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Green Brands: Balancing Performance and Perception

Green Brands: Balancing Performance and Perception

A Conversation with Emma Hrustic

Do companies with better brand strategies get more credit for being green than the companies with the best sustainability strategies? Well, maybe, but Interbrand’s Best Global Green Brands report tries to correct for this by weighing perception and performance in ranking the world’s top brands for sustainability.

As a follow-up to our article, What is a Meaningful Brand? I sat down with Emma Hrustic, Interbrand’s Global Director of Brand Intelligence, and one of the creators of Interbrand’s Best Global Green Brands Report, to talk about the insights and impacts from this three year-old sustainable brand ranking system.

Interbrand’s methodology is unique. It starts with its latest Best Global Brands list of the world’s most valuable brands, which are assessed and ranked according to their combined scores on sustainability performance based on 83 individual metrics via Deloitte as a neutral third-party. The sustainability perception separately assesses the Best Global Brands by surveying 10,000 customers across 10 countries.

To combine the performance and perception analyses, Emma and her team assess the difference between brands’ performance and perception to come up with their “gap score” (the performance score minus the perception score). Positive “gap scores” indicate that the company is not getting as much credit from customers as it deserves from the sustainability work it is doing. Negative “gap scores” mean that brand perception is stronger than the company’s actual green performance. (See more on the report and methodology here.)

The result: an innovative measuring stick that advances the dialogue on sustainability branding across industries. For more thought-provoking conversation on sustainable branding, check out Emma’s recent conversation with Yale School of Forestry and Environmental Studies faculty Brad Gentry and our conversation below:

Q: How have reactions to the report among your clients and the companies ranked changed over the past three years since Interbrand started publishing this report in 2010?

A: In the beginning, a lot of conversations were just around trying to understand what the report means. Brands were curious and interested, but that was it. Last year, we really saw companies wanting to learn from the study. They started to think more about what they are doing, how they are reporting it and how they are communicating about it in the marketplace. The conversations have matured and brands have started to rethink not only sustainability strategy, but also brand strategy. They are now thinking more heavily about where sustainability fits into their brand as a whole.

Q: There are several companies working on ranking systems related to sustainability and branding right now. What impact do you expect this trend to have on both companies and customers over the next few years?

A: I am hoping for more dialogue and I think that it is already working. It is a topic that we are talking about more seriously than we did in 2010. We are looking for more transparency and better integration between what brands are doing and how they are talking about themselves.

Q: All of the top three Best Global Green Brands have negative gap scores, indicating that they are being given more credit than their actions merit. What patterns do you see in the ways these companies are communicating with customers about their work in sustainability that has allowed them to capture so much additional brand value from their environmental initiatives?

A: All of the top three brands happen to be automotive brands; they have all been very clever in picking a hero product to stand for sustainability. Toyota, the number one brand, has the Prius. Nissan has the Leaf. Ford is focusing on the Eco-Boost engine which is about efficiency and savings.

By creating a hero product, these brands make it easier for consumers to attach associations of sustainability to the brand. Sustainability claims then become more tangible than many companies’ claims that they are making incremental improvements across all of their operations. In order to get the maximum credit, it is important for brands to connect the dots for the consumers.

Q: The Best Global Green Brands Report identifies the top 50 sustainable brands out of the 100 Best Global Brands. What does this say about the brands toward the bottom of the list? Should they really be considered “green” brands?

A: Part of the logic of using Interbrand’s 100 Best Global Brands as a sample was that these are the companies that are extremely smart about branding already. We wanted to see how they are performing on sustainability.

The goal was not simply to give a gold star to Toyota. The goal was to learn how these companies that are managing their brands in a really smart and valuable way are tackling sustainability.

To that end, we wanted to measure and evaluate as many brands, across as many industries, as we could. We actually evaluated about 80 from the top 100 Best Global Brands. We didn’t rank all of the top 100 because it is difficult to decouple the corporate brand from the product brand.

Q: Do you think the fact that there are companies that are getting more credit than they actually deserve can dis-incentivize companies to actually do more?

A: I think there are two different categories of brands that might have a negative gap score. There are those that do a really great job of branding themselves overall and get higher perception scores because people assume that they do more than they do, even if they don’t actively promote things that are not in line with their actions. Then there are brands that are more comfortable with greenwashing and are more willing to actively promote more green behavior than they actually engage in.

I think the cumulative effect is creating an overall sense of cynicism. Across markets we found that a good 30 – 40% of respondents in each of the markets say they don’t fully trust the information that comes from companies when it comes to the environment.

I think the more we learn and the more dialogue there is, the better. Every time a brand is exposed for a claim that is not fully true or for problems in its supply chain that it chose to ignore, we all start feeling like, ‘Oh, OK, so these great stories you told us are not the whole story.’ But I think these things are being taken more and more seriously and the increased level of dialogue around it will cause it to happen less and less frequently.