Green Corporate Policies Tied to Brand Strength

Companies’ environmental policies and reporting practices are among the sustainability factors most linked to brand strength, according to research by corporate social responsibility database CSRHub.

The research, part of a five part series, measures the relationship between 12 sustainability factors — individual components in CSRHub’s metric system — and brand strength.

In an earlier piece of the series, CSRHub found a strong link between brand strength and sustainability.

CSRHub says the research show that 11 of the 12 CSRHub subcategories have meaningful individual correlation statistics (see chart).  Only CSRHub’s human rights and supply chain measure seems to have no correlation with brand value.

Companies’ environmental policies and reporting practices scored a correlation of 0.17 with brand strength, landing that category well within CSRHub’s measure of a “strong correlation.” The training, health and safety category, which scored 0.18, was the only category to outscore environmental policies and reporting practices. The compensation and benefits category scored the same as environmental policies and reporting practices.

Other green CSR categories also showed a correlation with brand strength, but less so than environmental policies and reporting practices. Companies’ policies on energy and climate change scored 0.09, which CSRHub describes as a moderate correlation. Resource management scored 0.06 — a weak correlation.

The correlation score between sustainability categories and  brand strength grew from 0.19 to 0.28 from 2011 to 2012, and CSRHub expects the overall correlation to grow. Factors including more press coverage for sustainability matters from both major media outlets and the increase in sustainability-focused sites, outreach and advocacy from a wide range of non-governmental and governmental organizations, and the inclusion of CSR issues in MBA and other educational programs will all influence the growing correlation.

Automakers dominated Interbrand’s 2013 Best Global Green Brands ranking, published last month.

Toyota retained the top spot on the ranking for the third year running. Automotive brands account for four of the top five spots in this year’s ranking with innovation driving their success, according to the report, which evaluates and ranks companies on their environmental performance as well as the public’s perception of their green credentials.