Corporations who’ve pushed hard this last year to improve their performance in sustainability may now face a new challenge – a growing skepticism among professional investors, supply chain officials, and recent higher education graduates.
Such are the results of the 2012 Sustainability Leadership Report, now in its second year, which analyzes real vs. perceived sustainability performance for 100 leading global brands that collectively represent 16 percent of the world’s economic output.
Brand consultancy Brandlogic and CRD Analytics, the sustainability analytics firm behind the NASDAQ CRD Sustainability Index, created the report to help corporate managers measure their overall sustainability performance and chart a path to sustainability leadership. Supported by the Institute for Supply Management (ISM), the report is available for immediate download at www.sustainabilityleadershipreport.com
“We hope companies, whether they’re among the 100 we analyzed or not, see this work as more than just another ranking. Rather, it’s an evidence-based management framework useful for understanding a fuller impact of corporate sustainability and uncovering new growth opportunities or reputational risks,” said Brandlogic CEO Hampton Bridwell. “Our goal is to help companies realize new results by aligning their branding, communications, reporting and stakeholder engagement processes. ”
The 2012 Sustainability Leadership Report reveals an about-face on perceived performance from the 2011 report. Last year, 66 of the 100 brands analyzed had perception scores ahead of their reality scores. This year, while 93 companies increased their real performance scores over last year – sometimes significantly – 68 of the companies saw a decline in their perception scores.
“Sustainability carries tremendous weight when it comes to corporate reputation,” said James Cerruti, Brandlogic senior partner of strategy and research and author of the report. “Even as real performance rose for almost all of the brands we analyzed, average perceived performance dropped off when compared to 2011.”
Other findings of the 2012 report remained more consistent with last year. For example, it was re-confirmed that sustainability factors heavily influence perceptions of good corporate citizenship. And once again, the social factors – like human rights, employment equality and product responsibility – are twice as important as environmental or governance factors.
The report is based on a unique methodology for comparing real vs. perceived sustainability performance. To obtain the perception data, Brandlogic conducted a global research study in the summer of 2012, which included 2,500 participants who are “highly attentive” to sustainability issues including investors, supply chain managers, and graduating college and university students located in the US, UK, Germany, Japan, India and China. CRD Analytics’ SmartView™ 360 platform was used to generate the real performance data, using quantitative and qualitative data from 141 performance metrics encompassing environmental, social and governance (ESG) factors.
The data are then brought together in the Brandlogic Sustainability IQ Matrix, a visual framework that plots each of the 100 companies into quadrants of “Challengers,” “Leaders,” “Laggards” or “Promoters” based on the intersection of their Sustainability Reality Scores (SRS) and Sustainability Perception Scores (SPS).
Nineteen of the firms that last year made it into the Leaders category – companies not only demonstrating strong realities, but also successfully communicating them – experienced a significant slippage in 2012 characterized by a loss of more than five points. On the positive side, there are six new Leaders in 2012, all of whom were Challengers in 2011: AXA, Coca-Cola, Deutsche Bank, EADS (Airbus), General Electric and L’Oreal. Dell, John Deere and SAP were also newcomers to the Leaders category. The brands were among six added to the pool of 100, joining Barclays, Facebook and H&M in replacing six companies that were retired from last year.
Methodologically, the survey structure remained identical, but the timing for data collection was extended to give companies more time to review and report their performance figures.