For industries from apparel to mining to agriculture, the worst supply chain disruptions often follow this trajectory: unnoticed community concerns, protests, strikes, halted operations, and revenue loss. While these events appear to be unique each time, the root cause lies in relationships with the local communities.
Corporations whose operations depend on engagement with communities should develop strategic community-engagement plans that account for operational demands, communities’ expectations and needs, and local context. Companies can enhance their community relationships by adopting the following four strategies:
1. Engage the community in a participatory process. Decisions about community engagement, contributions, and monitoring often take place in boardrooms far removed from the communities themselves. By involving community members in the process, companies can ensure ongoing communication and a positive, stable relationship. An effective strategy requires listening to stakeholder perspectives and priorities, asking for feedback, participating in face-to-face meetings that build trust, and implementing a mechanism for raising concerns and complaints. Anglo American, for example, has a "Socio-Economic Assessment Toolbox (SEAT)" to assess, prioritize, and guide the development of management responses to socioeconomic impacts throughout the lifecycle of each project. Each operation conducts the SEAT process every three years to ensure input from the community and improve the operation’s social performance.
2. Keep communication ongoing and consistent. As Freeport McMoRan Director of Social Responsibility and Development Tracy Bame noted in a BSR Conference 2014 panel, “With engagement, you cannot stop for a single second.” Freeport’s community-engagement teams in Chile have established one- and five-year plans for maintaining healthy community relationships through roundtables, one-on-one meetings, grievance mechanisms, open houses, and more. These two-way communication channels are critical for the company to both inform the communities as well as listen to their concerns and ideas. Communities need to be aware of company decisions and the rationale behind them, and their input should be incorporated into decision-making. Communication should be easily digestible and use straightforward, simple language that everyone can understand through local idioms, relatable stories, and examples.
3. Focus on strategic investments linked to the core business and shaped by the community. Companies traditionally have made donations to local sports leagues, food banks, or educational organizations to gain a social license to operate. But a more effective approach incorporates the communities’ input on initiatives that will help sustain communities over the long term. These investments might be focused on socioeconomic development, job creation, job training, education, health, and more. For instance, Stora Enso, a global paper and packaging company, launched a water-management project in Guangxi, China, that involved stakeholder surveys, training, local partners, and employment opportunities. This brought "together the competencies of two leading companies and the knowledge of the local community to create the best possible water solutions,” as Stora Enso’s former CEO Jouko Karvinen explained on launching the project.
4. Develop relationships with community leaders. Companies can begin to build trust by developing relationships with community leaders, respected social and environmental organizations, health and education leaders, youth leaders, and role models. Getting the blessing of both formal and informal leaders can ease conversations with much larger groups within the community, and this inclusion and engagement of the broader community is essential. Relationships with leaders can also help company decisionmakers comprehend community culture, dynamics, expectations, and behavior.
Developing community relationships takes time. As Phil Berry, Stora Enso’s sustainability director, said at the same BSR Conference panel, “Poverty drives conflict, [so] often, conflict is unavoidable. [Companies] should plan for it, budget for it, staff for it.” As inequalities grow, organizations must be prepared for and expect long-term engagement to drive the greatest impact.