About forty people are clustered in small groups around flipcharts in a meeting room in Yangon. They come from different companies and industries but have one thing in common: they’re here to learn the art of stakeholder engagement.
Effective stakeholder engagement is at the heart of IFC’s environmental and social advisory work, which helps companies achieve sustainable development by minimizing the negative impact of their projects on the environment and communities, while maximizing the benefits to all.
The first rule is to start early in the planning process, having done the research.
“Stakeholder engagement is not just calling a meeting and telling everyone what you want to do,” says Mike Hosillos, Vice President of Corporate Services at SN Aboitiz Power Group in the Philippines. “It’s about going into the area already knowing who they are, and understanding the community’s problems and concerns so that your proposals and ideas are already in line with what they are experiencing.”
Good communication is key. The success of a project can hinge on the way in which information is shared with the communities, and how their feedback is received and integrated into planning. “It’s a dialogue. An exchange of information and ideas,” says Stephen Sparkes, Head of Environment and Social Governance at Statkraft - Europe's largest generator of renewable energy. “If you’re going to have good communication, you’ve got to have trust and respect from the beginning.”
Building trust means more than talking to communities; it means listening to them. That’s why IFC is training companies in Myanmar to establish effective engagement practices and set up grievance mechanisms through which people voice their concerns, not just initially, but throughout the life of the project.
“It allows the company to proactively engage, anticipate issues and address concerns collaboratively with communities before they escalate and cause costly project delays or even damage to the company’s reputation,” says Kate Lazarus, Team Leader in IFC’s Environmental and Social Advisory.
Companies that invest in creating good relationships with affected communities and other stakeholders reap the benefits of improved risk management and better long-term outcomes. Based on the performance of companies in its portfolio, IFC has found that those who put in place measures to minimize the negative impact on the environment and communities, tend to financially outperform those that do not.
There is no one size fits all approach though; it depends on the project and the needs of the community. To help companies find their way, IFC has produced a good practice handbook to guide them through the process.
“We have to walk in their shoes and understand what they need,” according to one workshop participant who says that what he's learned will change his approach when going into communities as a representative of his company. “We have to listen with our hearts," he says, "and let them see the company has understood their concerns.”
For more detailed information read IFC's Good Practice Handbook on stakeholder engagement.