Stakeholder Engagement Strategies in Sustainable Development Hector Pearson – National Grid, UK

1. Colloquium: Oporto, 23rd September 2009 Stakeholder Engagement Strategies in Sustainable Development Hector Pearson – National Grid, UK

2. Presentation Outline • Introduction • Consultation and engagement • Why electricity utility organisations should embrace consultation and engagement • Cigré Working Group - work to date • Cigré Working Group – initial findings • General conclusions

3. Introduction • Work of Cigre Working Group – C3.04 - Stakeholder Engagement Strategies in Sustainable Development Philippe Cimiterra – RTE - France Manuela Damas - REN - Portugal Arilde Sutil Gabriel – Copel - Brazil Juliana Walendowsky Grando - National Grid - UK Fiona Havenga – Eskom - South Africa Didier Laine – RTE - France Mirian Regini Nuti – EPE - Brazil Michelle Palmer – Powerlink - Australia Hector Pearson - National Grid - UK Henk Sanders - TenneT - Netherlands Mercedes Miranda – REE - Spain • Also, personal experience from National Grid

4. Why do companies engage with stakeholders? • May be required by law • Investors or governments may seek it • In many countries, citizens have rights to influence projects • Citizens have the power to influence projects • Local politicians • Press / radio / TV / newspapers • Power of the internet

5. Public attitudes towards hypothetical developments proposed in their community Strongly Somewhat Somewhat Strongly Net oppose oppose support support opposition Waste Collection/landfill site 80 6 3 9 -73 Power plant or utility 77 6 5 8 -70 Quarry 75 7 5 7 -70 Office 53 7 9 27 -24 Retail park 54 7 9 27 -24 Supermarket 50 7 10 31 -16 New road project 36 8 15 36 7 School 10 8 15 61 54 Source: K Barker, Review of Land use Planning, Interim Report – Analysis, UK, 2006

6. Power of the press

7. Power of the press

8. Power of the internet

9. Why do companies engage with stakeholders? • Good corporate governance in companies may require engagement • The responsibilities of Sustainable Development strengthen the need to engage with stakeholders.

10. has stated that: the right to be heard by people who are affected by an organisation’s activities, or who can affect an organisation’s activities; and obliging the organisation to respond to these concerns, makes organisations perform better. From AccountAbility

11. Why do companies engage with stakeholders? Development of electricity networks, and their maintenance and refurbishment - can affect communities crossed by the networks

12. Why do companies engage with stakeholders? Development of electricity networks, and their maintenance and refurbishment - can affect communities crossed by the networks • can have an impact on the natural environment, landscape and cultural heritage • and generates community interest in the utility’s activities

13. Stakeholder engagement and consultation strategies adopted by electricity utilities Focus on involvement and engagement rather than “Communication” Assist electricity utilities to develop more effective consultation and engagement strategies Objectives of the Working Group • Through asset lifecycle of project • Covering electricity generation, transmission & distribution • All within the Sustainable Development agenda

14. Sources - bibliography THE STAKEHOLDER ENGAGEMENT MANUAL Volume 1 and 2, 2005 AccountAbility, the United Nations Environment Programme, and Stakeholder Research Associates Get Connected: Guidelines for Stakeholder Dialogue The Environment Council Effective Engagement in the EU Consultation Models for Overhead Line Projects Technical Brochure October 2004 Stakeholder Engagement Standard Community engagement in planning – exploring the way forward Final Report of the INTERREG IIIB Advocacy, Participation and NGOs in Planning Project

15. Definitions Communication: Information-sharing but generally through one-way, non-iterative process. Consultation: a dynamic process of dialogue between two or more parties that leads to a decision. Ongoing exchange of views and information. Not a one off event. Engagement: An organisation’s efforts to understand and involve stakeholders and their concerns in its activities and decision-making process. Stakeholder: Any group or individual who can affect, or is affected by an organisation or its activities.

16. Informing people (Awareness raising, communication, education) Consulting people (Obtaining feedback, gauging opinion) Involving people (Contributing ideas, identifying priorities, developing vision/aspirations) Acting together (Partnerships) Empowerment (Stakeholder-led decisions) Different levels of engagement

17. Online questionnaire Confidential Open and tick boxes type of questions Quantitative and qualitative Analyses Focus on reaching the right representatives within the utility Cover as many countries as possible Survey mechanisms

18. Policies, Drivers and Legal Obligations Stakeholder Coverage and Identification Process Approaches to Consultation and Engagement Current Methodologies, Practices and Processes Used Engagement Management and Implementation Experiences, Impact and Benefits of Engagement Best Practices Development: Key Constrains, Challenges, Areas for Improvement, Moving Forward. Questionnaire content Stakeholder Engagement and Consultation Strategies

