As sustainability begins to inform business decisions more and more, it’s important to note how it is increasingly shaping brand perception and equity across stakeholders.

Company stakeholders have always kept a close watch on the business reputation of an organization based on its actions and decisions. Brand perception is a fundamental aspect of value and equity from the perspective of both investment allocation and consumer purchasing decisions.

Today, we seek to understand how brands and organizations walk the fine line between communicating sustainability achievements and their goals, while avoiding greenwashing at the same time.

Communicating sustainability efforts

When it comes to comprehending how brands can communicate their sustainability achievements while avoiding greenwashing, Robert Haigh, Strategy and Sustainability Director for Brand Finance, said there is no right or wrong answer. He explained it’s key for brands to be as holistic as possible with their communication

“It’s incredibly important to avoid greenwashing because it’s corrosive to trust—both for the brand and for sustainability claims,” said Haigh. “The answer is also to not cease all communication around sustainability, because that leaves value on the table for that brand.”

What we want, according to Haigh, is to create a peer pressure environment where brands are communicating openly to encourage each other to do more.

“The answer is to be as holistic as possible with your communication,” said Haigh. “You don’t want to selectively communicate about one good thing that you’re doing because that leaves you open to accusations of deflection. It’s important for brands to communicate what they have achieved, what they plan to achieve and what they haven’t quite achieved yet.”

The Director for Group Marketing and Corporate Affairs at Old Mutual, Maserame Mouyeme, added: “There's information democracy, and because of that, companies need to be responsible for what they say in the market and how they say it.”

Long-term decisions for brands

Brands will strive to meet short-term and quarterly reporting goals with respect to sustainability, but long-term plans especially can help benefit a brand’s perception.

At Old Mutual, Mouyeme said that within their investment business, they encourage their investors to start thinking about green bonds and reduce their involvement in coal. Additionally, signing up for global movements and publicly declaring a desire for transparency are long-term goals set by Old Mutual that are also viable options for other brands hoping to improve their sustainability measures.

“We're also showing commitment to the net zero alliances, both as an asset owner and an asset manager. Those are big commitments, and we hold ourselves accountable to executing what will be in our 2022 climate report for the long term,” said Mouyeme.

Santhosh Jayaram, Global Head of Sustainability at HCLTech, provided examples of long-term decisions that brands can make regarding sustainability: “HCLTech has declared that we will be going net zero by 2040, and that by 2030 we will reduce our absolute emissions by 50%. We at HCLTech believe that the convergence of digital tech and sustainability is going to be the biggest driver going forward.”

Further, HCLTech has come up with a school for sustainability that is open to all 220,000+ HCLTech employees, empowering them to be agents of change as well. “It’s very important to create that ecosystem, because when you make employees change agents, it is not just them. It is their community and the clients with whom they interact,” said Jayaram.

Redefining the quantification of brand equity

The current process for quantifying brand equity is working, according to Haigh, but constantly tracking factors that shape perceptions and brand images is “key to evaluating brands.” To help with these efforts, Haigh discussed Brand Finance’s new measurement index.

“It’s very important to realize that sustainability is coming up the agenda and that’s why today we launched our Sustainability Perceptions Index to highlight the value tied up in sustainability perceptions,” he said.

In association with the International Advertising Association, the index determines the relative importance of sustainability as a driver of value for brands—while also evaluating how sustainable each brand is perceived to be—by allocating a Sustainability Perceptions Score to each organization.

“Those that are prepared to make a big investment in building sustainability in their companies are the ones that are going to win,” said Mouyeme.