Sustainable Brand Perception vs. Performance: Reducing the Gap

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Increasingly, evidence demonstrates that global stakeholders across the board are expecting business to deliver greater value beyond just a slicker product or bigger profits. This panel provides three types of filters for decision-making as to how to prioritize your sustainable innovation initiatives such that you might recognize most uplift in stakeholder support.

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Sustainable Brand Perception vs. Performance: Reducing the Gap

  1. 1. Sustainable Brand Perception vs.Performance: Reducing the Gap¡  Caroline Holme, Director of Corporate Affairs, Globescan¡  Kate Cox, Head of Strategy, MPG Media Contacts, Havas Media¡  James Cerruti, Senior Partner of Strategy and Research, Brandlogic¡  Tom Zara, Global Practice Leader of Corporate Citizenship, Interbrand Sustainable Brands London Conference
  2. 2. Sustainable Brand Perception vs.Performance: Reducing the Gap¡  Caroline Holme, Director of Corporate Affairs, Globescan Sustainable Brands London Conference
  3. 3. Recognised leaders – experts identify these companies as top-tiersustainability leaders Unilever 17 Interface 10 GE 7 Patagonia 7 Walmart 7 Marks & Spencer 5 Natura 4 Nike 4 Novo Nordisk 4 Siemens 4 Toyota 4 IBM 3 Nestlé 3What specific companies do you think are leaders in integrating sustainability into their business strategy? (OPEN-ENDED)
  4. 4. Plan A launchedEcomagination launched Sustainable Living Plan launched Start of corporate engagement on sustainability
  5. 5. The ‘sustainability leadership triangle’ – recognised leaders demonstrateevidence of success in each of three critical pillars Vision / Strategy Integration / Engagement / Performance CommunicationWhy do you think [INSERT COMPANY #1 FROM ABOVE] is a leader in sustainable development? Please enter up totwo responses in the spaces provided.
  6. 6. Sustainable Brand Perception vs.Performance: Reducing the Gap¡  James Cerruti, Senior Partner of Strategy and Research, Brandlogic Sustainable Brands London Conference
  7. 7. Supported bySB CONFERENCELONDONNovember 26, 2012
  8. 8. The Sustainability Leadership ReportIs Is not another•  A management framework for •  Green survey focusing company investments •  Opinion leaders/NGO survey•  Comparing quantitatively real versus perceived performance •  Straight ranking of Top 50 or 100•  Of 100 leading brands in 9 GICs •  Consumer perception study•  Across E, S & G dimensions•  Among highly attentive audiences - Investment professionals - Purchasing professionals - Graduating students NOVEMBER 26, 2012
  9. 9. Why we focus on “highly attentives” Stated Importance of Corporate Good Citizenship in Decision Making100 90 88% 80 •  Invest in 70 Extremely •  Partner with or somewhat •  Work for 60 important 50 40 30 20 •  Purchase 10 intent 2% 0 "Highly Attentives" Consumers NOVEMBER 26, 2012
  10. 10. The management framework begins with rigorouscomparison of performance on two dimensionsSource of the Source of theSustainability Reality Sustainability Perception(CRD Analytics) (Brandlogic global survey)141environmental, social and governance 16000+ company ratingsmetrics for rating companies5 2500+ respondents from 3 highly attentive stakeholderkey performance indicators groups (800+ respondents in each)per ESG dimension1200 100 prominent global corporations covering 9rated corporations of the 10 global industry categories (GICS) 6 major countries covered (400+ respondents in each) NOVEMBER 26, 2012
  11. 11. The BrandlogicSustainability IQ Matrix℠ NOVEMBER 26, 2012
  12. 12. CHALLENGERS LEADERSREALITY LAGGARDS PROMOTERS PERCEPTION NOVEMBER 26, 2012
  13. 13. The Brandlogic2012 SustainabilityLeadership Report SM100 prominentglobal brands
  14. 14. CHALLENGERS LEADERS TELL RAISE A BETTER THE BAR STORYLAGGARDS PROMOTERS LEARN FROM DO THE THE LEADERS HARD WORK... OR ELSE NOVEMBER 26, 2012
  15. 15. Our study allows comparisons of peer performance yearover year, not just at the aggregated level shown here… NOVEMBER 26, 2012
  16. 16. ...but also at disaggregated levels by stakeholder group and E, S & G dimension…While GE’s perceived performance improved in 2012, Siemens’ fellamong two of three audiences on each E, S & G dimension NOVEMBER 26, 2012
  17. 17. …and at the level of the factors that comprise each of theenvironmental, social and governance measuresPerceptions among CRD Analytics components ofPurchasing Professionals Social Performance Indicator (SPI) score NOVEMBER 26, 2012
  18. 18. Thank youFor a free copy of the report, go to:www.sustainabilityleadershipreport.com NOVEMBER 26, 2012
  19. 19. Sustainable Brand Perception vs.Performance: Reducing the Gap¡  Kate Cox, Head of Strategy, MPG Media Contacts, Havas Media Sustainable Brands London Conference
  20. 20. Sustainable Brand Perception versus Performance: Reducing the Gap 27th November 2012Havas Media: Meaningful Brands for a Sustainable Future
