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.

This means over half failed to report any engagement with affected stakeholders at all. Meanwhile, only 22% identified more than four societal stakeholders, which is a low threshold considering the diverse range of stakeholders that large–scale urban companies interact with and affect.

Built environment sectors (architecture consultancies, construction and real estate companies) perform slightly better with 48% of the companies identifying local communities as stakeholders, compared to just 29% of service providers (transport, waste, water and energy). This disparity stems both from built environment sectors’ more visible physical presence and the corresponding regulatory requirements for community buy-in, as well as from the prevalence of state-owned enterprises among service providers, which may face less stringent requirements on disclosing their engagement practices.

Only 5% of the companies — exclusively from the real estate and transport sectors—identified tenants or residents as key urban stakeholders, with none from the architecture or construction industries. Yet, architecture and construction firms significantly shape the lived experiences of current and future residents in the areas they help develop. While direct engagement with future residents may be complex, companies should incorporate community perspectives by consulting proxy stakeholders and, most importantly, by involving neighbouring residents who are directly impacted by the development.

Concerningly, not a single company acknowledged residents of informal settlements as stakeholders, despite this population exceeding 1 billion globally. These are communities who are most significantly impacted and are most vulnerable to urban development decisions, particularly in low- and middle-income countries (LMICs). Failure to engage with them pose significant risks, including human rights violations such as forced evictions. This undermines several sustainable development goals (SDGs), particularly SDG 11 which seeks to make cities inclusive, safe, resilient and sustainable. Without meaningful consultation and inclusion, companies perpetuate cycles of poverty and marginalisation, worsening conditions for already underserved populations.

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.

The AA1000 Social and Environmental Standard (SES) categorises engagement approaches into three levels: one-way communication, limited two-way engagement, and two-way or multi-way engagement, with the later allowing for productive engagement through stakeholder feedback. Most of the companies in the benchmark rely primarily on one-way communication methods like social media, emails, newsletters, websites and hotlines — approaches more likely to be used for marketing or customer information rather than fostering genuine dialogue and meaningful participation.

Some companies demonstrate two-way or multi-way engagement practices by organising consultation meetings with local communities and governments or setting up focus group discussions with academia, civil society organisations and regulators. Transport for London exemplifies this approach through its Independent Disability Advisory Group — a panel of ten members appointed for their lived experience of disability and expertise on barriers to accessing public transport. This group provides strategic and practical recommendations based on inclusive best practices and illustrates how companies can institutionalise stakeholder engagement. However, these more substantive engagement approaches remain the exception rather than the norm, and represent a missed opportunity, as two-way and multi-way engagement creates conditions for building trust, developing social consensus and enhancing project sustainability through more inclusive decision-making processes reflecting diverse stakeholder perspectives and needs.

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.

This lack of qualitative reporting makes it impossible to track whether companies are responding appropriately to stakeholder needs or conducting engagement merely as a checkbox exercise.

Both the GRI and SES frameworks mention the importance of reporting how companies address potential barriers and risks such as language and cultural differences, gender and power imbalances, divisions within communities and technical access barriers. Only one company — Macrotech Developers — provided relevant disclosure on engagement obstacles. The company identified potential risks, such as participation fatigue, conflicts of interest, disruptive stakeholders and unwillingness to engage. It also reported undertaking proper planning to understand stakeholder profiles, facilitating open conversations, periodically assessing stakeholder capacity before selecting engagement methods and developing approaches for stakeholders lacking capacity to engage effectively. Regardless, without transparent reporting of how stakeholder input influences corporate decisions, the entire engagement process risks becoming a performative exercise rather than a meaningful mechanism for accountability.

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.

Companies should move beyond one-way communication towards multistakeholder initiatives and collaborative platforms that enable genuine dialogue and influence decision-making. To build trust and accountability, companies must document and disclose specific concerns raised by each stakeholder group, along with clear responses and actions taken. It is also essential that they identify and address potential barriers and risks to engagement as these shape the effectiveness of the process.

Effective stakeholder engagement is not merely a compliance exercise but an essential practice for ensuring urban development truly serves the needs of all residents. Beyond ethical considerations, meaningful engagement builds community trust, enhances service design through local knowledge integration and strengthens resilience during urban challenges. Companies that authentically engage with their stakeholders develop more sustainable business models that create long-term value both for their operations and the stakeholders they serve, serving as a crucial step towards more equitable, resilient and sustainable urban futures.

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/

IIRC. (2013). Integrated Reporting Framework Downloads. Retrieved from International Integrated Reporting Council (IIRC): https://integratedreporting.ifrs.org/international-framework-downloads/

World Bank. (2018, May 03). Private versus public electricity distribution utilities: Are outcomes different for end-users? Retrieved from World Bank Blogs: https://blogs.worldbank.org/en/developmenttalk/private-versus-public-electricity-distribution-utilities-are-outcomes-different-end-users

Key finding

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

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

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

Companies are missing the opportunity for meaningful dialogue

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

How companies should improve stakeholder engagement

Bibliography

Next finding

With fewer than 6% of urban companies having set science-based targets to lower greenhouse gas emissions, cities’ net-zero goals are at risk

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

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

Companies are missing the opportunity for meaningful dialogue

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

How companies should improve stakeholder engagement

​​Bibliography

With fewer than 6% of urban companies having set science-based targets to lower greenhouse gas emissions, cities’ net-zero goals are at risk

Bibliography