Climate change is one of the most challenging phenomena of the 21st century, requiring multidimensional attention from diverse stakeholders. Stakeholders, including investors, employees, and consumers, are becoming increasingly aware of companies' sustainability practices. Organisations are continuously formulating sustainability strategies for combating climate change. However, it is equally important for an organisation's ability to communicate that strategy effectively. The main dilemma associated with stakeholder communication exists in recognising when and how to disseminate information on sustainability efforts. There are various ways in which organisations can involve different stakeholders in their sustainability steps. Some companies can choose to declare environmentally friendly actions at last when all results have been achieved; others involve their investors, consumers, and shareholders in every step of their sustainability journey. Nevertheless, in the corporate sector, the trend of stakeholder engagement is shifting towards transparency and openness, driven by either legal requirements or the need for competitive differentiation. This article will shed light on the importance of stakeholder engagement in environmentally friendly efforts by organisations along with their sustainability communication strategies [1], [2].

Understanding Stakeholder Communication in the Context of Climate Change

What is Stakeholder Communication?

Stakeholders are the people or groups that are impacted by, have an influence on, or possess an interest in the organisation. Stakeholder communication is a systemic approach utilised by an organisation to disclose relevant data and information to stakeholders. Businesses can not only publish appropriate information but can also find opportunities for engagement with stakeholders. In the past, communication was considered as one way, toggled down from the company to stakeholders; however, in modern times, this communication has become two-way. Now, consumers, investors, and shareholders can also reach an organisation with their questions and feedback. Effective communication is crucial for stakeholder engagement and management, as it allows organisations and stakeholders to exchange information, set expectations, and promote a shared understanding [3].

Why Engage and Communicate on Climate Change?

Developing a well-defined communication strategy is crucial for effectively engaging stakeholders on climate change. Communicating a company's approach to climate change can help differentiate it from the competition and provide opportunities to gain a competitive advantage. Additionally, transparency in addressing climate change can also help build trust with stakeholders and attract socially conscious consumers. For example, many construction companies are demanding pre-qualifications and tenders from firms that address the challenges of climate change as well as other aspects of sustainability, such as the use of embodied carbon materials. Many businesses assess their progress by comparing themselves to their competitors by submitting to third-party sustainability rating systems. Clear communication of businesses' climate change views, strategies, and actions, along with stakeholder engagement, can be a crucial factor in determining companies’ final scores and positions [4].

The Role of Stakeholder Engagement in Sustainability

Successful stakeholder engagement requires recognising all types of stakeholders and comprehending their dissimilarities across various dimensions, especially focusing on those who might be marginalised. Stakeholder mapping allows users to fully comprehend the comparative influence, impact, or other features of multiple stakeholder groups and to prioritise these stakeholders concerning goals and strategies for stakeholder engagement [5].

Types of Stakeholders in Climate Communication

A stakeholder is an individual or group of individuals with some interest, usually financial, in an organisation. Various types of stakeholders have some interest in the success of a business. The following are different categories of important stakeholders for any corporation [6], [7]:

1. Investors

Stake: Financial returns

Investors incorporate both shareholders and creditors. Shareholders contribute capital to the company and anticipate achieving a specific return on that investment. Investors typically focus on the idea of shareholder value. This group also includes various other capital providers, like lenders and prospective buyers. All shareholders are automatically stakeholders, but not all stakeholders are necessarily shareholders.

2. Employees

Stake: Employment income and safety

Employees have a direct stake in the company as they earn an income that supports their livelihoods and receive various benefits that can be both monetary and non-monetary. Depending on the industry, employees may also have specific interests related to health and safety. This is particularly relevant in sectors such as transportation, mining, oil and gas, and construction, where working conditions can significantly impact their well-being.

3. Customers

Stake: Product/service quality and value

A common perspective is that businesses primarily exist to meet the needs of their customers. Customers play a significant role as stakeholders, as they are directly influenced by the quality of the products or services offered and the value they receive in return. For instance, airline passengers place their trust in the company, as their safety and well-being are fundamentally linked to the airline’s performance and reliability during flights.

4. Suppliers and Vendors

Stake: Revenues and safety

Suppliers and vendors provide essential goods and services to businesses, forming a crucial part of their revenue stream and ongoing financial stability. In various industries, the suppliers often find themselves directly integrated into the operations of the company, which can put their health and safety at risk. As a result, the relationship between a business and its suppliers is not only about transactional exchanges but also entails a shared responsibility for maintaining safe working conditions.

