Whether you are a Business or a Public Authority the process of designing your strategy is similar and should follow 6 basic steps. This practice has been used for many years by sustainability professionals and is based on the principles laid out within AA1000 by Accountability.
Step 1 – Your Stakeholders
- Internal department and employees
- Local councils and other public sector organisations
- Community contact groups
- Local businesses
- Media sources
- Voluntary sector
- National Government
- National databases such as HACT
Step 2 – Needs analysis
- What are their needs?
- What are the outcomes that they are looking for?
- What impacts are you having now both negative and positive?
Step 3 – Materiality Assessment
The process of establishing materiality levels for non-financial information starts with the understanding of, and engaging with, the important stakeholders. You will then need to collate, categorise and prioritise the stakeholder issues that you have identified to allow you to develop a clear and impactful strategy.
Step 4 – Your Vision and Strategy
Key issues that should be covered within your strategy include
- Overall vision and how it links to the overall business or Council strategy
- Objectives and targets
- Road map for implementation
Step 5 – Metrics, Measures and KPIs
There are 1000’s of social and environmental impact metrics presently being used across the world. These range from specific metrics such as ‘carbon emissions’ or ‘jobs created’ through to the happiness index (used in Bhutan) and sentiment analysis. It is probably true to say that unlike environmental metrics that have been well developed and used over many years that our collective understanding of social metrics is less clear and is still emerging.
It will take more than one metric to manage and report your impact and in order to decide the most appropriate solution you will need to consider the following questions:
- Does the measure or KPI reflect what you are trying to achieve?
- Does it help you understand how you are performing and how you can improve?
- Does it correspond to your activities (input) or the outcomes you are trying to achieve – you will need both
- Is it objective and verifiable – will an independent audit arrive at the same answer?
- Does it use financial proxies – is it reliant on attributed financial values and if so, are they universally agreed and defendable?
- Is it scalable across your portfolio?
- Is it cost effective to measure?
- Can you benchmark it in order to compare performance between organisations?
- Is it compliant to legislative and industry frameworks?
- Is it easy to communicate?
- Does it cover all aspects relevant to your business for example, the environment, people and monetary value or hyper-locality?
- Is it applicable across public, private, third and community sectors?
- Is it equally valid regardless of the size of the industry?
- Does it produce empirical results with absolute values so that decisions can be made for procurement?
We are presently developing a detailed KPI library to help you identify relevant metrics which you can access here.
Step 6 – Feedback
- Stakeholder engagement policy – You will need to formalise the implementation of a formal stakeholder engagement policy. The scope and boundary of the stakeholder engagement policy should be clearly defined, articulated and communicated. The background, logic and impact of the policy should be included to set the scene for the policy.
- Define a mechanism to feed stakeholder concerns into strategic planning to ensure alignment – Stakeholders are interested in the outcome of engagement, and the corresponding link to your strategy, delivery model, risks and key performance indicators. The organisation should consider presenting a balanced view to stakeholders, clearly showing how stakeholder engagement has informed the manner in which the strategy has been implemented.
- Design a process for dealing with conflicts between stakeholder concerns – Your strategy will cover many issues and the likelihood of conflicts is high and there should be a proper process to deal with conflicts between stakeholder concerns. A short statement should be included within your policy on how the organisation deals with such conflicts.