Section 10.1: Corporate governance and sustainability
Section 10.2: Sustainability reporting
Section 10.3: Global reporting initiative (GRI)
Section 10.4: Evaluation of sustainability performance
10.6: Reputation management for sustainability
Over the past two decades, companies across all industrial sectors have been putting greater effort, commitment, and investment into demonstrating good corporate citizenship on environmental, social and governance related factors within their businesses. However, research shows that it is getting more difficult for companies to gain due recognition for their sustainability actions.
A 2012 assessment report of 94 global companies identified a distinct gap between sustainability performance and the public’s perception of sustainability performance. Based on Brandlogic’s Sustainability IQ Matrix, almost 20% of companies surveyed increased their scores by more than 10 points from 2011. Seven of these saw increases of more than 24 points on the 100-point Sustainability Reality Score (SRS) scale.
However, on the perception front, the mean Sustainability Perception Score (SPS) dropped from 47.2 in 2011 to 44.5. Two-thirds of companies surveyed in both years witnessing a decline in their sustainability perception scores.
A key finding from this reports suggest that in recent times, a company’s ability to deliver on sustainability is being outstripped by their ability to communicate their sustainability achievements effectively, highlighting the importance of reputation management in sustainability.
Framework for Reputation Management
Principle 1: Corporate Goal Alignment
The alignment of corporate goals with a chosen sustainability target is the first step undertaken by businesses’ shift towards sustainable operations. In order to be successfully accepted and applied throughout the business, the company has to gain public acceptance and buy-in by ensuring that the cause resonates with all its stakeholders. A company can further define and differentiate itself from its market peers by embracing a sustainability target that is less “crowded”. By identifying itself with sustainability targets or causes that are less popular with it peers, a company stake a special claim can increase its competitive advantage through greater recognition for its efforts in tackling more “difficult” sustainability issues.
Principle 2: Strategic Partnerships and Collaboration
Taking action following the alignment of corporate and stakeholder sustainability goals requires the identification and establishment of strategic partnerships to advance the efforts undertaken. The formation of strategic partnership and the identification of new avenues for mutually beneficial collaborations with reputable and selected non-government organizations (NGOs), charities, and community action groups would assist with both the organization of sustainability efforts and the communication of future sustainability achievements.
Principle 3: Resource Deployment and Internal Engagement
To demonstrate genuine and on-going commitment towards these sustainability targets, companies have to ensure that all employees and available resources are engaged and deployed effectively to meet the defined targets. This may involve the strategic leveraging of organizational resources such as capital investment, the upgrading of employee’s professional skills and technical knowledge, as well as the review and optimization of existing distribution networks.
Principle 4: Diverse Communication Pathways
Changing the public’s perception of a company’s green performance comes down to clear and effective communication. Companies can diversify from traditional means of marketing communication, and consider new and ways of engaging with their key stakeholders and consumers on material sustainability issues. This may include encouraging consumers to participate in sustainability events organized by the company for the greater community. By engaging with participants within a social setting, companies stand the further opportunity to transform them into advocates for the brand. Publically promoting sustainability initiatives and performance comes with its own risks. As a company does so, media coverage and greater public visibility and awareness can lead to create scrutiny of the company and its “sustainability branding” initiatives.
McKinsay & Company (2011) “The business of sustainability: McKinsey Global Survey results”
Elks (2014) “H&M Trying to Prove ‘Ethical Fast Fashion’ Is Not an Oxymoron”