5. Communities

Stake: Health, safety, economic development

Communities play a vital role as stakeholders in large businesses within their localities. They are affected by various factors such as job opportunities, economic growth, health, and safety. When a major company moves into or out of a small community, it significantly influences local jobs, income levels, and spending. Moreover, certain industries may impact public health by changing the local environment.

Benefits of Stakeholder Engagement in Climate Strategies

Organisations most likely already engage with certain stakeholders on occasion. However, is it beneficial to invest additional resources into enhancing communication, refining targeting methods, or expanding outreach to a broader group of stakeholders? There are the following  advantages of getting engaged and communicating on climate change [8]:

A. Building Trust

Effective stakeholder communication plays a crucial role in establishing trust between an organisation and its stakeholders, which is essential for fostering strong, mutually beneficial relationships. Regular updates can help illustrate the organisation's transparency regarding projects, plans, and performance. Consistent communication through emails, letters, and other means about sustainability efforts not only promotes openness but also reassures stakeholders that the organisation is committed to fulfilling its promises and addressing any climate concerns they may have.

B. Improving Decision-Making

Regular communication on climate change strategy with stakeholders is crucial for effective decision-making on sustainability matters. Keeping stakeholders informed about climate risks and their mitigating efforts with their feedback genuinely influences the project, especially when they are engaged from the start. If a company limits communication to only a few stakeholders, it risks overlooking valuable insights, potential challenges, and effects on its project's timeline.

C. Ensuring Accountability

Maintaining regular communication on climate risk strategy between an organisation and its stakeholders enhances accountability. This mutual relationship promotes transparency, ensuring the organisation remains true to its sustainability values while also encouraging stakeholders to meet their commitments. For instance, a project manager overseeing a construction project should engage daily with stakeholders through meetings, calls, or messages to monitor progress, remind them of key sustainability steps taken, and ensure the project stays on track.

Strategies for Effective Stakeholder Communication

Businesses can adopt various strategies to effectively engage and communicate with their stakeholders. Below we have briefly outlined the best practical strategies for effective stakeholder communication [4], [9]:

1) Awareness Raising

Raising awareness about climate change is essential for businesses committed to addressing its impact. This involves educating employees and stakeholders about the implications of climate change, the current actions taken by the company, who is responsible for these efforts, and the plans in place. Communications can target internal staff, especially in organisations with various divisions, as well as external stakeholders like suppliers and clients.

2) Email and Newsletter

Email is a widely utilised preferred tool for communicating with stakeholders due to its many advantages. It allows for instant delivery of information, provides proof of sending, facilitates easier management of communications, and enables tracking of engagement. Consider implementing a weekly digest letter to keep stakeholders updated on key climate-related developments. This can encompass budget updates, project photos, weekly news, contact details, upcoming steps, and high-level project plans, among other relevant information.

3) Integrating Climate Data into Communication

Integrating climate data into communication is essential for conveying complex information effectively. Utilising advanced climate analytics platforms enables organisations to present clear, visualised data on climate risks and their potential impact on properties, assets, and operations. These tools transform raw data into actionable insights, making it easier for stakeholders to understand vulnerabilities and mitigation strategies. Moreover, visualised climate data not only enhances transparency but also strengthens stakeholder engagement by demonstrating a commitment to addressing climate challenges with precision and foresight.

Best Practices for Climate Change Communication

Effectively addressing climate change requires clear, engaging communication that resonates with diverse audiences. Following is the step-by-step guide best for formulating and communicating an organisation’s sustainability strategy [2], [8]:

1. Set Clear And Quantifiable Goals

A sustainability strategy should have clear, quantifiable, and time-bound goals, grounded in scientific rigour and evidence. This structure aids internal execution and provides a measurable framework for external stakeholders. For example, Unilever's 2010 'Sustainable Living Plan' exemplifies the importance of clear goal-setting, with a 47% reduction in CO2 emissions from energy per tonne of production by 2023, nearing their set target.

2.Identify Key Stakeholders

Identifying key stakeholders and their sustainability expectations is crucial. Stakeholders can include customers, employees, investors, and the community at large. Understanding their role in promoting sustainable living is also important. For instance, a study by MIT Sloan Management Review found that 88% of executives see stakeholder engagement as vital to their sustainability strategy. Moreover, a PwC survey revealed that 45% of investors want companies to recognise their key societal stakeholders.

3. Choose the Right Channels

Effective stakeholder communication today involves navigating a multitude of available channels, which can overwhelm most organisations due to limited resources. To manage this effectively, it’s crucial to focus on the right channels. During stakeholder analysis, a company shall determine stakeholders' preferred communication platforms, the types of information they expect on each, and their desired frequency of updates.