19. Which Country? Number of responses per country

20. 50 Responses 39 Final responses 11 Incomplete 61 Registered on the website We are using the 39 final responses – will give us greatest insight. Survey results – findings

21. About the companies

22. Main activity sector covered

23. If generation – what is the type?

24. Organisations’ policies 92% have published an Environmental Policy ‘Other’ responses: Quality policy Heath and Safety policy Ethics and Behaviour Code Business principles Framework for Responsible Business

25. Consultation in different stages of projects

26. Legal requirement or voluntary basis? 62% - Legal requirement depending on the scale of the project 31% - Legal requirement for every project 23% -Legal requirement only if the project need a formal Environmental Statement/EIA

27. In summary • Whenundertake Consultation: • Requires formal Environmental Statement/EIA • Legal requirement • Very Large projects • Developing policies • Small projects • MainDrivers: • Legal obligation (87%) • Reputation, values and ethical issues (87%) • Seeking views to influence design (28%)

28. Good Stakeholder Relation Reputation Customer Focus and Loyalty Build Trust Secure Licence to Operate Less Opposition, Gain Public Acceptance Engagement beyond legislation Public have the right to be heard...

29. Measurement and impact of consultation & engagement approaches Does the organisation report back to stakeholders and community about responses received and how the consultation process influenced policies and practices? Yes No Yes No Is this a legal obligation?

30. Who is consulted? • Legal • Local Government • National Government • Regulatory agencies • Land owners • Affected communities • Informal • Media • NGOs • Politicians • Other utilities

31. Effectiveness of consultation tools The most effective: Individual face-to-face meetings Community meetings Dedicated website Support from external experts Tools used less: Radio Web-based surveys Phone enquiry number       

32. Constraints to consultation

33. Special processes for problems • Translate into other languages – use translators • Use local contacts as much as possible • Use people with local knowledge • Keep words simple – avoid technical words • Start early! • Concentrate on “critical” stakeholders • Set clear objectives – areas open to Influence • Be open about difficulties/constraints

34. Special processes for problems • Get NGOs to provide assurance • Individual consultation with the most “complex” consultees • Allocate special budget • Use independent expertise (e.g. workshop facilitators) • Produce additional material – specific public meetings • Focusing the dialogue on the main issues of concern

35. Considered important • Provide as much information as possible, targeted and tailored to suit particular stakeholders • Start consultation as soon as possible • Offer project-related documentation for scrutiny • Ensure the need for the project is robust • Undertake project stakeholder mapping as soon as possible; • The EIA preparation involves consultation (Overwhelming!)

36. Views about engagement • Agree/Strongly Agree: • Some objections at Public Inquiries occur through misinformation and rumour • It’s important to allow full disclosure at all levels, be open, honest and responsive • It’s essential to maintain cooperation constructively over time and to continually consult on existing assets in order to build long-term relationships • Usually during the consultation process trust is built, not destroyed

37. Views about engagement • Disagree/Strongly Disagree • Stakeholder consultation is reactive response to community opposition • There is a positive correlation between the level of community consultation and the level of community opposition • Stakeholder consultation can end up being a process of “informing” consultees, without real scope for influencing

38. Challenges • EMF/health Issues • Explaining the need for the project / project rationale • Manage expectations of communities • Engage the extreme opposition e.g. “Greens”, “Radicals” • Difficulties in overcoming misinformation and cynicism regarding the organisation’s intentions and approach • Initial disinterest or ignorance in the early stages of the project, followed by strong opposition at the point of submitting an application • NIMBY attitudes

39. Does engagement provide strategic direction for the utility? YES! YES! Important aspect of maintaining Licence to operate “Essential to have public support” “It is our responsibility to guard the interest of the community”

40. ‘Asking’ has to come before ‘deciding’ Do not use consultation in order to justify the project Do not mix up “selling” and “asking”; Integrate consultation and involvement in project decision-making Manage the expectations of all stakeholders - clearly state aspects stakeholders are able to contribute to or influence, and the aspects of the project that are fixed May need to build the capacity of stakeholders Do not forget ‘voiceless’ Advice - effective engagement

41. Understand your stakeholders Start early in the process Create an open process Use a mix of Methods – be flexible Have feed in and feedback loops in place Enable constructive debate Monitor and Evaluate Engagement must be genuine and meaningful Advice - key principles for engagement

42. Materiality: knowing what is important to you and your stakeholders Completeness: understanding your impact and what people think of you Responsiveness: demonstrating an adequate response to stakeholder views Advice - engagement principles

43. Meaningful stakeholder engagement is an essential part of building a Sustainable Society – So it’s important to get it right! Utility companies are working for the benefit of society So we have to listen to society Stakeholders = People Conclusion

44. Thank you!