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October 19, 2008

Reports Study Actual, Perceived Corporate Social Responsibility Scores

Google, Campbell Soup, Johnson & Johnson top the 2008 Corporate Social Responsibility Index (PDF), a new ranking of the top 50 companies in the U.S. that the public distinguishes for corporate social responsibility released by the Boston College Center for Corporate Citizenship and Reputation Institute.

Rounding out the top 10 are: Walt Disney, Kraft Foods, General Mills, Levi Strauss, UPS, Berkshire Hathaway and Microsoft.

The ranking was created using data principally collected for Reputation Institute’s 2008 Global Pulse Study. “Although the survey was taken before the Wall Street collapse, the U.S. findings show that corporate governance-ethics and transparency-are increasing in their importance to overall corporate reputation,” said Philip Mirvis, senior research fellow for the Boston College Center for Corporate Citizenship.

On a scale of 1-to-100, top-ranked Google scored 80.84. With the exception of Berkshire Hathaway, consumer-oriented companies made up the majority of the top 20 CSRI performers. Only a few business-to-business focused companies were included in the top 50: Cisco Systems (70.96), Sun Microsystems (70.70), Express Scripts (70.32), Deloitte & Touche (70.12) and Boeing (69.88).

The general public tends to rate makers of consumer products, computers, and beverages higher along social dimensions. Industries that fall below the global average include construction/engineering, finance, utilities and telecommunications.

According to the report:

• Companies who have invested in a strong social responsible profile get a much higher level of support than other companies.
• 65.7 % of the U.S. general public would recommend the Top 20 socially responsible companies to others compared to only 25.9% recommendations for the bottom 20 companies. And more than 27% would not recommend the companies that are not seen as social responsible.
• In a time where ”word of mouth” recommendations is a top driver of business success this is a critical area for companies to improve.
• Focusing on social responsibility as well as overall reputation is a direct way to improved business success.

Another report, MapChange 2008 (download), from Change, looks at how committed the top brands in Canada are to the environment – and how committed consumers think they are.

The study produced some interesting results. Most notably that better action doesn’t equal better perception.

In general, there is a randomness to the findings that suggests very few brands have successfully branded sustainability.

• Brands like GM and Molson have not been lauded for their sustainability efforts, and their perception scores reflect that. Yet both out-performed Toyota (whose perception score was by far the highest) in actual sustainability.
• A halo effect appears to be evident with companies like Apple. While their actual sustainability score ranked fourteenth, their perceived sustainability was fifth. The popularity of Apple’s recent products could be resulting in a general positive perception of the company, including that of their environmental commitment.
• The opposite also appears to be true. Companies that have had some past public image problems seem to have difficulty overcoming those perceptions. Nike ranked seventeenth on perceived sustainability, despite being fifth on actual sustainability.
• There also appears to be a blanket effect in terms of  Corporate Social Responsibility, with consumers ranking brands with strong community programs high on environmental commitment. Despite scoring low on actual sustainability, Rona and Canadian Tire both scored high on perceived sustainability.
• There is evidence that companies with consumer-facing green products perform better on the perception side than those whose sustainability efforts are not expressed in their product lines. Toyota, Loblaws and GE all ranked within the top four on perceived sustainability, and all have strong green consumer brands, with the Prius, the “Green” line, and Ecomagination products respectively.
• A larger proportion of brands scored high on planning than did on performance. In planning, eight brands scored 80% or higher, whereas only two brands in performance managed that feat, GM and GE. Many brands have just recently started to address environmental sustainability, so this observation is not a surprise. We would expect to see higher performance scores in coming years.
• Consumers view most brands negatively regarding their environmental commitment. Only four of the twenty brands managed a positive perception score.

According to Change, communicating sustainability needs to be done carefully to avoid greenwashing, but it can still be done. Consider these tips from the report:

Be fully transparent. Even if you’re not achieving as much as you could, or should, consumers will appreciate transparency. Modestly stating your successes and highlighting areas to improve will help garner consumer support. Conversely, hiding from the spotlight only makes consumers assume the worst.

Encourage an open dialogue. Companies like Patagonia have had great branding success by encouraging an open dialogue with their consumers. Help your consumers lead you towards sustainability by inviting their input and feedback. They’ll feel a part of your success and be more willing to support you.

Silence is too modest. The fear of greenwashing has caused many companies to keep their sustainability efforts to themselves. While modesty is a good trait, silence is too modest. Consumers need to know what you’re doing so they can get involved, make informed decisions, and reward values that match their own.

Make it an easy get. The companies that have been most successful with green branding are those who’s efforts are tangible for the consumer. It’s great to have a factory that runs entirely on solar energy, but the consumer is only going to see the product that comes out of it.

Green is secondary. Communicating the green features of your products can help differentiate you from the competition, but it’s a rare consumer that will buy green for green. Consumers expect your product to compete on price, quality and convenience first. Once they know it does, then you can talk about green.

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