Guidance for investors, funders, and organizations
Impact investments intend to generate a positive social and/or environmental return to certain sectors, communities, and/or populations alongside their financial returns.
Investments and activities of organizations will likely affect many different types of stakeholders (e.g., beneficiaries, organization’s staff, community, environment).
To truly understand the extent to which impact and value are created, to identify the risk of negative impact and unintended outcomes, and to uncover ways of maximizing social and/or environmental value creation, it is critical to engage with all affected stakeholders. That doesn’t just mean end-beneficiaries/end-customers or shareholders; it also means others affected such as staff and community, paying special attention to the most vulnerable and marginalized, and it means understanding the effects on the environment.
It is also important to keep in mind that situations are dynamic: both stakeholders and their interests might change over time. Therefore, stakeholder engagement plans should be reviewed and adapted as necessary.
This document provides guidance on some of the ways in which different types of stakeholders can be identified and engaged, and outlines how the valuable information that emerges can be used to learn, improve, and strengthen relationships.
The proposed process for stakeholder engagement is based on a 5-step continuous improvement cycle, which puts affected stakeholders at the center of activities. The steps are: planning and setting objectives; implementing activities; assessing and understanding effects; using the data gathered to learn, improve, and report; re-setting goals based on the learnings. For each step, we provide short and concrete examples of current practice by investors, funders, and organizations. The description of each of the five steps, including these practical examples, can be found on pages 10-23.
The Annex (pages 24-39) includes case studies and testimonies from different perspectives/roles in the value chain (part A) as well as reference to helpful methodologies and resources relating to stakeholder engagement and impact measurement and management (part B).
The extent to which each investor and organization engages with stakeholders will depend on their context, the level of maturity of the organization (e.g., start-up/greenfield vs. established organization) and the characteristics of the sector. What is vital is that all investors and organizations understand the perspectives of the stakeholders that are impacted by their activities, and take them into consideration when making decisions
Developed by Action Group 3 of the World Economic Forum’s initiative to Accelerate Impact Measurement and Management