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
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/