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Companies’ Sustainability Improves – But Reputations Worsen

AXA, Coca-Cola, Deustche Bank, EADS, General Electric and L’Oreal – companies that last year were not getting enough credit for their actual environmental, social and governance performance – have now earned reputations that match their relatively high sustainability achievements, according to a report by Brandlogic and CRD Analytics.

The 2012 study, which analyzes real versus perceived sustainability performance for 100 companies that collectively account for about 16 percent of gross world product, found corporations face growing skepticism among professional investors, supply chain officials and recent higher education graduates.

Last year, 66 of the 100 brands analyzed had perception scores ahead of their reality scores. This year, while 93 corporations increased their real performance scores over last year, and in some cases significantly, 68 of the companies saw a decline in their perception scores (SPS).

The report includes a Sustainability IQ Matrix (pictured above), a visual framework that plots each of the 100 companies across four quadrants: “Challengers,” “Leaders,” “Laggards” and “Promoters.” Leaders have relatively high performance and reputation; laggards show a relatively low commitment to ESG and low reputation; promoters are credited with ESG performance ahead of their actual achievement; and challengers do not get enough credit for their ESG performance.

Newly added companies SAP, Dell and John Deere entered the study as “leaders,” joining Dell, AXA, Coca-Cola, Deustche Bank, EADS, General Electric, L’Oreal, BMW and Intel.

The other three new additions – Barclays, Facebook and H&M – join their global brand peers as laggards.

Challengers, or companies that outperformed their reputations, include UPS, Citi, Shell, BP, ExxonMobil and Bank of America.

About one-fifth of companies increased their sustainability reality score (SRS) by more than 10 points and seven of these by more than 24 points on the 100-point index. These gains led to a significant nine-point rise in the mean SRS score of the 100 companies from 42.4 points in 2011 to 51.7 points in 2012.

In comparison, the mean score of the 100 studied companies on the SPS perceived performance index dropped almost three points from 47.2 in 2011 to 44.5 this year. Some 27 companies fell more than five points, with 12 of these declining more than eight points.

Twelve of the 2012 leaders who were in the same category last year slipped in their perceived performance. These were IBM, Colgate-Palmolive, Walt Disney, Abbott Labs, Novo Nordisk, GSK, ABB, 3M, Intel, Cisco, Accenture and Nokia.

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