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Sustainability Leadership Report 2011

Sustainability Leadership Report 2011

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Published by Tameron Eaton

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Published by: Tameron Eaton on Jul 11, 2011
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07/25/2011

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Supported by
Sustainabilityleadership report
Measuring perception vs. reality 
2011 INAUGURAL STUDYCOVERING 100 GLOBAL CORPORATIONS
Matching actual corporate sustainabilityperformance with perceptions among investmentprofessionals, purchasing/supply managementprofessionals and graduating students from theUS, China, Japan, Germany, UK and India
 
 
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INTRODUCTION 
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SOURCES AT A GLANCE 
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SUSTAINABILITY IQ MATRIX:GLOBAL 100 PROMINENT BRANDS 
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SUSTAINABILITY RATINGS:GLOBAL 100 PROMINENT BRANDS
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REPORTING AND ADVISORY SERVICES EXECUTIVE SUMMARY
 This report summarizes a study that comparedperceived and actual reported corporate perfor-mance on environmental, social and governance(ESG) factors for 100 leading companies acrossmost industries. The global study, conducted byBrandlogic and CRD Analytics, measured percep-tions in six countries among three key audiences:investment professionals, purchasing professionalsand graduating university students soon enteringthe workforce, all of whom have reasons to be
highly attentive
to the performance of corporationson ESG factors. The goal of the study is to help those responsiblefor managing corporate reputationboth sta and line executivesunderstand the gap betweenperception and reality regarding their ESG perfor-mance. The study’s insights oer valuable input asthese professionals seek to inuence key externalstakeholders, helping to target communicationsand operational investments surrounding ESG. Thisreport contains only high-level ndings. Detailedanalyses of individual companies and sectors areavailable separately from Brandlogic Corporation. The study revealed a number of key ndingsand insights.
Regression analysis revealed social factors were,on average across the sample, twice as signicantas either environmental or governance factors indetermining survey respondents’ perception of good corporate citizenship in 2011.
When asked about the importance of goodcorporate citizenship in respondents’ decision mak-ing, we learned that an overwhelming majority88 percentstate that it is “important.Nearlyhalf–45 percent–view it as “extremely important.
Within the overall rankings, there were some strik-ingand surprisingndings. For example, theperceived performance of respected companieslike Google and Apple dramatically exceeded theiractual ESG performance.
From an industry sector standpoint, Pharmaceuticalsstands out, with almost all surveyed companiesleading in both actual and perceived performance.Several IT companies also displayed leadership inboth measures.
 
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2011 SUSTAINABILITY LEADERSHIP REPORT
Measuring perception vs. reality 
WHAT IS SUSTAINABILITY?
While sustainability is often associated with“green” environmental practices, it is increasinglybeing used in a broader sense. For the purposesof this study, sustainability and sustainablepractices encompass social and corporate gover-nance factors, in addition to practices relating tothe environment.
What prole should ESG practicesbe given in brand positioningand communications?
 There is an increasing, global focus on corporatesustainability practices. ESG performance is beingscrutinized more closely than ever.
 Today, there is a clear mandate for marketing and branding executives to do moreto ensure their brand’s sustainability. Its ongoing relevance and health must beestablished in a world of shifting societal, customer, employee and investor values.A key question for corporate leadership involves the linkage between operationalsustainability practices and the corporate brand. If ESG practices are indeedbecoming more important to major constituencies, what prole should they begiven in the organization’s brand positioning and communications? To answerthis question–and make good brand investment decisions–it is critical to obtainobjective observations on the role sustainability practices play in the decision-making processes of key stakeholder groups. With appropriate measurement,leaders can prioritize sustainability initiatives using fact rather than conjecture.Measurement also creates an opportunity to provide critical inputs on the materialimpact (or “materiality,” in the parlance of reporting) of specic sustainability issuesfrom the standpoints of both internal and external stakeholders. These inputsare crucial for compliance with the reporting criteria established by the GlobalReporting Initiative, which produces a leading standard for sustainability reporting. The role played by sustainable practices in stakeholder decisions represents anew and valuable input for both brand investment guidance and reporting com-pliance, yet this factor is not typically addressed by existing brand performancemeasurements. It is often necessary to modify these measurements by integratingsustainability into brand research methodologies and analytics.An in-depth examination of currently available surveys, studies, thought leadershippapers and articles on the subject of corporate sustainability revealed signicantknowledge gaps. In particular, our team noted a marked lack of tools that can pin-point where and how corporate brand- and reputation-building communicationsshould intersect with the ESG concerns of key constituencies. In addition, there waslittle or no ability to identify the specic internal operational initiatives that can bealigned to address these concerns. The research team concluded that closing these gaps could add value and clarityto corporate decision-making around sustainability investments in both opera-tional improvements and brand communications. This inaugural study, the rst of aplanned annual series, is the result of our eorts to help clients ll those knowledgegaps and make informed strategic communications, as well as operational deci-sions around their ESG performance.

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