Key finding

Housing and urban service providers are not engaging their key stakeholders: residents and local communities

The biggest urban companies providing housing and key services in 43 megacities – home to over 692 million people – often overlook the very stakeholders most affected by their activities. Over half fail to report any engagement with affected stakeholders. In fact, fewer than 40% of the companies recognise local communities as key stakeholders; only 5% identify tenants or residents as key stakeholders and none acknowledge residents of informal settlements, though this population surpasses 1 billion globally. Moreover, many companies only use one-way communication methods, such as social media and newsletters. With the increasing influence of the private sector in local planning and urban policymaking, this trend brings the risk of exacerbating power imbalances and systemic inequalities. Communities may find themselves marginalised by corporate decisions that profoundly shape their lives and environments. There are no two ways about it – companies must proactively identify, engage with and receive feedback from all affected urban stakeholders, especially the most vulnerable ones.

Housing and urban service providers are overlooking their key stakeholders residents and local communities 

Authors: Tingshao Wei and Sibora Dhima 

Over the last decades, urban governance has undergone a significant transformation — from a government-led approach to one that increasingly incorporates a multistakeholder model. Local governments have evolved from primary decision-makers and service providers to acting as facilitators of development through partnerships. In this emerging landscape, the private sector has gained considerable influence in urban development. In the energy sector, for example, 29% of electricity distribution utilities globally are owned by private companies, with the vast majority of these private entities concentrated almost entirely in middle- and high-income economies (World Bank, 2018). Companies increasingly shape critical aspects of urban life — from transport, construction and real estate to waste management, energy and water distribution. With this comes greater responsibility towards the millions of urban residents affected by corporate decisions. 

This multistakeholder model creates accountability challenges. Without effective engagement mechanisms, communities risk being marginalised by decisions that profoundly shape their living environments, potentially deepening inequalities. Several international frameworks emphasise stakeholder engagement as a core element of responsible business, particularly in materiality assessment, due diligence and project development. However, as many of these standards remain voluntary, a significant gap persists between guidance and real-world practice. The 2024 Urban Benchmark highlights this gap, revealing widespread shortcomings in stakeholder engagement across the 300 influential urban companies providing housing, transport and utility services in 43 megacities housing over 692 million people

Corporate failure to engage vulnerable communities undermines SDG 11 and jeopardises over a billion people

Identifying relevant stakeholders is the first step to stakeholder engagement. While established reporting standards such as GRI and SES require companies to disclose the categories of stakeholders they engage with or profile and map stakeholders (GRI, 2021; AccountAbility, 2015), only 46% of the companies in the benchmark reported conducting some form of stakeholder engagement. 

Companies are missing the opportunity for meaningful dialogue

Even in cases where companies identified stakeholders, not all disclosed their engagement channels and frequency. Specifically, only 41% disclosed their engagement channels and a mere 12% specified the frequency of these engagements. 

Listening is not enough — Too few companies show how stakeholder voices shape their decisions

The Integrated Reporting Framework asks companies to understand, take into account and respond to the stakeholders’ needs and interests (IIRC, 2013). While nearly 30% of the companies provided some disclosure on topics and concerns raised, only three companies (1%) disclosed specific concerns raised by each stakeholder group in their latest reports.

How companies should improve stakeholder engagement

A roadmap to coherent and transparent stakeholder engagement should begin with comprehensive stakeholder mapping that clearly outlines the identification process and includes all affected groups especially residents, tenants, local communities, and vulnerable, marginalised and at-risk stakeholders, such as informal settlement residents directly impacted by operations and projects.

​​Bibliography 

AccountAbility. (2015). AA1000 AccountAbility Stakeholder Engagement 2015. Retrieved from AccountAbility: https://www.accountability.org/standards-entries/aa1000-accountability-stakeholder-engagement-2015-english 

GRI. (2021). GRI 2: General Disclosures 2021. Retrieved from Global Reporting Initiative: https://www.globalreporting.org/publications/documents/english/gri-2-general-disclosures-2021/ 

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