Day 2 of New Metrics ‘16 kicked off with a main stage presentation from Reputation Dividend director Sandra Macleod, who provided us with a broad overview of how social impact and other factors can influence brand reputation; reputation, she contends, is a core factor that drives investor behavior.
The business case for sustainability is now even stronger and the results are clear - reputations underpin investor confidence in companies’ ability to deliver solid economic returns. Brands with “good” reputational value (Disney, Google parent company Alphabet and several others) – are creating a combined total of $894 billion worth of shareholder value. Reputation can also destroy market cap.
The investment community increasingly favors companies they see as pursuing effective CR and sustainability programs. Not just in specialist funds but across the S&P 500, companies that have a reputation for prioritizing ESG outperform low ones. Socially responsible investing is the fastest-growing investment category, and Macleod confirmed the role of reputation as a major corporate asset.
This affirmation that reputation is increasing investment prospects set up the morning for a number of supporting case studies.
Intel’s Supply Chain Sustainability Sr. Manager Jocelyn Cascio then shared the computer giant’s reasons for taking the lead in supply chain transparency and sustainability. First, since Intel owns its own factories, it decided to take charge and align its supply chain management with its core values (awareness, compliance, value, instinctual). Secondly, Intel has seen a four-fold increase in customer requests – to roughly half of its customer base - around supply chain sustainability since 2012. Cascio walked us through three main ways Intel is evolving its efforts:
- Intentionally integrating sustainability into its supply chain management system, driving accountability – ex: there is now a sustainability section in the scorecard, so it is measured alongside cost, tech and availability.
- Looking at all possible sources of data to understand risks.
- Collaboration, both internally and externally.
Next, International Flavors and Fragrance (IFF)’s Kip Cleverley walked us through the fascinating, circular economic case study of PuraVita - the first Cradle to Cradle-certified fragrance. The fragrance giant achieved this industry first using three main metrics: (1) Ingredients that meet the threshold for material health and recirculation; (2) sustainable manufacturing technologies such as renewable energy and an innovative water stewardship process; and (3) responsible and traceable sourcing.
Next up, Ben & Jerry’s Head of Social Impact, Rob Michalak, shared lessons learned from piloting the Multicapital Scorecard. As Mark McElroy of the Center for Sustainable Organizations explained, capitalism is not the problem; monocapitalism - the pursuit of development and growth of one type of capital at the expense of the others – is the problem, and multicapitalism is the solution. There is a need to maintain at least six categories of vital capitals to ensure a healthy society. The Multicapital Scorecard highlights all six of these vital capitals to ensure they are working to make a positive contribution to society.
Since undertaking the pilot, B&J has redesigned programs, raised standards and set higher targets for a low-carbon, climate-resilient, equitable and inclusive value chain, a regenerative dairy model, and a fair trade enterprise model. As Michalak said, “This is the strongest model we’ve seen in putting together a context-based overview of looking at your performance,” and it has helped the company redefine and raise the bar for what is possible in its business.
Next, the Natural Capital Coalition’s Michelle Lapinski shared a groundbreaking valuation approach: The Natural Capital Protocol - a comprehensive way to measure and put a dollar sign on your company’s overall impact. The Protocol is a standardized framework for businesses to identify, measure and value their direct and indirect impacts and dependencies on nature and ecosystem services. Already over 50 companies – including including Coca-Cola, Hugo Boss, Jaguar Land Rover, Kering, Natura, Olam, JetBlue, Tata and Nestlé have tested the framework and are valuing their impacts differently.
Finally, Chelsea Reinhardt of GRI unveiled its new set of global reporting standards. GRI has moved from “guidelines” to standards because they are more flexible and have a future-proof structure, ensuring the GRI standards remain up-to-date and relevant. There is also greater suitability for referencing in policy initiatives, to help drive further uptake of credible, standardized sustainability reporting. New features include:
- A set of 36 modules, 33 topic-specific standards
- A new format with clearer requirements
- Content clarifications
- Greater flexibility and transparency
- Continued alignment with other reporting frameworks (i.e. CDP) and the Sustainable Development Goals.