Tailoring engagement strategies for different businesses
How to segment and tailor engagement strategies to fit diverse business needs, structures, and motivations
What you can learn from this page
This page demonstrates how local governments can move beyond traditional, transactional relationships with businesses to design tailored engagement strategies for urban climate action. By categorizing businesses across breadth—such as size, industry, regulatory environment, and ownership structure—and depth—identifying entry points from technical leads to C-suite executives—it illustrates how to customize support, incentives, and messaging to match diverse organizational needs.
Moving beyond regulatory and transactional relationships
When getting started on your business engagement plans, it is important to take time to explore the breadth of business types and their needs. Shifting from a traditional, purely transactional relationship with businesses can take time and effort, but yield greater socioeconomic (and climate) benefits in the long-run. Reflecting on the steps below can help ensure you capture the unique needs of your city’s business landscape.
To effectively engage, influence, support and collaborate with local businesses on climate action, it is important to understand their different needs, drivers and powers.
How Businesses Differ
Like cities and local governments, there is no one-size-fits-all approach for businesses. Engagement that effectively integrates climate, energy, and business needs to support action requires tailoring engagement, incentives, and messaging across two dimensions:
1. Breadth (engaging across different organizations)
Formal vs. Informal
Engaging across both formal and informal economic activities—ranging from registered commercial enterprises to informal street trading, open-air markets, transport operators, and waste management workers—is essential for designing inclusive and effective local climate action that reflects the full reality of the urban economy.
Ownership Structure (Public vs. Private vs. Cooperatives)
Publicly traded companies face heavy investor pressure and stringent Environmental, Social, and Governance (ESG) reporting requirements. Privately held or family-owned businesses are driven by long-term legacy and personal values, while cooperatives prioritize community benefits.
Industry
From construction to tourism, food services to private transport, different industries have vastly different drivers, limits and powers when it comes to climate action.
Size/employee count
Large businesses usually have dedicated sustainability teams, larger capital budgets, and formal corporate social responsibility (CSR) programs. Small and Medium Enterprises (SMEs) typically have lean staff, tighter cash flow, and no dedicated sustainability staff.
Geographic Scope
Hyper-local businesses (e.g., local retail, regional suppliers) are deeply tied to the community’s economic health and directly impacted by local climate risks. Multinational corporations answer to global stakeholders and international environmental, social, and governance (ESG) reporting standards.
Regulatory environment
Healthcare and insurance are highly regulated sectors that face different compliance drivers than retail or hospitality. Unregulated or service-based sectors often have more operational agility.
2. Breadth (engaging within an organization)
Technical vs C-suite level
Sustainability directors focus on technical feasibility and operational impact; executive leadership focuses on risk, reputation, and return on investment. Providing clear details/materials that sustainability leads can present to their executive leaders can help to keep things moving and remove the burden from them to translate actions/benefits needed.
Regional/local offices vs corporate HQ
Regional staff and branch managers may have limited authority over facility-wide sustainability targets set at global headquarters. Local staff are likely to be more interested in city-scale projects.
Key Assessment Criteria for Engaging Businesses
- Industry relevance to project/programme/policy: Sometimes it may be relevant to engage local businesses from across the spectrum of industries e.g. Climate Plan consultations. Other times it may be more strategic to engage and group stakeholders by industry or location e.g. creation of new waste management and resource recovery industrial park.
- Size inc. employee count: Influence over city residents and importance for job retention and growth
- Current policies and track record on climate e.g. corporate climate action plan, ESG reports or internal green procurement strategy: Consider whether to prioritize organizations who can demonstrate a good track record on climate.
- Note: Small and medium-sized enterprises (SMEs) often lack formal climate plans and require direct capacity building, whereas larger businesses typically have established targets (although these may not always be locally enacted).
- Assets e.g. owned buildings, fleets etc: Prioritize sectors with high operational footprints or control over critical infrastructure (e.g., large building portfolios, commercial vehicle fleets).
- Political and social influence: Consider a company’s broader political, economic, and community influence to amplify climate action across the wider region.
- Capacity to engage: Determine if the business has dedicated sustainability personnel (e.g., a Chief Sustainability Officer) or if climate initiatives fall onto already stretched operational managers.
- Timing: Carefully consider the timing of your engagement. Sometimes it may be most appropriate to involve business stakeholders as early as possible e.g. when developing/updating a Climate Action Plan. Sometimes it may be more appropriate to delay engagement e.g. to align with elections or corporate funding cycles.
Steps to action this:
01
Map City Sectors & Key Stakeholders
Identify and catalogue the dominant economic sectors, major anchor institutions (e.g., universities, hospitals), large commercial employers, trade associations, and informal business networks operating within the city.
02
Categorize and Segment Business Profiles
Classify identified businesses by size (SMEs vs. Large Enterprises), ownership structure (public, private, cooperative), and geographic footprint (hyper-local vs. multinational) to determine their specific drivers, capacity, and reporting needs.
03
Assess Climate Action Potential and Readiness
Evaluate potential partners against core criteria: industry relevance to your climate targets, current ESG or climate commitments, physical operational footprint (buildings, fleets), and capacity to engage.
04
Identify Internal Stakeholders and Decision-Makers
Determine the right entry points within targeted organisations, tailoring technical operational discussions for sustainability managers and strategic messaging for C-suite leadership and regional directors.
05
Design Tailored Engagement Strategies
Develop differentiated outreach approaches—offering direct capacity building and simplified support for SMEs, while leveraging formal partnerships, co-investment, or policy alignment for larger corporate entities.
Next Topic: Building collective responsibility for climate action through networks, alliances and partnerships