Stakeholder Engagement in Achieving ESG Goals

Namhla Saba

15 years: Chartered Accountant & ESG Specialist

In this video, Namhla explains how Fairmount Minerals Limited (now Fairmount Santrol) successfully integrated sustainable development and stakeholder engagement into their business. She highlights the financial and reputational benefits, including cost savings, improved employee health, new market opportunities, and innovative products. She further covers the importance of stakeholder engagement in achieving ESG goals and the role of double materiality assessments.

Corporate Governance

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Stakeholder Engagement in Achieving ESG Goals

10 mins 20 secs

Key learning objectives:

Identify benefits of integrating sustainability at Fairmount Minerals
Identify Fairmount’s benefits from integrating stakeholder feedback
Understand the role of stakeholder engagement in effective ESG strategy design and reporting
Outline steps in double materiality for effective ESG strategies

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Summary

What are the benefits of integrating sustainability at Fairmount Minerals?

Fairmount Minerals Limited, now known as Fairmount Central, integrated sustainable development initiatives into their corporate governance, culture, and leadership as early as 2006. This integration yielded significant benefits, such as saving $350,000 in packaging costs annually and reducing healthcare costs by fostering a healthier workforce. The organisation spent $680,000 on sustainability programmes and received $2.6 million in benefits. Former CEO Chuck Fowler highlighted that sustainability had unlocked numerous opportunities for Fairmount, emphasising the importance of listening to stakeholders and using social and environmental thinking to drive corporate strategy.

How did Fairmount benefit from integrating stakeholder feedback?

Fairmount's journey with sustainability began in 2005 after engaging with internal stakeholders at an employee summit. Following this, they joined the UN Global Compact in 2006 and created 14 sustainability development teams. By engaging both internal and external stakeholders, Fairmount continuously incorporated feedback into their strategies, business processes, and product development. This inclusive engagement led to:

New Markets - Trust from stakeholders helped secure new operating licences
Reputation - Improved market reputation and several sustainability awards opened new opportunities
Employee Engagement - Boosted employee loyalty and productivity, with 87% of employees contributing to volunteer causes
Innovation - Development of new biodegradable agents, signature gold products, and odour reduction technology

What is the role of stakeholder engagement in effective ESG strategy design and reporting?

With the growth in ESG standardisation and regulatory requirements, effective ESG strategies must be designed and implemented with stakeholder engagement at the core. Stakeholder engagement is critical for understanding the impact of business operations on the environment and society, and for reporting to material stakeholders. The process of assessing double materiality helps organisations identify key ESG topics, enabling them to focus resources on relevant issues. This ensures that both financial and social/environmental impacts are managed, ultimately benefiting the organisation and its stakeholders.

What are the steps in double materiality for effective ESG strategies?

Assessing double materiality involves four main steps:

Identify and Engage Stakeholders - Conduct a stakeholder mapping exercise to ensure all affected parties are considered, both internal and external.
Draw Up a List of Potentially Relevant Sustainability Matters - Identify sustainability issues specific to the entity based on stakeholder engagements.
Define and Assess Impact Risks and Opportunities - Evaluate the critical sustainability issues according to their effects and risks for the organisation.
Measure and Disclose the Impacts - Organisations must disclose the measures they are taking to manage the identified environmental and social impacts, including metrics, targets, policies, and action plans.

By following these steps, organisations can effectively manage the most pressing ESG risks and opportunities, ensuring sustainable business practices that benefit both the company and its stakeholders.

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Namhla Saba

Namhla Saba, Founder and Director of a firm advising corporations, funds, and NPOs on ESG and social development, has over 15 years of experience in social and governance issues across sectors like financial services, mining, and infrastructure. She leads community stakeholder engagement projects for clients seeking to maintain their "social license to operate" in developing markets like South Africa, bridging relational and information gaps between corporations, employees, customers, and communities.

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