All too often, companies don’t look beyond internal initiatives when considering their sustainability initiatives. Brand simply isn’t part of the equation.
There are many reasons for this. Obviously, putting your actions in the public eye invites scrutiny—and potential accusations of greenwashing. And then there’s the question of consumer versus corporate brands. Many companies have a stable of consumer-facing brands—do they assume the green stature of the corporate brand, or carve out their own credentials?
Finally, corporations often question the audience who would receive the corporate brand. Surely stakeholders already have their perception of the company, and don’t need a brand to persuade them one way or another.
But there are incredible benefits to building a corporate brand with strong sustainability anchors. Especially, as I discovered, when that brand is narrowly tailored to a key strategic audience.
Focus On Audiences That Matter
Cerruti and Riney are poised to launch the Sustainability Leadership Report at this year’s Sustainable Brands Conference. The global green perception / reality study, arguably the first of its kind, will make some CEOs sit up and take notice—and others squirm in their chairs.
The study is impressive in its depth—100 leading companies were screened based on 175 performance metrics, and 16,000 perception ratings were gathered from 2,400 respondents. But what surprised me was the study’s narrow target for the perception measurement—the entire respondent base was comprised of recent university graduates, investors, and supply chain managers.
In hindsight, it all makes perfect sense. "There’s a real gap in knowledge when it comes to considering the views of these three highly attentive stakeholder groups," Cerruti explained. "The way your company performs against environmental, social and governance criteria is critical to the perception these groups have of you. If they believe in what your corporation is doing, they’ll be more likely to work for you, invest in you, and partner with you."
As Cerruti pointed out, the differentiation between corporation and brand is shrinking. So if a corporation is engaged in green initiatives, there could be a growing financial upside to letting the world (or at least your potential employees, investors and supply chain partners) know about it.
Following our interview, Cerruti and Riney introduced me to Michael Muyot, President of CRD Analytics, a leading sustainability investment analytics firm—and BrandLogic’s partner in the research study.
Muyot believes the study will have a direct influence on the fortunes of companies. "The global landscape has never been more competitive. For companies to be leaders, they need to leverage their brand within segments they may not have considered before."
There is ample evidence that companies engaged in sustainability reporting—itself a form of branding—already outperform in the stock exchange. As Muyot pointed out, 71% of the NASDAQ CRD Global Sustainability Index (QCRD) components produce official GRI reports. And the QCRD Index continues to outperform key benchmarks like the S&P Global 100.
Over the past decade, sustainability has led to incredible shifts in corporate thinking. BrandLogic’s new study should provide another step forward, as we begin to dig deeper into narrower and narrower target markets. It will be interesting to track the progress of the companies cited in the study—particularly those that have an unrealistically positive perception of their sustainability initiatives.
As Cerruti says: "The study shows many companies have perceived performance that exceeds their actual performance. These companies are risking their reputation among potential employees, investors and industry partners if they’re found out."
Will they shore up their weaknesses? Step up their efforts? Or simply ignore the study?
If they do the latter, the real experiment will come to light—how do they fare financially against their more progressive counterparts?