Elevate your ESG maturity: Stakeholder engagement

As the corporate world expands its focus from shareholder profits to stakeholder needs, organizations must gain a holistic view of their stakeholders’ needs, wants, and expectations, and develop collaborative strategies that offer mutual advantages.


It’s critical for organizations to understand from the start that their environmental, social, and governance (ESG) initiatives must be built around a complex ecosystem of stakeholders, both internal and external. ESG efforts impact all of an organization’s stakeholders, from employees to customers, investors, suppliers, communities, and regulators. In turn, those groups can all significantly impact the organization’s success. A company facing backlash from employees over environmental concerns, for example, or being sidestepped by investors due to a negative (or nonexistent) ESG track record, stands to risk its reputation, financial stability, and overall earnings potential. 

Knowing this, it is vital for companies at any stage of CohnReznick’s ESG Maturity Model  – Novices, Supporters, and Gamechangers alike – to gain a holistic view of their stakeholders’ needs, wants, and expectations. It’s about getting a full picture that includes – and extends out into – the very communities where their businesses are operating. The organization should maintain frequent communication with those communities, discerning their ESG concerns and developing collaborative strategies that offer mutual advantages.

Maturity Model: Stakeholder engagement

Novice Supporter Gamechanger
No formal materiality assessment performed Consideration of stakeholder issues and concerns, but not prioritized according to materiality – i.e., the sustainability topics considered by stakeholders to be most influential to a company’s business operations Formal and documented materiality assessment to identify stakeholder issues
Stakeholder engagements are typically tactical and reactive No formal stakeholder partnerships or monitoring put in place Complex stakeholder partnerships are regularly developed and monitored

Novices have a chance to lay the foundation for a transparent and trusting relationship with those who influence and are influenced by their operations. They likely will have started assessing and addressing the needs of basic stakeholders such as customers, investors, and their board of directors; however, they recognize that a vaster spectrum of voices makes up their stakeholder community. While their roadmap for full stakeholder engagement might be foggy, some may have started engaging the communities where they live and work.

Companies in the Supporter category are actively integrating stakeholder feedback into decision-making processes, and have become more embedded in their communities. Their strategy to engage stakeholders is constantly evolving, and goes beyond sporadic communication. This stage is filled with opportunities to deepen bonds created with local communities, truly understand stakeholder concerns, and co-create solutions that resonate.

Gamechangers transform dialogue into collaborations that reshape the core philosophy of their business. They move beyond consulting their stakeholders to forging partnerships, co-creating to anticipate concerns, and setting industry standards for proactive engagement. This group is not only addressing current challenges, but also future-proofing the path ahead through shared goals and combined resources.

Strengthen stakeholder engagement with strategy

The first thing every company needs is a stakeholder engagement strategy, a plan for how and when to engage with each different stakeholder group.

The first step to developing that strategy is identifying key stakeholders. This is important because a company’s ESG stakeholders can vary greatly depending on their specific organization and the industry that they’re operating in. For example, in the food and beverage industry, non-governmental organizations (NGOs) will serve as very important stakeholders and will be pushing the environmental agenda more than most other stakeholders. The professional services sector, on the other hand, likely will not face those types of requirements or interactions, but may be more accountable to clients, whose trust and satisfaction is critical.

Specific steps for organizations depending on their Maturity Model stage include:


  • Develop a stakeholder engagement strategy.
  • Track and evaluate the outcomes of stakeholder engagement activities.


  • Conduct a formal comprehensive materiality assessment.
  • Engage key stakeholders in strategic initiatives.


  • Prioritize key material stakeholder issues.
  • Expand stakeholder engagement to include a wider range of stakeholders, across various levels of influence and impact.

The time to act is now

Historically, the corporate world has been narrowly focused on shareholder profits, but now it is very much moving toward stakeholder needs (i.e., “stakeholder capitalism”). Companies that fail to recognize that – and fail to improve their practices to meet the needs of more than just their shareholders – are going to quickly fall behind their competitors. Studies show that meeting the needs of stakeholders through ESG drives higher earnings; for example, research by the Harvard Business School from 2012 to 2017 found that companies that focus on material ESG metrics – linked directly to their core business and created from stakeholder input – have better returns on capital and outperform those that do not. Companies that are focused on stakeholder capitalism understand this and are looking beyond just shareholder profits to achieve even higher returns.

A proven, integrated ESG methodology

Whether you are taking the first steps on your ESG journey or your existing program needs an overhaul, CohnReznick can help. Using a proven, integrated methodology that combines our own ESG experience with industry insights, we will help you effectively advance your ESG initiative at each step of its lifecycle.

Our four-phase approach is built on value creation and impact throughout the journey, and includes:

  • Phase 1: Assess ESG current state, identify ESG priorities
  • Phase 2: Design ESG strategy, roadmap, and KPIs
  • Phase 3: Implement ESG initiatives with governance, technology, and training
  • Phase 4: Validate process and data and report progress against KPIs

With a 35-year track record in community investment and shaping governance strategy, CohnReznick tailors ESG programs to meet industry-specific stakeholder requirements. Using a process rooted in advanced data analytics and exclusive primary research, we leverage a cross-functional team that delivers seamless execution and enables fast, integrated results for companies of all sizes and across all industry sectors.


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Jenny Brusgul

Sustainability Advisory Practice Leader

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This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.