Presentation looking how the issues of reputation, reporting and communications in corporate sustainability. It focuses on drivers, practices, outcomes and emerging issues for large companies around the world.

1. Reputation, Reporting and
Communications
February 19th 2015
Lecturer: Tobias Webb
Tobiaswebb.blogspot.com

2. Corporate Reputation: What and Why
• Driver of value?
• Perceptions of
product quality and
likely behaviour?
• ‘Your most
important asset’?
• Vague notion that’s
hard to quantify?
• All of the above…

3. Why does Reputation matter?
• 301 business leaders from
29 countries across 28
industries participated in
the 2014 Reputation
Leaders study
• Only 16% feel their
organization has the full
capabilities to manage
reputation.
• 65% of business leaders
saying that reputation
management is a top
priority for executives and
the Board of Directors.

4. Theorists? MIT Sloan/Imperial
The results of the survey showed that the company’s reputation for corporate
social responsibility had a greater effect on consumers’ willingness to
overlook negative information about the company than the company’s
reputation for being customer-oriented (defined as the extent to which a
business is viewed as being caring and attentive to customer needs) or for
being oriented toward service quality.
These results suggest that a dollar invested in corporate social responsibility
initiatives would buy greater insurance against negative information than a
dollar invested in either service-quality orientation or customer orientation.
However. Surveys are one thing.
The reality of boosting sales by ethical reputation is more complicated.

5. Consumers will pay for
sustainability/CSR/Reputation
• A tempting myth which CEOs still often believe
• Reality says they want to trust the brand, despite
surveys saying they will buy more socially
responsible products.
• Reality is that nearly 500 ecolabels confuse
consumers and beyond ‘deep green’ niches they
just want companies to take care of the issues –
and they won’t pay any more for the privilege
• Professor Craig Smith on Consumers and
Sweatshops

6. The vague and the vacuous?
• Lots of expert advice is all rather PR/jargon
oriented and communications orientated.
• For example.
• Look on Google Scholar since 2011. There’s
very few studies looking at reputation and
sustainability in a rigourous way
• Lots of organisations out there adding ‘snake
oil’ science and measurement of reputation

7. What can companies do? Cliches..
• Transparency
• Honesty
• Authenticity
• Humility
• Open ness
• Listening
• Responsiveness
• Why don’t these
happen?

8. Challenges to reputation improvement
• “No need to say more
than we need to”
• Legal risk
• Perceptions of open
ness vs. expectations
of stakeholders
• Career limiting fears of
radical transparency
given social media risk

9. Can you do the right thing and still
have a bad reputation? Yes
• Look at Nike, Gap, Adidas,
Primark etc
• Look at the Chemical
industry, Mining
companies…
• Companies behaving best in
class often do not get credit
outside the sustainability /
CSR world
• Understanding their work is
hard. Valuing it for
shareholders and society
even harder

10. So why bother? Back to the business
case for CR/Sustainable Business
• License to Operate
• Employee motivation
• Bank Account of Goodwill
• Partner of choice
• Trusted brand
• Academic and business case study
• Be popular on the internet
• Make CEOs feel good when they go to Davos

11. Who has the best reputation?
• Apparently, according to the “Reputation
Institute” consultancy the: “Top three CSR
reputation winners in 2014 are Google,
Microsoft and The Walt Disney Company”
• But according to GlobeScan it’s Unilever,
Patagonia, Interface and M&S on
sustainability.
So, good we’ve sorted that out then…

12. Corporate Sustainability and CSR
Reporting: What’s it all about?
• On the surface, massively
dull PR, as if someone
was trying to sell you on
the idea of spending time
in a library full of
propaganda
• But also significantly
important because of the
process sustainability and
CSR reporting takes a
company through

13. Really?
• Yes because to produce
an acceptable report or
website on sustainability
of any note the company
has to collect lots of data
• Data collection can
improve performance
• Imagine if facilities
managers are asked for
data – and what they are
doing to improve
performance

14. So where did CSR/ Sustainability
reporting come from?
• Some companies
produced reports
in the 1970s
• Accelerated
2000’s onwards
• 4000/5000+
produced each
year world-wide
• Regulatory
disclosure drivers
increasing slowly
(EU, China,
Singapore, South
Africa, Brazil,
often Stock
Exchange related)

15. So who reads them?
• Boards and senior managers read
them as they sign them off.
• That’s what does most of the good
in reporting.
• Assurance providers are paid to
read them!
• ESG analysts might read them.
• Some employees, potential and
existing, but few compared to
overall numbers.
• Journalists / NGOs when things go
wrong!
• Trade press, some mainstream
media, occasionally.
• Most met with deafening silence

16. Does reporting do any good?
Under-studied area. One working paper from Harvard and London
Business School says yes:
• ...find increased propensity to receive assurance to increase
disclosure credibility in the case of South Africa, and increased
propensity to adopt reporting guidelines to increase disclosure
comparability in both China and South Africa.
• In contrast, treated firms in Denmark and Malaysia did not increase
disclosure.
• Danish firms responded by embedding environmental and social
factors in their supply chain management, and by signing on the
United Nations Global Compact while Malaysian firms adopted
reporting guidelines.
• (No) evidence that the disclosure regulations adversely affected
shareholders.