  21. 21. We survey ‘meaningfulness’ globally5th year of research into brand meaningfulness 2011 survey covered: •  50,000 consumers in 14 countries •  300 brands in 10 industriesExplores brand equity in relation to personal well-being and social capital Directs, shapes and measures meaningful communications
  22. 22. “WOULD YOU CARE IF THIS BRAND CEASED TO EXIST?” CAN WE MEASURE ‘MEANINGFULNESS’?“DOES THIS BRAND IMPROVE YOUR QUALITY OF LIFE?”
  23. 23. Consumer Perception of ‘Being a Better Business’ and‘Personal Value’ combined into one metric Meaningful Brand Index Collective Outcomes Personal Outcomes
  24. 24. Huge disparity in the power of brands across markets 30% 5% of people would care if this brand disappeared in the UK 18% of people would care if 12% of people would care if this brand disappeared in this brand disappeared in North America Europe 53% of people would care if this brand disappeared in South America 50,000+ people 14 countries 300 brands
  25. 25. Developing and Developed Markets All Countries, 2010–2011 Always + Often Always Often 2011 2010 Global 12 43 32 10 2 55% 47% Chile 21 51 23 51 72% - China 17 55 25 3 72% 68% Mexico 17 54 24 4 1 71% 69% Colombia 18 51 25 5 1 69% 45% India 23 45 27 4 68% 69% Italy 13 54 26 6 1 67% - Argentina 19 47 26 7 1 66% - Brazil 13 46 32 7 1 59% 63% Spain 9 40 36 13 2 49% 46% France 5 38 39 15 3 43% 43% USA 5 31 39 19 6 36% 34% Germany 4 32 43 17 4 36% 35% UK 3 25 43 23 6 28% 28% Increase/decrease of at least 3% since 2010 Q5t. How often do you consider environmental, social or ethical aspects when making purchase decisions / when you go shopping?
  26. 26. Why Responsible Products/Services not Chosen MoreFrequently? All countries, Top Three Reasons Given, Total Mentions, 2011Informa(on:  “From  the  informa/on  available,  it  is  difficult  to  understand  if  a  par/cular  product  is  more  responsible  than  another”  Expense:  “They  are  more  expensive”  Availability:  “In  my  area  they  are  not  broadly  available”  Impact:  “I  think  that  my  individual  effort  does/will  not  have  a  big  impact”  Credibility:  “I  do  not  believe  what  the  company/product  says  about  its  environmental  and  social  responsibility”  Interest:  “I  am  not  interested  in  socially/environmentally  responsible  products”   Subsample: those answering “Often,” “Sometimes,” “Rarely,” or “Never” at Q5 Q6t. Why do you not choose socially/environmentally responsible products or services more frequently? Please choose up to three reasons.
  27. 27. Marketing saturation driving corporate cynicism? 1.2% Developing Developed economies USA economies Argentina 1.0% Advertising spend as a proportion of GDP UK 0.8% Brazil Global average 0.6% Germany France Chile Spain China Colombia 0.4% Italy Mexico India 0.2% Correlation = -0.51 0.0% 20 30 40 50 60 70 80 % of people who always/often consider Environmental/Social/Ethical aspects when making purchasing decisions Source: MBI & Z Global Forecasts
  28. 28. And economic growth concerns in developed markets? 18% Argentina Correlation = 0.59 16% India 14% Developing economies China 12% 10% GDP growth Brazil Colombia 8% Chile Global average Mexico 6% Developed economies 4% USA UK France 2% Germany Spain Italy 0% -2% 20 30 40 50 60 70 80 % of people who always/often consider Environmental/Social/Ethical aspects when making purchasing decisions Source: MBI & Z Global Forecasts
  29. 29. Insight + Implications for developed markets People’s start point for corporate communications in the Insight developed markets is cynicism. If the company’s motivation is not clear, the message will be treated with suspicion. Transparency is key – there is a specific need in developed markets to put the short term business reason for commencing Implication any marketing activity around Sustainability at the forefront of the messaging to combat cynicism
  30. 30. M&S Case Study
  31. 31. Thank you!
  32. 32. Sustainable Brand Perception vs.Performance: Reducing the Gap¡  Tom Zara, Global Practice Leader of Corporate Citizenship, Interbrand Sustainable Brands London Conference
  33. 33. BEST GLOBALGREEN BRANDS201227 November 2012
  34. 34. Agenda 1.  Introduction to the Interbrand Best Global Green Brands rankings 2.  Brand value perception methodology 3.  Sustainability performance methodology 4.  Value of sustainability reporting and disclosure strategy2 | Best Global Green Brands | London | 27 November 2012
  35. 35. The world is moving to a new center of gravity
  36. 36. A glut of promotion and hype has created a cynical audience4 | Best Global Green Brands | London | 27 November 2012
  37. 37. Yet, there is clearly a lot of noise aroundsustainability
  38. 38. We call this new paradigm ‘Corporate Citizenship’ How a Company treats…. Government Employees Customers Suppliers Community Planet …defines their perceived “Corporate Citizenship”6 | Best Global Green Brands | London | 27 November 2012
  39. 39. Critical examination of a key constituent How a Company treats…. Government Employees Customers Suppliers Community Planet …defines their perceived “Corporate Citizenship”7 | Best Global Green Brands | London | 27 November 2012
  40. 40. Methodology8 | Best Global Green Brands | London | 27 November 2012
  41. 41. Our Starting Point
  42. 42. 79 Brands Evaluated

