Relationships with stakeholders

The word "stakeholder" in the last few decades has become commonly used to mean a person or organization that has a legitimate interest in a project or entity. In the decision-making processes of a water utility the regulatory prescriptions and the constraints dictated by the authorities obviously have a fundamental role; however, relations with civil society stakeholders also are of considerable importance.

Water utilities and their interaction with stakeholders

Who are the stakeholders for a water utility?

Why are stakeholders so important?

How does PerFORM WATER 2030 project want to deal with the interrelationships with stakeholders?


Water utilities and their interaction with stakeholders

In the management of integrated water cycle, utilities have to deal with sludge treatment, which represents both a problem and an opportunity according to the circular economy paradigm.

Utilities can choose between different sludge management options, with diverse technological and operative characteristics. The utility would choose the option that ensures the highest economic value, within a framework characterized by environmental and water policies. Policy measures aim at promoting the most virtuous choices according to environmental and social perspectives and keeping back the most problematic ones.

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A relevant role in the selection of the management option is also played by the relationships between the utility and civil society stakeholders. Indeed, even though with different mechanisms than policymakers, also the stakeholders encourage utilities to enhance different options from both an environment and social perspective, so to ensure the highest "sustainable value".


Who are the stakeholders for a water utility?

Stakeholders generally include persons or organisations that can affect, be affected by, or perceive themselves as affected by a decision or activity related to an asset, either a productive plant or an infrastructure. Therefore, we refer to persons or groups of persons or organisational entities who have some interest in a built facility for what concerns operations, maintenance, repairs, renewal or the values associated to such activities.

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In the case of a water utility, an important group of stakeholders is that which includes the stakeholders who either do not have an economic transaction with the utility or who also interact with other roles. These stakeholders can be divided in:

  • directly-impacted stakeholders, or "first-level" stakeholders (residents, tourists, residents of downstream localities, water polluting and water using industries, landowners and farmers, etc.)

  • second-level stakeholders, activated by the "directly-impacted" stakeholders or self-activated (associations of residents or tourists, environmental associations, other non-profit organizations, NGOs, etc.)

  • third-level stakeholders, activated by the "second-level" stakeholders, by "directly impacted" stakeholders, by regulators or self-activated (municipalities and other local authorities, media, courts, etc.)


Why are stakeholders so important?

Stakeholders influence water infrastructure decisions. Indeed, to defend its right to operate, any utility wants to obtain legitimacy from its community.

More generally, we could expect that the attention and the efforts that the utility reserves to single effects in daily management respond more to regulation intensity than to local stakeholders’ objectives, owing to the authority and coercive power held by regulators. Moreover, when considering process innovations, corporate decision-makers are less prone to pressures exerted by informal institutions, relatively to regulatory pressures of formal institutions.

Additionally, one of the most important reasons why environmental practices beyond regulatory compliance are implemented is competitive pressure and the incentives coming from customer’s choice, which is a not a real factor for the most of water utilities which generally operates in a monopoly.

Importantly, whether and how the concerns of Stakeholders may diverge from regulated standards, and how Stakeholders may stimulate over-performance in the utilities sector are untapped areas of research.


How does PerFORM WATER 2030 project want to deal with the interrelationships with stakeholders?

Considering the critical role of sludge treatment from an economic, environmental and social perspective, the aim is to highlight the interrelationships between utility and stakeholders, focusing on the environmental and social impacts related to the specific management option. The project would provide a mapping of the stakeholders and the impacts for different management options for sludge treatment and an analysis of case studies related to the social acceptability of the different options in national and European regions. The latter will be performed through the identification, at both national and european level, of case studies similar to the Metropolitan City of Milan either for technologies or contextual factors; for this purposes we will be collecting data through interviews and questionnaires to water utilities and also opther sources like secondary materials, workshops, focus groups, etc..

Analysis of the social acceptability

Project details

Within the analysis of the social acceptability of sludge treatment technologies we focus exclusively on those stakeholders listed above, that either do not have an economic transaction with the utility or interact with the utility also in other capacities.

Indeed stakeholders also include local and national governments, as well as other policymakers. However, their action leans on State's authority. Therefore we choose to analyse in detail their influence on utility's decisions in a of the project.


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