Research conducted by a leading valuation firm – Brand Finance – in collaboration with CSRHub and the International Advertising Association (IAA), unveiled that global brands may be losing out on billions of pounds by inadequately communicating their sustainability efforts. This should act as a reminder to SME’s that there are similar implications if you don’t bridge the gap between sustainability and marketing.
The Sustainability Perceptions Index analysed responses from over 150,000 participants across 40 countries, delving into the role of sustainability in consumer choices, identifying brands perceived as most committed to sustainability, evaluating the financial value linked to a sustainability reputation, and quantifying the potential value at risk, or to be gained, by addressing the gap between sustainability perceptions and performance.
Top performers & missed opportunities
Apple emerges as the leader with the highest sustainability perceptions value, amounting to USD33.3 billion. Driven by both financial scale and positive consumer perception, Apple exemplifies how strong sustainability perceptions contribute to brand loyalty and premium product pricing.
Microsoft, holding the second-highest total value at USD22.7 billion, possesses the largest ‘gap value’ in the index — USD3.2 billion. Despite robust sustainability commitments, Microsoft’s communication efforts fall short, suggesting that a more concerted approach could add significant shareholder value.
Value left on the table
The study identified a common trend among major brands, leaving substantial value untapped due to muted communication on sustainability. A total of 85 organisations exhibited a positive gap value of over USD100 million, amounting to USD25 billion.
While Tesla enjoys a positive image as an environmental sustainability pioneer, the study highlighted a potential risk. Despite being perceived as highly committed to sustainability, Tesla’s actual sustainability performance falls short, posing a USD1.5 billion value at risk.
Brand Finance’s Strategy & Sustainability Director, Robert Haigh, also underscored the challenge for brands to strike a balance in sustainability communication. Haigh warns against “greenhushing”, emphasising the need to…
avoid overly cautious or restrictive approaches that may lead to missed financial opportunities.
Bahar Gidwani, Cofounder and CTO of CSRHub, emphasised the study’s importance for corporate strategists and brand managers – a valuable tool for us here at Stratagem, in order that we can apply our learnings to your business efforts. The transparent access to consensus ESG ratings data provided by CSRHub aims to help companies like yours to enhance their corporate ESG performance and unlock full value potential.
Dagmara Szulce, Managing Director, IAA Global, sees the study as a powerful tool to incentivise businesses towards sustainable actions aligned with UN Sustainable Development Goals (SDGs) and the broader aims of the UN Global Compact. With our guidance, these 17 broad goals can be adapted and applied to businesses like yours operating at a local, regional or national level:
For example, Goal 2 – Zero Hunger. We can work with you on CSR & marketing campaign to support local food kitchens, or grocery deliveries to the most vulnerable / isolated / physically impaired.
By highlighting the financial value linked to sustainability perceptions, this study and others like it are aiming to motivate businesses beyond viewing sustainability as just a ‘tick box exercise’.