How to build sustainable communities and engage stakeholders?

What are the major issues regarding CSR and sustainability in Luxembourg, and what specific obstacles do the country’s economic players face when they seek to establish sustainable communities? In this interview, Laetitia Georgel and Sophie Öberg from IMS Luxembourg tell us about the involvement of Luxembourg companies in the field of corporate social responsibility and sustainability, and offer five practical tips for building sustainable communities.

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1. How can Luxembourg companies meaningfully involve stakeholders in their ESG initiatives?

Stakeholders - which refers to all individuals or groups that may affect or be affected by an organisation’s activities - can be involved in multiple ways, depending on the nature and strategic importance of these activities to the organisation. Because what lies at the heart of a CSR (Corporate Social Responsibility) approach is an organisation’s responsibility to act in the interests of its specific stakeholders, and not of stakeholders in general, and to consider how these stakeholders in turn impact the organisation environmentally, socially and economically. Stakeholders can be both internal (e.g. employees, works councils, shareholders/investors) and external (e.g. customers, suppliers, distributors, partners, local communities, NGOs/associations, governments/regulators, banks, media). Once stakeholders have been identified by the organisation, they are prioritised according to their strategic importance to the organisation, which then determines the appropriate consultation method, level and frequency of involvement, ranging from simple top-down information to one-on-one interviews, such as consultation forms, focus groups, public consultations or local meetings.

2. What are the best ways for Luxembourg companies to promote sustainability within their local communities?

The most effective and rational way to promote sustainability in your local community is to know your stakeholders and involve them. By doing so, the company will align itself with the needs, interests and expectations of its stakeholders while gathering information that is extremely useful for the conduct of its business. The company’s engagement with its stakeholders is therefore an essential source of opportunities, risk management and optimised decision-making, enabling it to improve overall performance while being responsible and sustainable. Finally, this commitment fosters transparency and collaboration; it also strengthens credibility, legitimacy and trust in the company within its local community.

3. How can NGOs work effectively with companies to strengthen stakeholder engagement in Luxembourg?

Non-profit organisations that are of public interest and do not fall within the remit of the State or an international institution, non-governmental organisations (NGOs) are a key player in civil society and will therefore, in the vast majority of cases, be among the stakeholders considered by a company. Depending on the sector of activity and the company’s strategic direction, NGOs have varying degrees of strategic importance (e.g. an environmental NGO for a fossil fuel company; a human rights NGO for a textile company; a social and solidarity NGO for a catering company).

They can make a concrete commitment to companies either as a point of contact and a source of proposals within the framework of dialogue with the company, or within the framework of partnerships such as integration (integrating people excluded from employment via the company), skills sponsorship (benefiting from skills that are not available internally thanks to the commitment of company volunteers), responsible purchasing (offering an alternative to traditional corporate purchases), transfer of expertise (sharing expertise with a company that wants to include the issues addressed by the NGO in its strategy) or volunteering (hosting a team of volunteers in the field for a public service mission).

4. What are the unique challenges facing Luxembourg’s economic players as they seek to create sustainable communities, and what innovative solutions can they adopt to address them?

The challenges that economic players face when seeking to create sustainable communities are very similar to the challenges identified for the country as a whole, given the impact that these challenges have on the stakeholders who make up these communities. The most significant challenges include major demographic growth (+60% since the 2000s), leading in particular to major challenges in terms of spatial planning (traffic, housing, etc.) and very strong pressure on the environment (resources, climate, etc.); an extremely diverse population (170 different nationalities) and changing social cohesion (47,5% of the population is not of Luxembourg nationality; only 27% of jobs are held by Luxembourgers; more than 200.000 cross-border workers per day; an ageing population, with the number of people aged over 80 increasing almost threefold by 2050), leading, among other things, to challenges in cross-border cooperation, intercultural and intergenerational communication, inclusion and diversity.

To address this, economic players benefit from setting up consultations and discussions with their stakeholders as described above in order to work together to identify winning solutions for everyone. The development of sustainable communities is indeed a shared responsibility, requiring collaboration between sectors, industries and all stakeholders for the common good.

5. What are your five practical tips for our readers who want to help build sustainable communities?

Identify the stakeholders specific to its internal and external organisation.
Prioritise and map its stakeholders according to their strategic importance, connections and dependencies.
Select the most appropriate methods of consultation.
Assess and adjust its stakeholders regularly, responsibly, transparently and respectfully, in accordance with the principle of continuous improvement.
Use standards and tools such as the ISO 26000 standard, the ESR label, B Corp certification and the Sustainable Development Goals (SDGs).

About the blog:

There is an urgent need for rapid transition to global sustainability. Business and industry have enormous social and environmental impacts. "Why does it matter?" is a bi-monthly blog that aims to elucidate this important topic through the eyes of our experts.

Don't miss out our experts' practical tips for your daily life and be part of the positive change.

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How to build sustainable communities and engage stakeholders?

1. How can Luxembourg companies meaningfully involve stakeholders in their ESG initiatives?

2. What are the best ways for Luxembourg companies to promote sustainability within their local communities?

3. How can NGOs work effectively with companies to strengthen stakeholder engagement in Luxembourg?

4. What are the unique challenges facing Luxembourg’s economic players as they seek to create sustainable communities, and what innovative solutions can they adopt to address them?

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