Affecting communities

Affecting Communities – Impact Analysis 

A company’s sustainability reporting aims to fulfill several objectives. One of these concerns the company’s relationship with the community. A company’s presence in a particular region can have both benefits and disadvantages for communities. From the perspective of voluntary standards, but also of the new legislation on corporate sustainability reporting, it is of greater interest if and in what way the presence of the company affects the companies in the areas where it operates. Moreover, this reasoning must always be the basis of the CSR planning and programs that most companies run. 

When we talk about the impact on communities, we must take into account both the effects of the company’s presence, such as for example the effect produced by the entry of large supermarket chains into the Romanian market on small neighborhood stores, but also the most important impacts directly related to the activities, the company’s products or services, as well as those resulting from its business relationships. 

To exemplify in this case too, we can think of the impact that oil and gas companies have, which affect the communities in which they operate through air pollution or through the noise produced by the means that transport various machines to the production areas and which transit several localities. If, in the presented example, air pollution is a direct consequence of the company’s activities, the noise pollution produced by the means of transport could be an indirect impact related to the company’s business relations, if that activity were outsourced to other transport companies. 

Affecting communities

Therefore, the first step a company should take is to understand how it affects or can affect communities, which are the areas where these impacts occur or are most likely to occur, and the magnitude of them. 

 It is obvious that determining the type of impacts, including whether they are positive or negative, as well as their severity is part of a complex process that must take into account as many points of view as possible. 

 If we approach these impacts only from the perspective of the company, without involving the other stakeholders, it is very possible that the impacts we will capture will not be complete and perhaps not even correct. For this reason, the register of interested parties, which any company holding a quality management certification should have, is an essential element in this process. Knowing those people, groups of people or organizations that are affected or can be affected, directly or indirectly by the company, will always bring an element that will contribute to the correctness of an impact analysis. 

 Once the impacts are identified, the company must prepare an action plan aimed at preventing, mitigating or remedying the actual or potential negative effects. 

 Impact analysis is also an important element through which companies can identify the Sustainable Development Goals (SDGs) to which they can contribute. Internationally, many companies have chosen this approach, such as ENI. Thus, according to the information they publish in the voluntary sustainability report ENI for 2021 A Just Transition, they prefer, when opening operations in other regions, to initially carry out an analysis of the socio-economic context, which accompanies all stages of the design of business, allowing them to understand local needs and therefore define priority sectors for intervention. These priorities are integrated in the form of objectives in the four-year strategic plan, which aim to directly or indirectly contribute to the achievement of the SDGs. 

 In Romania, several companies have started to include in their sustainability reports the SDGs that they have identified following materiality analyses, objectives to which these companies can contribute. For exemple, OMV Petrom in 2020 Sustainability Report  it presents both the SDGs to which the company contributes and related targets, alongside material sustainability aspects. Each material aspect is correlated with one of the priority areas of the Group’s sustainability strategy. Instead, the ALRO Group has chosen to present this information in detail both in its annual sustainability reports and in the Sustainability Strategy for the period 2021-2025. In the sustainability reports, the Group presents the progress of meeting these objectives and the main actions implemented. 

 Institutions with responsibilities in the field of sustainable development should encourage the reporting of such information and support companies to comply with specific legislation that contains clear provisions on identifying the impacts they have on the environment and people. 

 Want to find out more about this subject, write us at news@sustainabilitylens.com

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