Director of Capacity Building and Standards
Research has proven that when focusing on locational investments, community engagement can improve both sides of the equation. Engaging with the community means directing better outcomes for people and places while also improving the financial performance.
There are plenty of tools and resources about how to do high quality community engagement, and lots of materials about impact investing, but we found there was little that married the two.
Our Investor guide for engaging communities in place-based impact investing helps investors in a practical way to engage with communities for meaningful impact in place-based investing. We collaborated with the Impact Investing Institute to research, hold focus groups, find examples, and talk to communities. It was important to us that the guide worked for investors and reflected their needs, so we worked with them throughout this process.
We used an engagement process to base our guide on real-life community engagement. We called it 'Community Cuppas'. We spoke to communities across the North of Tyne region to get their input on when in the investment journey investors should engage with them about place-based investments. You can find out more about this process here.
Here, we lay out some of the key learnings from our guide, so that investors can build trust, deepen local impact and improve financial performance by building partnerships with communities.
Where to start with community engagement
Through our experience, we know every project is different and community engagement doesn’t need to be all encompassing. When thinking about doing community engagement, you should make sure the engagement is appropriate for the scale and type of investment you are making.
Our guide teaches practical ways to help choose the right level and type of involvement for your investment. It shows how to plan using questions to ask yourself, checklists and principles that should underpin your engagement.
What role should I play? How much involvement do I need to commit?
As an investor, you don’t have to do everything yourself. In some cases, it might not be appropriate to do so. The best role for you will depend on various things such as: the purpose and goal of the engagement, your business model and asset class, and the type of investor you are (for example, whether you are the asset owner or asset manager).
You also need to think about what level of decision-making you have, as well as your skills and capacity.
You could choose to have a more direct role by asking the community to feed into your place-based impact investing strategy. Or, you may choose a less direct role by creating a stewardship or assurance relationship with your asset managers working on the ground.
When should the community get involved?
When it comes to deciding when the community should get involved, the answer is: at various stages, from planning to carrying out the investment.
When involved at the start, investors can identify community wishes and needs early and continue to get feedback from the community as plans develop.
Who in the community should be involved?
Engagement should include a representative sample of the community and specific groups who would be differently affected by an investment. It should also involve less-heard groups.
Research shows that diverse representation gives investors an idea of what not just what the majority thinks but can show the whole landscape of concerns. Specific groups may offer specialist knowledge and it’s important to have a wide range of views, however those most affected by decisions should have their say.
What else should I know?
Seeking input after decisions are made or lacking clarity on how to utilise engagement outcomes are some of the most common mistakes we heard about in our research. Here are the six most common mistakes we identified:
1. You are asking for input on something for which a decision has already been made.
2. You don’t know what you will do with the outputs of an engagement process.
3. There is not sufficient time or resource allocated to allow for meaningful engagement.
4. The outcomes of the engagement process are not fed back to the participants
5. Waiting for a crisis to arise before doing community engagement.
6. Organisational arrangements to support community engagement are not in place or insufficient.
You can read more about these easy to avoid errors on page 42 of our guide.
Important affirmations before you start!
1. You can set the boundaries: it’s okay for everything to not be on the table.
When you are honest and explain to the communities you are engaging with what is out of scope and why, they tend to understand. You don't want to over-promise and ask for input on something that you know is non-negotiable or has already been decided. The purpose and goal of your engagement comes first. Think about the purpose and goal of your engagement first – you don’t need to ask communities about the technical detail of an asset for example, but you might want them to set the principles for investments, what asset class of investment a community needs, or where a certain investment initiative should be located.
2. You don’t need to start from scratch.
Work with others on a place-based level. Link up with the local authority, or community and voluntary organisations. Not only can these organisations help reach out to members of the community as a trusted voice, but they might have also done previous engagement that you can draw on.
If community members or groups have already shared their needs, preferences, and aspirations before, you don’t want to be asking them the same question again. This is how to avoid what we call consultant fatigue. More about that along with a list of expert organisations who specialise in community engagement is outlined in our guide.
3. Good community engagement takes time and resources: but it can save you both in the long run.
Don’t underestimate how long it takes to do meaningful community engagement. It can be hard to plan this into your timeline, when you have deadlines and quick deployment.
However, a small investment in community engagement – usually a fraction of the overall budget – can ultimately outweigh its costs.
Engagement can help you get the process right the first time, avoiding negative long-term consequences, such as community backlash.
Meaningful community engagement can also contribute to the overall asset performance. We highlight a real-world example of this in our guide with Legal & General Investment Management Real Assets (L&G, more on page 15 of our guide). They saw a significant increase in footfall and consumer spend when they engaged with the community and converted a traditional shopping centre in Poole to a multi-use community centre.
Before you go:
Community engagement can feel overwhelming for investors who haven’t done it before. You might be afraid of how the community will react or doubt your expertise and time to do it well. The important thing is clarity. Be clear on what you need community input on, why and what you will do with the outputs of the engagement process. Talk to the community on what you have done, what you haven’t done, and why. If you get this right, then you are likely to see the positive results of your engagement.
Engagement shouldn’t be a one-off, box-ticking exercise, but something that is embedded into your work.
This may resemble thinking about how to empower communities over time. Consider how you can help communities to have more influence on decisions that affect them. This can be done by building local capacity and creating opportunities for involvement.
Ultimately, community engagement should be reciprocal – you should see community engagement as a two-way process. Meaningful community engagement offers you the opportunity to build mutually beneficial relationships that both strengthen your investments and the places that you’re going into.
Find out more:
If you are an investor and this sounds interesting to you, download the Investor guide for engaging communities in place-based impact investing here
We collaborated to research, hold focus groups, find examples, and talk to communities. It was important to us that the guide worked for investors and reflected their needs, so we worked with them throughout this process.
If you have any questions or want to find out more, you can contact Carly Walker-Dawson at [email protected].