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The Selangor State Agricultural Development Corporation (PKPS) faced significant reputational risks due to activities involving peat swamp forest clearing for agricultural development. The deforestation caused by these activities attracted severe criticism from environmental NGOs and raised concerns among critical stakeholders and supply chain partners. The company’s deforestation practices were not aligned with globally recognised sustainability standards, jeopardising PKPS’s reputation and business relationships. This also extended to the subcontractors involved which were central to the controversy.
We were engaged to help a land clearing company manage and mitigate the reputational crisis it faced due to its involvement in the deforestation activities. First, we thoroughly assessed the client’s activities, identifying areas of non-compliance with sustainable practices. We developed a mitigation plan that included immediate cessation of ongoing deforestation and the initiation of reforestation projects to restore affected areas, demonstrating a commitment to environmental stewardship.
To improve transparency and communication, we advised the client to issue public statements acknowledging the issues and outlining their unwavering commitment to sustainable land-clearing practices. These communications were disseminated through press releases, social media and their corporate website, ensuring broad reach.
We recommended enhancing their sustainability policies and practices by adopting stricter oversight mechanisms and aligning operations with globally recognised sustainability standards such as the Roundtable on Sustainable Palm Oil (RSPO). Workshops and training sessions were facilitated for their staff to ensure understanding and compliance with these standards.
Additionally, we proposed a stakeholder engagement strategy to rebuild relationships with key partners, including NGOs, customers and supply chain partners. Regular meetings and updates were scheduled to keep stakeholders informed about the mitigation efforts’ progress and demonstrate transparency and accountability.
Our strategic approach to managing the land clearing company’s reputational risk involved immediate action to halt damaging practices, transparent communication to rebuild trust and long-term commitments to sustainability. Through these efforts, we helped the client mitigate reputational damage and reposition itself as a responsible and environmentally conscious entity. This case underscores the importance of proactive and transparent risk management strategies in maintaining corporate reputation in the agricultural sector.
For more information on Sapien Advisory’s reputation and strategic management services or to book a consultation, please reach out to our team at info@sapienadvisory.com
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