4. Encourage Feedback

Effective stakeholder communication should encourage feedback by providing multiple contact options (phone, email, in-person, messaging, etc.) and opportunities for participation in the project. This can include sending stakeholder surveys or hosting meetings and focus groups to gather climate-related insights. Engaging with stakeholders helps improve the project and future engagement efforts.

Conclusion

Effective stakeholder communication is an important aspect of organisational sustainability strategy. Communicating on climate change is nowadays a compulsory requirement under various regulatory compliances such as CSRD & TCFD. Effective stakeholder communication and engagement start with setting clear and quantifiable goals. Understanding the stakeholders involved, such as employees, customers, suppliers, and the community at large, is important for sustainability communication. Then comes choosing the right communication channel, such as email, newsletter, and project reports. Finally, taking feedback from stakeholders is necessary for implementing practical climate risk strategies.

How SmartResilience Can Help?

Smart Resilience is a company dedicated to empowering businesses to navigate the challenges of climate change. With a focus on sustainability and long-term progress, we offer tailored solutions to assess and mitigate climate-related risks. Our comprehensive suite of services empowers businesses to combat climate challenges while aligning perfectly with the requirements of the Corporate Sustainability Reporting Directive (CSRD). 

Our comprehensive services include:

• Physical Risk Assessments: SmartResilience conducts in-depth physical risk assessments, for identifying vulnerabilities to extreme weather events and other climate-related hazards. These assessments directly address the CSRD's mandate for climate risk disclosure and potential impacts.

• Scenario Analysis: SmartResilience scenario analysis tools evaluate the impact of diverse climate scenarios on your business operations. By strategically considering various possibilities, you can plan for the future, enhance financial resilience, and align seamlessly with the CSRD's mandate for future-proof planning.

• Risk Management Strategies: SmartResilience goes beyond identification by developing comprehensive and tailored risk management strategies. Our solutions safeguard businesses against climate change impacts, emphasising the CSRD’s call for proactive adaptation measures.

• Ongoing Compliance Support: SmartResilience provides continuous support to ensure your sustainability reporting remains compliant with evolving CSRD requirements. Our services include regular updates to reflect the latest regulations, staff training to maintain expertise, and vigilant monitoring for accurate and up-to-date disclosures.

Partnering for a Sustainable Future: 

The future may be uncertain, but by building resilience together, we can address climate change with confidence and clarity. Contact us today to embark on a journey towards a sustainable future.

References

[1] J. Badu, B. I. Kruke, and G. B. Sætren, “Balancing stakeholder engagement in climate action: A symbiotic typology approach,” Environ. Sci. Policy, vol. 163, p. 103953, Jan. 2025, doi: 10.1016/j.envsci.2024.103953.

[2] T. Bernoville, “Communicating your sustainability strategy: A guide to transparency and responsibility,” Plan A Academy. [Online]. Available: https://plana.earth/academy/communicating-sustainability-strategy-transparency-responsibility

[3] A. Rodgers, “Stakeholder Communication: Benefits, Best Practices, and Management - Simply Stakeholders,” Simply Stakeholders. [Online]. Available: https://simplystakeholders.com/stakeholder-communication/

[4] R. Westaway, “Climate Change and Business: The Importance of Stakeholder Engagement and Communication,” Environment+Energy Leader. [Online]. Available: https://www.environmentenergyleader.com/stories/climate-change-and-business-the-importance-of-stakeholder-engagement-and-communication,39689

[5] UNFCCC, “Identifying and understanding  stakeholders.” United Nations Framework Convention on  Climate Change (UNFCCC), Jan. 01, 2025. [Online]. Available: https://climateactiontransparency.org/wp-content/uploads/2021/07/Stakeholder-Participation-Guide_ch5.pdf

[6] J. Fernando, “What Are Stakeholders? Definition, Types, and Examples,” Investopedia. [Online]. Available: https://www.investopedia.com/terms/s/stakeholder.asp

[7] CFI, “Stakeholder,” Corporate Finance Institute. [Online]. Available: https://corporatefinanceinstitute.com/resources/accounting/stakeholder/

[8] A. Rodgers, “Stakeholder Communication: Benefits, Best Practices, and Management - Simply Stakeholders,” Simply Stakeholders. [Online]. Available: https://simplystakeholders.com/stakeholder-communication/

[9] Kimberley, “Tips For Effective Stakeholder Communication,” Swift Digital. [Online]. Available: https://swiftdigital.com.au/blog/how-to-communicate-with-stakeholders/