Stakeholder engagement is important for listed corporations. In the 2018 revisions to the Code of Corporate Governance, a new pillar and principle was added for “Managing Stakeholder Relationships”. A stakeholder is here defined as a party that has an interest in the corporation and can either affect or be affected by it.

Many people associate stakeholders with the employees, customers, suppliers and, of course, shareholders of the company. However, companies should take note that their material stakeholders should extend beyond these mainstream groups to include the gamut of interest groups at the fringes of the community – who are increasingly demanding to be heard.

Activist stakeholders

In recent years, a new stakeholder group has emerged that uses the power of capital to actively lobby corporations to move away from businesses that are not environmentally sustainable or perceived as “dirty” by virtue of their carbon footprint. These fringe stakeholders are most active in using their financial muscle to lobby for change and make an impact in the climate change agenda.

Corporations like Royal Dutch Shell have had to respond to such stakeholder pressure by setting a target to halve their carbon footprint by 2050.

Similarly, commodities group, Glencore, has committed to restrict its coal production in response to such pressure. Earlier this year, Glencore announced a cap on its production of thermal and coking coal at 145 million tonnes per annum – essentially, its 2019 production levels.

Read more @Business Times