18. Future of reporting?
• More of it as Stock Exchanges,
some investors,
institutions/NGOs and
Governments demand more
information on material issues
(GRI / CDP)
• Integrated reports: “...a concise
communication about how an
organization's strategy,
governance, performance and
prospects, in the context of its
external environment, lead to the
creation of value in the short,
medium and long term.”

19. Areas for further research
“…increasing number of countries are adopting disclosure regulations similar to
the ones considered….
…firms respond differently across countries, it is important to evaluate how
companies respond differently across distinct contexts.
…more research is needed in order to understand how companies change
resource allocations and investment decisions as a response to changes in
disclosure regulations.
Finally, a fruitful avenue for future research is investigating changes in the
demand for non-financial information.
While the disclosure regulations in some cases increase the supply of such
information, we still know little about how they affect the demand across
different stakeholders.”

20. Case Study: Interface
Corporate Responsibility
Communications

35. I Conclusions: Interface
• A story based on purpose matters most
• Demonstrating top level buy in over a long
time vital
• “Change the world by changing our industry”
message strong
• Social media not just for B2C companies
• Campaigning for level playing fields helps the
business AND drives credibility if sharing
attitude is genuine

36. I Final conclusions: Interface
• Shows that a medium sized company ($1
billion turnover) can make a big impact
• International community work (NetWorks)
linked to closed loop ethos. Helps
demonstrate world-wide company focus and
potential for sustainability to help
communities and the business in a
commercial proposition

37. Case study: Primark
Corporate Responsibility
Communications

38. The background
• Popular UK fast
fashion retailer
• Owned by FTSE 100
listed group ABF
• From 2005: NGO
accusations of
sweatshop
conditions

39. 2008 onwards: Pressure mounts
• BBC allegations of
sweatshop
conditions both in
India and the UK
aired
• NGOs and media
delighted to report
in detail
• Boycotts, bad PR

41. The response
• Boycotts don’t usually
affect sales much,
BUT:
• Reputational damage
in media was
undoubted
• Primark disputed
journalist claims and
launched mini-counter
offensive

45. Renewed vision statement:
“As an international brand with a global supply
chain we have a responsibility to act ethically.
We embrace this responsibility as an
opportunity to be a great force for good.
Primark is committed to providing the best
possible value for our customers, but not at the
expense of the people who make our products”

46. Other substantive changes
• Integrated systemic
operational changes by
March 2009/March
2010
• Hired Senior Head of
Ethical Trade
• Doubled Ethical Trade
team 2009/10
• Buyers need sign-off
from Ethical Trade head
for new suppliers
• 100 buyers given
intensive Ethical Trade
training
• Engaged with NGOs in
meetings via Ethical
Trading Initiative

57. Primark: Conclusions
• Business “head in the sand” until 2008
• Reacted unusually in pursuing journalist(s)
• Made substantive internal changes (Ethical
Trade Director, support staff, senior level buy-
in and stakeholder engagement)

58. Primark: Conclusions
• Used partnerships, pilots to drive change
• Uses multi-media on the website. Humble tone: Not
active on youtube/twitter/FB yet
• Confident enough to pay for “Times 100 Case Study”
• Now welcomes challenges from NGOs/others

59. Primark: Final Conclusions
• Financial impact of scandal and boycotts was not key
driver (little impact)
• Moral/Reputational impact on management
• Reputation ‘recovered’ with NGOs and media
• Now much better attuned to supply chain risk

60. 15 Things Good Corporate CR
Communicators Get Right

61. 1. They have clear websites
navigating readers to clear
targets
2. They demonstrate both
an understanding of the
global challenges, and their
role in the world.

62. 3. They use their reporting as
the basis for communications
campaigns, not as the
campaign itself
4. They are not afraid of
honest debate about
challenges and progress

63. 5. They use social media to
communicate on sustainability,
either via a corporate account
or by specific accounts
6. They publish regular
performance data and updates

64. 7. They offer news feeds on
progress
8. They showcase critical
stakeholder voices and
suggestions for improvement

65. 9. They partner with credible
academic institutions and NGOs –
because science matters!
10. They talk about how
sustainability fits with business
strategy – and how that will
improve

66. 11. They don’t forget to link
sustainability with both social
issues and governance, global
and local
12. They host public debates
which are streamed online and
do not always have themselves at
the centre

67. 13. They seek crowd-sourced solutions and encourage and fund
innovation
14. They are clear about sustainability as a business opportunity

68. 15. They are clear about their
corporate power and influence
and have a public debate
about how that power and
influence are used, and report
on progress, positive and
negative

69. Further CR Communications Reading:
http://www.slideshare.net/Tobiaswebb/how-to-
shout-about-sustainability-effectively
http://www.slideshare.net/Tobiaswebb/csr-
ethics-and-sustainability-communications-then-
and-now