This analysis of the top 612 publicly traded companies reveals that while the conversation around responsibility is now in full flight, the words, for the most part, are well ahead of the deeds. The contrasts speak for themselves.
2/3 companies say they are working to reduce emissions, yet only 1/3 have set any target deadlines and only 32% of companies have formal oversight of their sustainability performance. While 52% of companies are engaging with investors on sustainability (making it an increasingly important part of the investor brand story) and 58% have codes of conduct that address human rights issues, only 14% of companies have formal programmes that invest in and promote sustainable products and services and 33% have established engagement with suppliers on sustainability performance.
Actions don’t align with commitments
This disparity between the commitments companies are articulating and the operational changes they are making to fulfil those commitments suggest that while brands are acting, they are not acting fast enough. If companies were to monitor and deliver on their financial performance this way there would be an outcry in the markets and from shareholders. Yet for the moment at least, this report implies that guidance on responsibility metrics, or rather for many the implied commitment (given the relatively low formal oversight), is distorted.
That in turn points to a wider issue that seems timely to discuss – the critical inter-relationship between trust and proof. In a world where brands feel compelled and/or are increasingly expected to articulate a position on issues that are important to their buyers, it must be tempting to state an intention and wait for the facts to catch up. It must be tempting too to proffer any sign of progress as “proof” that good and worthy work is being done to close historic gaps. In essence, companies want consumers to kiss the frog. (OK, they’re toads in the image, but you get the idea.) Brands are looking for trust that, in the years ahead, they will indeed be as good as their sustainability word. Everything will be beautiful in the end.
Proof without trust leaves just data. Trust without proof leaves just hope
Whether one should see this as asking for time or stalling for time is moot. Proof is often premised on the persuasive power of facts and numbers to indicate progress. Trust is premised on a record of integrity and consistent actions. Proof without trust leaves just data (that can often be manipulated to mean whatever is convenient). Trust without proof results in just hope (based on strategies and reassurances).
Reputation, in perhaps its most simplistic interpretation, is about earning and attaining trust by providing proof that matches intentions. To do that effectively, companies need three things:
- They need to have a stated sustainability goal that is as robust as their financial goals.
- They need to know the levels of trust they want to achieve – which means they need to know who needs to trust them and what those people need to be able to specifically trust them for. (The answer is not “everyone” for “everything”)
- They need to identify and action the proof points that ratify those trust objectives, meaning they need to show not just what is being done but how those actions are being actively managed so that more will be done.
My take-outs from this report are that companies are good on the first point, somewhere between average and confused on the second point, and sadly lacking on the final point.
Photo of “Old World, Meet New World”, taken by Matt Reinbold, sourced from Flickr