Life Cycle Management a Business Guide to Sustainability Training Session 4 of 4 November 2006

1. Life Cycle Managementa Business Guide to SustainabilityTraining Session 4 of 4November 2006

2. Life Cycle Management Training - Outline • Introduction to LCM • First session • How LCM is used in Practice • Second session • Communicating LCM Results • Third session • LCM and Stakeholder Expectations • This Session!

3. Introduction to LCM • First session  done

4. How LCM is used in Practice • Second Session!  done

5. Communicating LCM Results • Third Session  done

6. LCM and Stakeholder Expectations • This Session!

7. Exercise: Who Has a Stake?

8. Companies are not alone in the world From: Life Cycle Management - A Business Guide to Sustainability. UNEP/SETAC, 2007.

9. Trends & changing expectations • Complexity of Stakeholder Expectations Increasing: • Economic  Environment  Social  Sustainability • Facilities  Products  Suppliers & End of Life • Trust Me  Tell Me  Show Me  Involve me • Definition of Stakeholders is Broadening • External  Internal

10. Consider 2 types of stakeholders The two types are not mutually exclusive

11. What do corporate-level stakeholders expect? Strategic, corporate level stakeholders: • Can have high expectations of the companies with whom they partner • Most focused on a clear agenda of specific issues • Approached by many companies, so will be selective of whom they work with • A majority of engagements at this level rely very much on personal relationships • Many expectations revolve around building & maintaining trust

12. What do community-level stakeholders expect? Local, community level stakeholders: • Expectations are unique to each community • Often, companies incorrectly assume that: • Stakeholders who want to be consulted or engaged will be the same in each community / region • Stakeholder expectations or issues will be the same from facility to facility, region to region • Companies need to take the time to effectively listen to their concerns, to ensure they understand the real roots of the concerns

13. Stakeholder expectations in 3 areas

14. Value of working with stakeholders • Opportunity creation • Risk avoidance

15. Business value of working with stakeholders source: Five Winds International, 2003. “Effectively Engaging Stakeholders: A survey of current practice” presentation to Conference Board of Canada, 20 May 2003, Kevin Brady, Director, Five Winds International.

16. Business value of working with stakeholders From: Life Cycle Management - A Business Guide to Sustainability. UNEP/SETAC, 2007.

17. Importance of Including Stakeholders • Opportunity Creation • Less Developed Countries • Presenting to the greater community • Establishing mechanism for ongoing community input • Building the organisation’s brand • Reassessing opportunities for value creation

18. Importance of Including Stakeholders • Opportunity Creation • Less Developed Countries • Existing Markets • Innovation • Good Reputation • Social Licence to Operate

19. Importance of Including Stakeholders 2. Risk avoidance • Project delays • Cancellations • Public relations disasters, e.g. Public boycotts • Damaged reputations

20. Process for Stakeholder Engagement • Commitment & Principles • Designate responsibility • Develop principles to guide engagement • Identifying & Prioritising Stakeholders • Identify key stakeholders • Identify the issues • Methods & Types of Engagement (“Toolbox”) • Determine appropriate method of engagement • Implementation & Exit source: Five Winds International, 2003. “Effectively Engaging Stakeholders: A survey of current practice” presentation to Conference Board of Canada, 20 May 2003, Kevin Brady, Director, Five Winds International.

21. Process for Stakeholder Engagement:1. Commitment & Principles • Designate responsibility to a group or individual: • need internal champion(s) to ensure that appropriate stakeholder engagement takes place • champions should have experience in stakeholder engagement & strong interpersonal skills for relationship building • champions should be interested, willing & see the value • champions need to report to a senior executive to ensure high level commitment & involvement

22. Process for Stakeholder Engagement: 1. Commitment & Principles • Develop principles to guide engagement, in order to: • demonstrate commitment to stakeholders • establish rules of the game for fair, respectful dialogue • ensure consistent approach across all operations

23. Process for Stakeholder Engagement: 2. Identifying & Prioritising Stakeholders Potential Stakeholder Groups to include: • International, national and regional regulatory bodies • Shareholders • Investment community • Local and global environmental and social non-governmental organisations • Local communities • Members of supply chain • Customers • Employees and contractual workers • Media • Labour Associations • Commercial Trade Associations

24. Process for Stakeholder Engagement: 2. Identifying & Prioritising Stakeholders • Ask the right people: • Contact/ interview key representatives from your organisation about who they feel are key stakeholders • Collaborate with leaders from various business functions

25. Process for Stakeholder Engagement: 2. Identifying & Prioritising Stakeholders • Rank stakeholder groups based on their relevance to your organisation’s LCM strategy • Prioritise the stakeholder groups based on their relevance to the business • Select the stakeholder groups in terms of their expectations

26. Process for Stakeholder Engagement: 3. Methods & Types of Engagement • What determines the method of engagement? • business value, issues being discussed, location, stage of process, level of resources required etc. • Method entail different levels of involvement • Information Sharing • Consultation • Collaboration Increasing level of involvement

27. Implement develop action items to address issues raised measure success Maintain enthusiasm & credibility Justify time & expense Exit Set a time line: If reason for engagement is addressed, exiting relationship is natural With local community stakeholders, engagement often lasts for the duration of an operation or project, even after closure or decommissioning Process for Stakeholder Engagement: 4. Implementation & Exit

28. Process for Stakeholder Engagement: 4. Implementation & Exit Case Study: CEMEX

29. Stakeholder engagement case studies

30. Case Study – Anglo American • Have Operations in over 60 countries • Many in developing or emerging markets • Often in remote or rural communities • There is a public expectation that they facilitate poverty alleviation, health and unemployment, both in their operations and in the greater community.

31. Case Study – Anglo American • Use their Socio-Economic Assessment Toolbox (SEAT) • Develop Community Engagement Plans • Facilitate engagement through • Social Forums • Partnerships • Continually look for Feedback

32. Case Study – Anglo American Stakeholders include: • Investors • Employees and their representatives • Governments • International organisations • Communities (operational responsibility) • Contractors and suppliers • Customers • NGOs

33. Case Study – Anglo American • Mondi Packaging Paper Mill • Located in Swiecie, Poland • Conducted a socio-economic assessment • Developed a strategy to address local concerns

34. Case Study – WWF Conservation Partners Basic Principles of Engagement • Mutual Respect • Transparency • Right to criticise

35. Case Study – WWF Conservation Partners The Partnership aim to facilitate: • Conservation • Communications • Joint Learning Initiatives • Conservation Partnerships • Investment

36. Case Study – WWF Conservation Partners

37. Discussion: Who Can I Engage?

38. Additional questions for thought • Who in your organisation should participate in identifying the most important stakeholders to engage with? • Name one issue important to your organisation that stakeholder engagement could help address? • Think about one particular stakeholder you could work with. What perspectives and skills could they bring to the table? What would the benefits be for your organisation and for the stakeholder respectively? • Are there particular opportunities for your organisation to improve stakeholder engagement in less developed countries? In established markets?

39. Life Cycle Management Training - Outline • Introduction to LCM • First session • How LCM is used in Practice • Second session • Communicating LCM Results • Third session • LCM and Stakeholder Expectations • This Session!