The Global Business Initiative (GBI) published a guidance brief on what good practice looks like when it comes to meaningful stakeholder engagement. This is part of GBI’s new guidance briefing and webinar series, focused on sharing existing good practice of risk-based human rights and environmental due diligence for companies and policymakers. You can keep up to date with the series here.
Human Level’s Take:
- Engaging with stakeholders isn’t just the right thing to do — it’s smart business. Meaningful stakeholder engagement is a cornerstone of effective human rights and environmental due diligence (HREDD). It ensures that companies stay aligned with international standards, identify risks early, and develop better strategies to prevent and address harm
- Done well, stakeholder engagement identifies risks and impacts early; strengthens prevention and mitigation strategies; boosts credibility and trust; reduces legal, reputational and operational risks; and enhances long-term resilience and adaptability. In short, it’s not just a compliance box to tick - it’s a strategic investment
- Rightsholders — like workers and local communities — are directly impacted by business operations and offer vital first-hand insight. While all rightsholders are stakeholders, not all stakeholders are rightsholders. Companies must prioritise engagement with them or their representatives to ensure HREDD efforts are credible and effective. Trade unions and human rights organisations also play a key role by bringing expertise and advocacy to the table
- So, what does meaningful engagement look like? Engagement must be 1) inclusive, accessible, culturally-appropriate, gender-sensitive and address language, literacy and logistical barriers, especially for affected stakeholders like workers, communities, and vulnerable groups; 2) a two-way dialogue, allowing stakeholders to voice concerns, offer insights, and influence decisions - not just receive information; 3) early and ongoing to reflect evolving risks and stakeholder expectations; 4) clear, accurate and timely and provide information about operations, potential impacts and mitigation efforts in a format that stakeholders can understand; 5) safe and non-retaliatory, with safeguards in place to protect stakeholders; 6) integrated into business decision-making, shaping policies, risk assessments, mitigation strategies and grievance mechanisms; 7) accountable, with companies providing regular updates to stakeholders on how their concerns are addressed and grievance mechanisms are available if commitments are unmet or engagement fails
Some key takeaways:
- Why meaningful stakeholder engagement is essential: Meaningful stakeholder engagement is an essential component of human rights and environmental due diligence (HREDD), ensuring that due diligence processes are informed, effective and aligned with international standards. It can help companies with six elements. 1) Identify risks and impacts. Stakeholders - especially affected rightsholders such as workers, local communities and Indigenous Peoples - offer first-hand knowledge of how business operations, supply chains, and investments impact human rights. 2) Strengthen risk mitigation and prevention. Engaging stakeholders early and meaningfully enables businesses to co-develop effective risk-mitigation strategies. 3) Enhance legitimacy and accountability. Engagement reinforces the credibility and trustworthiness of a company’s human rights efforts and shows that they take due diligence seriously, beyond a tick-box exercise. 4) Improve access to remedy. Stakeholder input supports the creation of accessible, culturally appropriate, and effective remediation channels. 5) Reduce legal, reputational, and operational risks. Engagement helps companies proactively address concerns before they escalate into disruptions, lawsuits, or regulatory penalties. 6) Strengthen long-term business sustainability. Companies that listen to and act on stakeholder concerns are better positioned to adapt to emerging risks, evolving regulations, and shifting societal expectations. Stakeholder engagement is therefore a strategic investment in long-term business resilience and not just a compliance obligation.
