though, saying: “We want to do this slowly and in incremental steps. We want to make sure that we are giving stakeholders what they really want.”

While some companies hope to find value in targeted communication aimed at segmented stakeholders, observers caution against simplistic segmentation.

“It’s not easy to segment today’s stakeholders. You can have an employee who is also a shareholder, who is also an environmental activist and who is also a member of the local community,” says Cohen. She says stakeholders don’t have to have boundaries.

She suggests that the focus of responsible business communication should be based on issues, not stakeholders. Companies should be doing a materiality analysis to identify issues important to their business and then addressing these issues from the broadest stakeholder perspective possible.

“Whether it is on a website or in a printed corporate responsibility report, the most interesting information is usually about the issues, not necessarily about employees, community or the marketplace,” Cohen says. These are the standard basic building blocks of communication, but the real interesting, attractive, dynamic, relevant information to most stakeholders is about the issues the company is trying to address.

And a lot of the online conversation is not necessarily happening on company websites. The conversation is taking place on platforms that are designed for communication such as Facebook.

Starbucks, for example, has 40 million friends on its Facebook page, Coca-Cola has 12 million followers and Ben & Jerry’s has 1.5 million. And non-governmental organisations are not getting left behind in online engagement: Greenpeace has over a million Facebook fans.

A key question then is about a company’s risks of losing control of debate if the conversation is happening on third party sites.

“There is always a risk that the conversation will go out of control, whether it’s on your website or not, whether you are driving it or not,” Cohen says.

Cohen says it’s not about how the company generates or initiates the communication. It’s about how the company becomes a player in that conversation. “It can’t be a controller if it can’t be a player. The better a company participates the more the communication will be to their advantage.”

Engaging with media

While companies are making progress on engaging with diverse stakeholders, engaging with mainstream media on sustainability remains a key challenge for most of them. An active engagement with the media can dramatically broaden the delivery of companies’ sustainability communication.

“The media is increasingly open to covering and engaging companies on corporate responsibility issues, something lots of newspapers have been sceptical about for years,” says Peter Stiff, business reporter for the Times.

Stiff explains that the scepticism has been because companies say they are doing a lot but they don’t really illustrate why it matters. “However, the more savvy companies are really doing the things they say they’ll do and they are able to communicate why that is important for them,” Stiff says.

He points to a recent example when Kraft-Cadbury took journalists on a trip to Ghana to communicate what they were doing there for the local community and why they were doing it.

Hugh Williamson, Europe news editor at the Financial Times, says email alerts and weekly and monthly round-ups are useful for journalists as they don’t have time to check out all the websites.

And the media is more likely to be engaged if the sustainability story of the company is credible and impactful. Williamson says: “We would also look at how different the new CSR initiative is, how substantial the initiative is, how long term it is, what sort of alleged benefits it offers to stakeholders and how independently the programme is monitored.”