My latest GreenBiz article is “Who’s on First & What’s the Point,” focused on corporate social responsibility and reputation rankings: what they mean, how they’re determined and how companies can position themselves for the top of the list.
Who’s on First & What’s the Point
Melissa Schweisguth, for GreenBiz, 8/5/09
Corporate responsibility-related (CR) rankings are increasing in number (see Joel Makower’s post on green surveys) and the results are anything but uniform. Almost every major corporation nears the top of one list or another and none consistently sweeps the ratings.
Given this, one may start to wonder about the validity and utility of such listings. Yet a closer look reveals that differences lie in design, making results complementary rather than conflicting. At the same time, businesses may get caught up trying to improve rankings at the expense of real progress in CR impact. If one considers research design and results, they can find guidance to advance both results and reputation.
To start the discussion, how great is the variation? Penn, Schoen & Berland Associates; Landor Associates, and Burson-Marsteller (PSB, et. al.) recently released a report uncovering little correlation between consumer perceptions of corporate responsibility and the CRO’s 100 Best Corporate Citizens List. Sustainable Business Consulting compared six such assessments and found little similarity across them.
What’s driving the differences? PSB et. al. largely attributed this to communications, proposing that brands that topped consumers’ lists were those that communicated CR efforts more actively.
Considering other CR rankings, additional explanations emerge. Rankings aren’t created equally, but use self-defined rubrics aligned with the rater’s notions of corporate responsibility and factors they deem most important. (Ethisphere focuses heavily on ethics and governance for example.) These rubrics tend to be broad and complex, and tackled by reading through piles of CSR reports, websites, etc. Research from the Hartmann Group and others shows that consumers have fuzzy notions of CR, don’t dive into extensive CR reading and focus on personally relevant attributes (safety, packaging waste, energy use, etc.) when assessing companies.
Rankings also apply filters based on ownership (CRO uses the Russell 1000, public companies only), valuation (Global Pulse focuses on the largest 1,000 globally), and the like, resulting in incomparable candidate bases that consumers are unlikely to delimit themselves. On the flip side, professional rankings include many companies that aren’t household names, and that would thus fare low on consumer recognition, let alone CR. (Of note: PSB, et. al. did a breakout analysis of consumer-oriented CRO-list companies versus those in their study, and still found no significant correlation.)
Understanding these and other points places some paving stones on the path to progress.
Landor’s point about increasing communication around CR is on target and echoed by many professionals. Applying an integrated marketing approach, tapping multiple touch points, is a key for success.
Timing is of the essence for communications, as third parties are stepping up to share CR information directly with key stakeholders. GoodGuide.com provides product and brand CR ratings online and through mobile applications, and Walmart’s Sustainability Index will incorporate in-store labeling of a product’s lifecycle impact.
Communication must be strategic, just like any brand PR, designed to reach all key stakeholders using the modes and messages most relevant to each. Corporate reputation, like beauty, lies in the eyes of the stakeholder and each views business from a different angle. Industry insiders read CSR reports and websites to assess alignment with ideals and standards. Consumers scan packaging, mass media, websites and social network platforms, and are most concerned about what directly affects them.
In the early 1990s – before the Internet’s wide popularity – Makower mapped communication modes to stakeholders (see the chart below), providing an excellent template to update with new technologies and trends. The rubrics used – in particular third-party rankings and stakeholder insights work from the Hartmann Group, PSB and others -can help identify specific angles to articulate for each stakeholder base.
Granted, the talk must be matched by the walk, especially in the era of rising greenwash. CR strategies must be comprehensive, address material issues as well as widespread concerns like climate change, demonstrate long-term commitment, seek continuous improvement and go past activities that simply meet regulation, are driven only by cost savings or otherwise appear to represent little more than the status quo or self-interest. Companies topping various lists are quite likely to be good models to assess in identifying best practices for wider adoption.
At the same time, corporations should ensure any skeletons in the closet are put to rest, as negative reputation points can detract from sales and referrals.
Take-home point: Do good, then communicate well – both strategically – and benefits to business, reputation and the greater good will fall into place.