SPG's work with private sector actors in emerging markets typically consists of three key elements: Due Diligence & Risk Assessment; Strategic Stakeholder Engagement; and Conflict Sensitive Business Practices. The goal is to enable successful, responsible, and sustainable investments and business operations in complex environments.
Due Diligence & Risk Assessment
- The due diligence and risk assessment process is aimed at establishing a sound knowledge and understanding of how the business affects and is affected by the political and social dynamics and potential tensions in countries where the business operations are planned or on-going. It assesses potential social- and human rights related challenges associated with business operations.
- A key question to ask is whether company’s structures, capabilities and processes are geared towards successfully meeting these challenges and utilizing opportunities.
- The assessment should build on a thorough understanding of local needs, concerns and the impacts of company activities; as well as an analysis of legal and institutional frameworks.
- The assessment process provides a strategic awareness of the concerns of key stakeholders and of the context in which operations take place. This enables management to anticipate and manage commercial risks and opportunities in complex and unstable environments.
Strategic Stakeholder Engagement
- Strategic stakeholder engagement entails identifying, engaging and establishing and maintaining constructive partnerships with key stakeholder groups at various levels, including local communities and groups affected by company operations.
- This helps a company identify opportunities to create shared value in countries and communities where operations are taking place, providing a real stake in the company’s success.
- Strong stakeholder relationships at local level helps to formulate and implement sustainable and conflict sensitive business practices, tailored to the specific contexts in which a company is active and sensitive to the needs and concerns of local communities.
Conflict Sensitive Business Practices
- Conflict sensitive business practices can be built on the results of the risk assessments and be further informed and shaped through dialogue with key stakeholders.
- The concept entails the use of business approaches that ensure that operations do not cause or aggravate conflict, but rather, where it is possible, to promote a peaceful and stable development in countries of operation.
For further reading on our approach to private sector engagement in complex markets, see the book Management in Complex Environments: Questions for Leaders.