Questions of perception and reality are, you would think, the preserve of experimental psychologists and white-cloaked psychiatrists. A new report from brand management specialists Interbrand blows that assumption apart. Brand managers must be as attuned to the inter-relationship between these two phenomena as any clinician. And nowhere is this truer than when integrating sustainability into a brand’s strategy, positioning and values.
Interbrand’s Best Global Green Brands report, now in its third year, picks out the world’s largest brands that are getting the balance right. Topping the list are automotive giants such as Toyota, Ford and Honda, driven by innovation, and Nissan is the biggest riser. However, technology brands dominate the overall report – Panasonic leads the category – while there are notable mentions for apparel/retail brands such as Adidas, Nike and H&M.
But in a world flush with sustainability rankings, do we really need another? The first thing to note about this latest offering is its robust methodology. This isn’t back-of-the-envelope stuff. Interbrand undertook a consumer study covering about 15,000 respondents in the world’s 10 largest economies. It then weighted these findings against performance data provided by accountancy firm Deloitte. Its assessment covers 82 measures, ranging from energy efficiency and resource intensity to workplace standards and transparency.
Overall scores were calculated by combining the standardised performance and the perception scores, applying a discount factor to cases where positive perceptions of the brand outweighed a company’s actual green performance. The resulting gap is the difference between a brand’s performance score and its perception score. A positive or negative gap represents a risk to the brand or an under-utilised asset.
The methodology is another reason for giving this report more than a second glance: namely, the attention it gives to the link between perceived sustainability and real sustainability. “Ultimately, we believe the strongest green brands exist at the point where perception and performance meet,” explains Interbrand group chief executive, Jez Frampton.
Not all brands are so in sync. BP provides an emblematic case of a brand whose claims to sustainability ran ahead of them. In its 2009 sustainability report, the UK oil major lauded safety as “fundamental” to its activities and a “top priority” for senior management. Within months of publication, the disastrous Deepwater Horizon spill occurred in the Gulf of Mexico and the chief executive was out on his ear. A subsequent federal investigation showed “systematic” flaws in BP’s safety systems. In short, the precise opposite to what the company claimed. The result was a bill for about $42.2bn (£27.3bn) – and, incidentally, a sharp exit from Interbrand’s Best Global Brands list.
“Any benefits that come from positive perceptions that don’t have a solid performance to back them up will be short-term. Brands in such a position run a real long-term risk of a consumer backlash,” says Frampton.
That’s the diplomatic way of putting it. More bluntly: greenwashing will come back to bite you. Consumers aren’t daft. They have a good nose for brand messaging that isn’t substantiated. And even if they didn’t, consumer activism and social media is such that word soon gets out.
“It’s not just the channel of social media that has changed how people approach sustainable brands, but the maturity of the content and dialogue within the communities,” adds Frampton, who notes that consumers and audiences are now much more influential in shaping what they need and expect from individual brands.
Greenwashing has a flip side that gains far less attention. That’s to say, management hesitancy. Richard Hardyment, associate director at specialist consultancy Corporate Citizenship, spells it out: “Because of the history of greenwashing, some companies are very reticent about going out there and being accused of over-claiming.”
Giles Gibbons, a sustainability expert at London-based communications firm Good Business, concurs. Although he notes a gradual improvement in the social and environmental performance over the past decade or more, he sees brands growing “increasingly wary” about championing their activities. He puts such reticence down to two related factors: “One, because they are not convinced that someone will say, ‘well I don’t agree with that’; and the other thing is that they may well have missed something.” No one is perfect after all, the greenest of corporations included.
There are other factors at work too. Many marketing teams are sceptical about the value of “green” branding and therefore give it short shrift. That’s certainly the view of David Clark, vice-president for sustainability at global packaging firm Amcor: “Today we’re absolutely convinced that the majority of consumers will not pay more for an environmentally responsible product, so that’s one of the challenges we have.” Alternatively, some high-performing brands might be trying to communicate their sustainability credentials, but failing to get the message through to consumers.
Last but not least, cultural issues influence a company’s reticence to speak out too. “Much comes down to the nature of the company and how willing they are to brag about what they do,” explains Peter Knight, co-founder of sustainability communications advisory firm Context. “They just see it as a fundamental thing that they have to do and not something that they should be gaining brownie points for.”
This last group is the hardest to shift, admits Knight. Pointing out that how much publicity their poorer-performing competitors are getting for their sustainability programmes can sometimes push them to open up. There are other arguments too. Stronger relationships with key stakeholders, improved recruitment and retention, and increased brand value are among the chief benefits cited by Interbrand’s Frampton.
As the Best Global Green Brands report suggests, however, those benefits only kick in when brand messaging is authentic and grounded in fact.