Integrating Stakeholder Mapping and Analysis

A PRIMA engagement may optionally provide for incorporation of stakeholder risk and opportunity measures and initiatives into a financial analysis or risk modeling platform—such as the IFC’s “FVTool”, the IFC’s Integrating Sustainability Dashboard (being developed by PRIMA under contract to the IFC), or the client’s existing platform—to explicitly link stakeholder mapping and analysis results with a range of organizational performance indicators (e.g., cash flow projections). The methodology allows managers to answer questions such as the following.

  1. What is the optimal portfolio of stakeholder engagement initiatives after accounting for:
    • The extent to which individual initiatives improve the social license to operate?
    • The initiatives’ financial costs and benefits?
    • The initiatives’ impact on the attainment of other operational objectives?
  2. When is the optimal time to incur costs associated with stakeholder engagement initiatives?

The process begins with an analysis of historical financial and operational performance data to identify discrepancies between stakeholder engagement initiative projections and outcomes, as well as differences with other client projects and (where possible) these of competitors. Examples of cost and revenue categories include the following

  • Current and future operating costs, including those associated with staffing, capital investments, and raw materials
  • Fixed costs
  • Revenue lost or gained due to:
    • Lesser or grater consumer willingness-to-pay
    • Production stoppages or delays (accelerations in the timeline)
    • Ease of entry into markets due to government policies adopted in response to opponent or supporter pressure
  • Staffing expenses, including:
    • Managers to oversee engagements after a conflict
    • Engineers to redesign controversial plans, and government affairs or regulatory staff to re-permit revised plans
    • Security
    • Lawyers and lobbyists to provide representation in proceedings or investigations

Larger training, recruitment, and retention costs at conflict-prone sites

  • Insurance, risk management, and compliance expenses, including fines and penalties
  • Repairs to plants, property, equipment damaged during conflicts
  • Higher public relations costs stemming from particular disputes

The impact of reduced conflict and increased cooperation with stakeholders on costs and revenues must be estimated probabilistically by those with responsibility for the relevant operational area. The assembly of a cross-functional team within the client organization is necessary to support the integration initiative.