  43. 43. Performance Score The performance score is calculated by Deloitte based on these 6 pillars: Governance Stakeholder Engagement Policies and mechanisms put in place by The degree to which the company recognizes the company to manage environmental and engages with the various relevant impacts and successfully set and execute stakeholder groups associated with the environmental programs. company. Operations Supply Chain The company’s performance across operations as The company’s performance in measuring, measured in energy efficiency, GHG emissions, reporting, and mitigating the environmental water management, waste management, and toxic performance of their supply chain. emissions management. Transportation and Logistics Products and Services The company’s performance in measuring, The product portfolio of the company and an reporting, and mitigating the environmental evaluation of the green attributes of its performance of their transportation and logistics, products, including product efficiency, business travel and commuting. sustainable production, and use of life cycle assessment.11 | Best Global Green Brands | London | 27 November 2012
  44. 44. Green perception assessment is based on a survey •  We interviewed a total of 10,000 consumers via an online survey •  Each brand was rated by at least 125 consumers per market (a total of 1,250 respondents per brand) •  The markets included the top 10 countries in terms of economic impact (highest percentage of global GDP) United United Japan China Germany France Italy Brazil Spain Canada States Kingdom12 | Best Global Green Brands | London | 27 November 2012
  45. 45. Perception Score The perception score is calculated by Interbrand based on the 6 external factors of our brand strength components: Authenticity Relevance The perceived credibility of the brand’s An assessment of the relevance of brand’s environmental claims. environmental claims. This involves comparing the perceived importance of green activities for the category with the brand’s green perception. Differentiation Consistency How differentiated the brand’s green efforts The consistency of the brand’s are perceived to be relative to other various green communications competitors in the category. across all touchpoints. Presence Understanding Consumer awareness of the brand’s The level of understanding of the brand’s green activities and its green green activities as a whole. reputation in the market.13 | Best Global Green Brands | London | 27 November 2012
  46. 46. The gap Two frequent scenarios Internal External > Company is engaging in Green Green meaningful green Performance Perception initiatives, but the Score Score marketplace doesn’t know about it < Green Green Company is engaging in greenwashing or is Performance Perception benefiting from a strong Score Score brand halo effect14 | Best Global Green Brands | London | 27 November 2012

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