- Key elements of meaningful engagement: Companies should prioritise engagement with rightsholders, who are directly affected by their activities. While broader stakeholder input is valuable, rightsholders or their representatives must be consulted to shape HREDD efforts. Key actors like trade unions and human rights organisations should also be engaged for their expertise, advocacy, and representation of affected stakeholders. This engagement should be a genuine, inclusive and continuous process that ensures affected stakeholders actively shape business decisions, risk assessments and remediation efforts. There are seven key elements. 1) Inclusivity and accessibility. Engagement must include all affected stakeholders, especially workers, communities, Indigenous Peoples, human rights defenders, and vulnerable groups. It should be culturally appropriate, gender-sensitive, and accessible, addressing language, literacy, and logistical barriers. 2) Two-way dialogue and responsiveness. Engagement should enable genuine dialogue, allowing stakeholders to voice concerns, offer insights, and influence decisions - not just receive information. 3) Early and ongoing engagement. Engagement should begin early in the due diligence process and continue regularly to reflect evolving risks and stakeholder expectations. 4) Transparency and information sharing. Companies must provide clear, accurate and timely information about operations, potential impacts and mitigation efforts in a way that stakeholders can understand. 5) Safe and non-retaliatory participation. Stakeholders must be able to participate without fear of intimidation, retaliation or coercion, with safeguards in place to protect them. 6) Integration into business decision-making. Engagement should inform and shape corporate policies, risk assessments, mitigation strategies and grievance mechanisms. 7) Accountability and follow-up. Companies should provide regular updates to stakeholders on how their concerns are addressed and ensure grievance mechanisms are available if commitments are unmet or engagement fails.
- What good practice looks like: The guidance brief provides examples of good practice for effective engagement with affected stakeholders. Good practices include:
- Establishing strong engagement frameworks. This involves securing senior leadership support for stakeholder engagement through internal awareness awareness raising. It also involves setting clear objectives on stakeholder engagement in policies and processes and aligning them with international standards, such as the UN Guiding Principles on Business and Human Rights (UNGPs)
- Identifying and mapping stakeholders and the engagement context. This involves conducting stakeholder mappings to ensure inclusive representation, with a focus on vulnerable or marginalised groups at higher risk. Prioritising affected stakeholders and mapping the engagement context - such as value chains, physical locations or business context - to clarify roles and identify opportunities for collaboration are also important
- Designing meaningful engagement strategies that foster accessibility. For instance, adapting engagement styles and methodologies to the level of knowledge (for example, technical understanding of a project) of affected stakeholders and other parties involved in the engagement, and be prepared to meet them where they are at in discussions
- Conducting meaningful engagement through open and flexible dialogue. This involves initiating engagement early and maintaining ongoing engagement with a broad range of affected stakeholders or appropriate proxies. Companies can also consider whether impacted stakeholders would benefit from information, assistance or other help to address power and knowledge imbalances
- Engagement activities are built to foster trust and accountability. This includes providing transparent information to stakeholders and empowering them to participate effectively. It also means ensuring stakeholders feel comfortable and safe providing candid feedback
- Creating effective grievance mechanisms. This involves developing accessible grievance mechanisms and ensuring affected people are aware of these processes and involved in their design. It also includes collaborating with experts and affected groups to strengthen grievance processes
- Strengthening internal collaboration to gain internal buy-in and awareness-raising. For example, building cross-departmental buy-in and training staff on effective stakeholder engagement
- Utilising various tools and resources to improve engagement, for example, digital tools, particularly worker voice tools. Companies can also join industry or multistakeholder initiatives to help address complex challenges but they should not rely on these solely as proxies to engagement with affected groups
- Monitoring, evaluating, and adapting the engagement plan. This means monitoring and evaluating the effectiveness of stakeholder engagement efforts, as well as adapting practices as human rights risks, operational contexts and feedback evolve
- Anticipating and preparing for challenges. This includes preparing for difficult conversations and navigating power dynamics with sensitivity and creativity
- Preparing for meaningful stakeholder engagement in conflict-affected areas. This involves conducting engagement in a conflict-sensitive way to ensure the safety of stakeholders and inclusivity. While keeping safety paramount, ensure that engagement methods adapt to the context and do not contribute to harm
- Preparing to be self-critical and try again when engagement fails. This involves critically assessing the effectiveness of the company’s engagement plan and allowing acknowledgment of failure internally so that different approaches can be attempted. It also involves engaging external experts and conducting lessons learned exercises to strengthen internal capacity and improve future approaches
