By James Cerruti

Senior Partner, Brandlogic

 

There’s little doubt that sustainability is at top-of-mind in the world of business. As awareness increases, stakeholders of all kinds are factoring corporate environmental, social and governance (ESG) performance into their decisions, prompting more and more companies to release annual sustainability reports. At the same time, corporations are seeing the value of sustainability reporting for its direct operational impact. Measuring and reporting on ESG performance and commitments is therefore more than a promotional exercise: an organized and structured effort in accordance with GRI guidelines generates the very information needed to improve efficiency, reduce risk and establish credibility.

 

Yet, we at Brandlogic know that there’s more to the picture than operational results. As a brand consultancy, we are acutely aware of the valueof perception to acompany’s reputation and overall competitiveness. It is not enough to perform well in real terms; communicating that performance and the commitments behind it can be equally, if not more, important in the battle to influence the marketplace. Reputation can have a powerful effect, both positive and negative. Apple, for example, has such a good reputation that it has been able to weather the widely reported governance issues regarding factory working conditions in China with virtually no impact. On the other end of the spectrum, oil companies like BP and ExxonMobil have been and will be tarnished by the legacy of environmental disasters for decades despite Herculean mitigation efforts. Even today, Exxon Valdez is a familiar term burned into the public consciousness – and that incident occurred nearly 25 years ago.

 

As important as public perception is, consider the practical implications of a company’s sustainability reputation – or lack thereof. A company that is considered to be a good corporate citizen will be more attractive to prospective employees and will be able to recruit better talent. It will be seen as a low-risk operation worthy of greater consideration by potential business partners as well as investors. These are important factors that go far beyond a “green” reputation among consumers and the general public.

 

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