New Metrics Marketing & Communications

How Sustainability Perception Continues to Shape Brand Value

Brand Finance determines whether public perception of brand sustainability commitments aligns with their performance — and the financial risks associated with any gap.

Published 2 weeks ago | About a 4 minute read

Image: Apple

Today, brand-valuation consultancy Brand Finance unveiled the 2025 edition of its Sustainability Perceptions Index — an annual study that measures the financial value of sustainability perceptions and reveals where brand reputation and ESG performance are out of sync.

Based on research with over 150,000 respondents across 40 countries, the study — now in its third year — articulates how the public’s perception of a brand’s commitment to sustainability can drive (or threaten) financial value by determining whether public perceptions (Sustainability Perceptions Value [SPV]) align with the actual performance of each brand — and the financial risks associated with any gap (Gap Value). Brand Finance calculates Sustainability Perceptions Value and Gap Value by combining survey data with ESG performance ratings from CSRHub.

“Brand Finance’s Sustainability Perceptions Index (SPI) links sustainability perceptions with financial value; and every year, the research is enthusiastically endorsed by the IAA,” says Dagmara Szulce, Managing Director at the International Advertising Association. “It’s easy to understand why we’re passionate about this report — not only do the insights become richer and more robust with each iteration, but it’s increasingly evident that SPI data is a vital tool for businesses across sectors to fully realise the value of the sustainability work they are already doing.”

How perception, not performance, shapes brand value

The Index assesses public perception of brand sustainability efforts, not their actual performance; the two brands with this year’s highest SPV illustrate the power of customer belief in shaping brand value:

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Apple retains the highest total SPV of any brand at US$39.0 billion. This reflects strong public belief that Apple is acting sustainably, despite ongoing criticism around labor conditions and environmental impact.
Microsoft ranks second in overall value but leads on untapped potential: With a positive Gap Value exceeding US$5.6 billion, Microsoft’s actual sustainability performance is significantly stronger than it is perceived to be. This gap represents brand value that could be unlocked through clearer communication of the company’s progress in these areas.

As Robert Haigh, Strategy & Sustainability Director at Brand Finance, points out: “Brands are increasingly walking a tightrope on sustainability. Overstating progress creates reputational risk, but failing to communicate genuine action means leaving millions in brand value on the table. As pressure from investors and regulators grows, clarity and consistency will become the key differentiators.”

Another unique case is Tesla — which Brand Finance estimates has lost over US$7.3 billion in sustainability-driven brand value in the past year. In 2023, Brand Finance identified US$4.1 billion of sustainability value at risk for Tesla, due to a widening gap between its strong environmental image and weaker governance and social performance. That risk has now become reality: Tesla’s total brand value has dropped from US$66.2 billion to US$43.0 billion, with its SPV falling from US$17.8 billion to just US$10.4 billion.

While the brand is still associated with environmental innovation, its sustainability perceptions have declined significantly across global markets. According to Brand Finance research, perception of Tesla’s environmental commitment saw double-digit drops in China, Denmark and Norway — with further declines of more than 5 percent in key markets including the US, UK and Australia — following growing scrutiny of Tesla’s labor practices; supply chain oversight; and the erratic, self-serving public actions of its CEO, particularly in the US.

Other SPI 2025 highlights

Brands with strong and consistent sustainability communications continue to lead. Huel, Dove, Trader Joe’s, Patagonia, The North Face and Tata are among those with the highest sustainability perceptions in their sectors.
Greenhushing, where brands hold back from communicating genuine sustainability achievements to avoid criticism, remains widespread. Brand Finance analysis shows that 98 of the 500 brands have a positive Gap Value — value that can be captured from enhancing communication about sustainability to align perception with performance — of over US$100 million, a jump from the 85 brands assessed to be leaving that significant value on the table in 2024.
Sustainability continues to influence brand choice, particularly in premium sectors. In the luxury auto category, sustainability accounts for 23 percent of brand choice — double the figure for the broader automotive market. Similarly, high drivers are seen in champagne and luxury cosmetics — where sustainability plays a stronger role than in their respective mass-market counterparts.
In B2B markets, sustainability is also gaining ground. In IT services — where brands such as HCL, Infosys and TCS have long invested in ESG messaging — sustainability now accounts for 16 percent of brand choice.

“The boardroom discussions on sustainability have long been contentious — as business leaders navigate (sometimes opposing) demands around profitability, investor expectations, regulatory scrutiny and building long-term brand value,” says IAA President & Chairman Sasan Saeidi. “These decisions have only become more complex in the past year or so, as there has been rising political attacks and media attention on corporate DEI and ESG.

“In addition to considering greenwashing and greenhushing, boards must also factor in the current political environment and potential backlash when determining their communications strategy on corporate sustainability. Data is the antidote to chaos, empowering brands to ensure sustainability is a true driver of brand equity.”