A 2012 Gallup poll reported sobering news for Corporate America — only 19 percent of the public has significant confidence in big businesses, 41 percent has some and 39 percent has little or none. The only institutions doing worse in the public’s eye are HMOs and the U.S. Congress.
This comes as no surprise given the plethora of corporate controversies, CEO scandals, bailouts and environmental accidents that have dominated headlines in recent years. These types of stories often overshadow the good work being done by more conscientious brands, making it difficult for them to stand apart from less-responsible competitors.
Perhaps as a result, a slew of lists, rankings and indices have emerged in the business world, measuring everything from codes of ethics to sustainability practices and public perceptions. Can making it onto one of these lists help companies break free of public incredulity and build valuable brand trust?
Green and Good
A natural starting point for these lists is to determine which brands are, in fact, the most eco-friendly and sustainable.
Enter Newsweek’s Green Rankings, which evaluates 500 companies based on their environmental impact, management and disclosure to determine an overall “Green Score.” This year, technology companies reigned supreme with IBM, HP, Sprint Nextel, Dell and CA Technologies all appearing in the top 10. The list also reflects significant sustainability progress in “Food, Beverage and Tobacco” and “Transport,” both consumer-facing industries.
While quantifying environmental impact, waste reduction, greenhouse gas emission decreases and other sustainability metrics can be relatively straightforward, how does one assess a company’s “goodness?”
Think tank Ethisphere aspires to do just this with its World’s Most Ethical Companies List, which assigns companies an “Ethics Quotient” determined by a series of multiple-choice questions covering companies’ codes of ethics and litigation, regulatory infraction records and sustainable business practices.
A more eclectic mix than some, Ethisphere’s list includes everything from staffing services firms to insurance companies and hospitality enterprises. However, technology and consumer-facing companies again maintain a strong presence, with notable appearances from eBay, GE, Microsoft, American Express, L'Oreal and Pepsi, among others.
Communication
With so many businesses making admirable strides toward being “green and good,” why does the public remain dubious? Clearly, we are dealing with a public relations failure of epic proportions. In a world where brands can be built or broken in 140 characters or less, which firms are doing the best job at communicating their good work?
The SMI-Wizness Social Media Sustainability Index attempts to answer this question by examining how companies use social media to communicate their sustainability and corporate social responsibility initiatives. Once again, consumer and technology companies predominated, with Levi Strauss, eBay, Danone, GE, IBM, Microsoft and FedEx making the list’s top 10.
The index shows most corporate sustainability communicators prefer using Facebook to share their news, followed by Twitter, blogs, YouTube and now even Pinterest. Google+ barely registered, much to nobody’s surprise.
“The foundations of both social media and sustainability are authenticity, transparency, community, innovation and creativity,” Wizness said in a release. “Already, through social media, these forces have shaken the way most major companies do business — be it customer service, supply chain management or recruitment along with the more obvious areas of marketing and public relations.”
Perception or Practice?
Aldous Huxley once wrote: “There are things known and there are things unknown, and in between are the doors of perception.”
In a perfect world, the public already would know which companies are bona fide “green and good” and which are less than responsible. However, reality dictates they must make do with perceptions alone.
The question of brand perception is explored in the annual CoreBrand Top 100 BrandPower Rankings Report, which combines brand familiarity with favorability to develop a single indicator of brand strength. The report found consumer and technology companies are viewed more favorably than, say, financial firms. Coca-Cola ranked number one on the list for the sixth year running and Google jumped 93 spots in five years. Conversely, Charles Schwab, Morgan Stanley and JPMorgan Chase each fell several dozen spots.
“We found that in the current climate, consumers are evaluating corporate brands more harshly, and these brand criticisms are being amplified with the proliferation of social media and the 24-hour news cycles,” said James Gregory, founder and CEO of CoreBrand. “Now more than ever, companies need to improve the quality of their messages to the marketplace and focus on rebuilding trust.”
We get it: The public is more critical of corporations than ever before. But how do these perceptions stack up against brands’ actual sustainability practices?
Addressing this question is Brandlogic’s Sustainability Leadership Report, an influential survey that questions 2,500 investors, supply chain managers and graduating college students to determine perception scores compared with real performance data to come up with a ranking. The most recent report found sustainability issues have a strong influence in overall perceptions, and social factors such as human rights, employment equality and product responsibility are twice as impactful on perceptions as environmental or governance considerations.
Brandlogic features the top-scoring companies in the report’s “Sustainability Leaders” section, which like many of the other lists, is dominated by consumer-facing and technology companies such as Coca-Cola, Nestlé, Colgate, BMW, Dell, Philips and IBM. These are the companies Brandlogic says are doing the best job both of implementing socially responsible practices and being recognized for it.
Interestingly, the report also uncovered several instances of major gaps between perceptions versus practice such as Apple, whose perceived “green” performance far exceeded its actual achievement.
Throughout these lists, rankings and indices, firms accustomed to dealing directly with consumers seem to be best at talking the talk and walking the walk on sustainability. Under modern media’s relentless gaze, firms can no longer afford to be anything but authentic; dishonesty and malpractice will be exposed, leading to robust ramifications for brand perception and through it, loyalty. Rather than fear it, some companies are electing to embrace transparency and rebuild the public’s trust in big business.
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Founder & Principal Consultant, Hower Impact
Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.
Published Apr 2, 2013 5pm EDT / 2pm PDT / 10pm BST / 11pm CEST