A new report by UK-based analyst firm Verdantix says most companies have inadequate budgets for sustainability communications and are running risks by failing to integrate sustainability themes into their brand identities. The report, “Rethinking Sustainability: Brand Risks and Opportunities,” identifies five archetypes of how companies communicate about sustainability. For Purists, such as Patagonia, sustainability is the corporate brand. Explorers, such as IBM, GE and Marks & Spencer, integrate sustainability into the corporate brand and communicate about the firm’s sustainability practices to a wide audience. Advocates are firms that aim sustainability communications narrowly at just two groups — employees and sustainability opinion leaders — and manage sustainability communicates separately from corporate communications; McDonalds, Samsung and Tesco are examples. Reactionists are firms whose primary communication about sustainability takes the form of responding to crises. As an example, the report cites Mattel, which was the subject of a funny and effective attack by Greenpeace in 2011. Nothingists, as the inelegant name suggests, do not communicate about sustainability at all. Verdantix tags WIndstream, a U.S. telecommunications provider, with the Nothingist label.
Corporate communication strategy should follow from brand strategy. There is probably an opportunity for one or two companies in every market to establish differentiated positioning related to sustainability, but it seems unlikely that such an approach can pay off for every firm.
Valuing Water Correctly
At most companies with sustainability programs, water conservation has a lower priority than greenhouse gas reductions. This is partly because of perceptions that climate change is a more imminent threat than water scarcity. It’s also because the business case for conserving water can be harder to make, given the low cost of water in many regions. A recent analysis by McKinsey & Company, the management consulting firm, shows that the economic value of water to a business is greater than municipal water use fees, however. The costs of treating and disposing of waste water can exceed the costs of fresh water. The energy used to pump, heat, cool and treat water also has costs. McKinsey observes that, in manufacturing processes, water is a carrier, and waste water leaving a plant may be carrying with chemicals and heat, which have their own value. McKinsey cited a pulp and paper company that used the water-as-carrier concept to justify process improvements that led to a savings of 10 percent of measured carrier costs, a reduction in total operating expenses by 2.5 percent and in water use by nearly half.
Have you validated your brand's sustainability claims?
Join us as representatives from Quantis, Johnson & Johnson and Unilever discuss pitfalls and recommended practices for communicating scientific claims on product packaging, as well as in any and all marketing, advertising and public relations activities — October 19 at SB'21 San Diego.
This is a nice example of the benefit of thinking broadly about value and cost. Sustainability strategists should help promote systems thinking, which can reveal insights like those in the McKinsey case study.
How To Engage in Environmental Policy
A broad analysis of the literature on environmental policy-making yields important advice for businesses, according to the Network for Business Sustainability (NBS), a Canadian research organization. NBS points out that public policies can have major impact on company operations and profitability, so companies have a vital interest in the shape that public policy takes. From its review of the literature, NBS distills the following recommendations for businesses:
- Engage early. Getting involved early on allows you to understand what is at stake for your business and demonstrate a commitment to finding solutions.
- State your view on policy options. Firms can have the greatest leveragen the early stages of policy development. The decisions that determine who will pay for a policy and who will benefit tend to be made early on.
- Explore issues with diverse stakeholders. Communicating with a broad set of stakeholders is a good way to identify emerging issues. Focus on those relevant to your market and your firm.
- Develop and communicate a position. Firms that draw on their expertise to produce well-researched, relevant analyses can have great influence throughout the policy cycle. Share your insights on the impacts of different policy approaches.
- Lead. Not every company can be a leader in the policy making process, but those that are can reap benefits, including having extra time to chart its course and choose the most efficient approach.
- Commit for the long term. Environmental issues stay relevant for decades but conditions change and policies may need to evolve. Staying involved with government, industry peers and other stakeholders over time lets you make sure policies continue to be appropriate.
Engagement in the process of shaping environmental policy is an important element of sustainability communications and strategy.