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2012 SUSTAINABILITY LEADERSHIP REPORT

MEASURING PERCEPTION VS. REALITY

Learn from
the Leaders

2012 Sustainability
Leadership Report

MEASURING PERCEPTION VS. REALITY
FOR 100 PROMINENT GLOBAL BRANDS

Meet the sustainability Leaders

Each year we examine 100 prominent global brands for our report. The select group shown here are Leaders that excel in both real sustainability performance and stakeholder perceptions. Six Challengers from 2011 are new to the Leaders category this year– read on to find out how they got there.



  • 3M
  • ABB
  • Abbott Labs
  • Accenture
  • AXA
  • BMW
  • Cisco
  • Coca-Cola
  • Colgate-Palmolive
  • Danone (Dannon)
  • Dell
  • Deutsche Bank
  • EADS (Airbus)
  • Ford
  • General Electric (GE)
  • GlaxoSmithKline
  • IBM
  • Intel
  • John Deere
  • Johnson & Johnson
  • L'Oréal
  • Microsoft
  • Nestlé
  • Nokia
  • Novo Nordisk
  • Pfizer
  • Philips (electronics)
  • Samsung
  • SAP
  • Siemens
  • Volkswagen
  • Walt Disney

Six new Leaders

To gain an advantage, a company needs to do more than perform well on sustainability. It needs to communicate its commitments and achievements. That’s the real key to influencing those who make decisions based on sustainability. Read on to learn more about six companies that have seized the opportunity and risen to Leader status this year.

AXA

With a perception score rise of 4.5 points over 2011, AXA achieved something matched by only one other company this year (GE, another new Leader). Large positive shifts in perception from last year across each dimension of sustainability were achieved among investment professionals and purchasing managers, more than offsetting a decline among graduating students. The largest increases were recorded in developed countries.

Deutsche Bank

Investment professionals gave the bank ratings well above the study mean with double-digit increases on all three E, S and G dimensions. A large gain (9 points on average) in perceived governance performance across all three stakeholder segments led to the bank’s overall increase in perceived performance.

GE

GE's perception scores increased across all E, S and G dimensions and all stakeholder segments. The largest increase was on the environmental dimension, which corresponds to improved real environmental performance. The GE advance to the Leaders group is particularly notable as it was achieved despite perceptual changes running in opposite directions in developed versus newly developed countries.

"At GE, we are committed to continuing to raise the bar. Through our ecomagination initiative we've established a global presence while remaining a very local partner for our customers. The ecomagination portfolio today includes more than 140 products and services, generating $105 billion in revenue."
– Mark Vachon, Vice President ecomagination, GE

Coca-Cola

Improved perceptions boosted the company’s environmental score significantly with investment professionals. Its governance score also rose considerably among graduating students, predominantly in newly developed countries. Perceptions did take a significant hit among purchasing managers when compared to last year, especially on the social dimension. Even with this decline the company’s perception score was still above mean.

EADS (Airbus)

The aerospace company’s ascent into the Leaders quadrant was largely the result of holding steady against the general downward pressure on perceived performance scores. It was the significant improvement of perception among investment professionals on all three E, S and G components that pulled its perception score above the mean.

L'Oréal

A steady perception score was due to improved results from graduating students and to some degree investment professionals, offsetting declines among purchasing/supply professionals, especially on the social and environmental dimensions.

"We understand the value of engaging stakeholders and have increased our efforts to share and communicate our vision for sustainable, responsible and inclusive growth."
– Pamela Gill Alabaster, Senior Vice President Corporate Communications, Sustainable Development & Public Affairs, L'Oréal USA

Five things that Leaders do well

Some forward-thinking companies are leading the charge both in real sustainability performance and in the minds of stakeholders – building a bridge between sustainability and their corporate brand.

How are they doing it? Find out by downloading Keys to Sustainability Leadership – Five Best Practices, Brandlogic’s free executive report, based on original research of 100 prominent global brands.

Brandlogic Sustainability
IQ Matrix 2012

In 2011, we introduced a powerful new tool for sustainability and communications executives: Sustainability IQ. It represents a valuable methodology and framework that guides strategic decision making on a global scale.

The Sustainability IQ Matrix plots both real and perceived performance for 100 prominent global brands, revealing the opportunities – and risks – tied to sustainability communications.

Focusing on industries

We've made it easy to compare companies' Sustainability IQ ratings by sorting our 100 prominent global brands into their Global Industry Classification Standard (GICS) categories. The Report covers 9 of 10 GICS categories, and each chart has both current data and results from 2011 to show movement over time.

Consumer Discretionary

This diverse category spans cosmetics, food service, apparel, automotive and consumer electronics. L’Oréal was a standout, moving up into the Leaders category. All of the companies improved their real performance, with McDonald’s, Avon, Starbucks and Ford as real standouts. In perception, only four saw improvement - Avon, McDonald’s, Starbucks and Toyota.

Consumer Staples

Covering beverages, mass retail, food manufacturing and personal care, this category had five companies that achieved real performance score gains above the study average gain of 9.3 points: Coca-Cola, Heineken, Kellogg's, PepsiCo and Walmart. Only two, however, achieved perceptual gains: Heineken and Tesco.

Pharmaceuticals/Healthcare

Every one of the companies in this category experienced a drop in perceived performance this year, with the biggest decliners being Abbott Labs, Merck, GlaxoSmithKline and Bayer. Merck also stood out as the only company in this year’s study that had its real performance drop – although that could be more apparent than real as it may reflect 2012 reporting gaps rather than actual performance deterioration.

Industrials and Transportation

This category includes: industrial equipment, products and engineering, machinery, aerospace, airlines and delivery services. Standouts include EADS and GE, which both became Leaders. American Airlines showed very strong improvement in real performance, though all airlines still score well below the mean. UPS is also notable for having one of the top three real performance scores in the entire study. Its competitor FedEx had real performance 50 percent below UPS, but leads in perception.

Information Technology

This category includes computers/IT services, software, semiconductors and office equipment. Of the 14 companies included in both study years, only three increased their perceived performance, though all increased their real performance. This category includes some standouts: IBM, with the highest real performance score in the study; Xerox, which had the largest gain in real performance; and Apple, showing the study's highest perceived performance score despite real performance still below the mean.

Telecom and Internet

Covering telcos, Internet companies and makers of telecommunications equipment, this category stands out because of poor real performance. Three of the five lowest scoring companies in the entire study are here. All four Internet companies – Amazon, Facebook, Google and Yahoo – score at or near the bottom in terms of real performance. Facebook has the lowest real performance score amongst the 100 companies followed by Amazon with the second lowest score.

The new standard

The Sustainability Leadership Report is the only study of its kind. It introduced the concept of comparing real and perceived sustainability performance across multiple dimensions – environmental, social and governance. It also uniquely includes the perceptions of three "highly attentive" stakeholder segments crucial to corporations' success – investment professionals, purchasing/supply professionals and graduating college/university students.

In 2011, the inaugural study set what has become an accepted benchmark. The 2012 report builds on it, with more industry coverage and industry-specific year-on-year comparisons.



Download the 2011 Report

Our methodology

Comparing real performance to stakeholder perceptions uncovers opportunities and risks in a way that single-dimension rankings cannot match. The comparison highlights the critical role of brand communications targeted at those who make critical decisions based on sustainability perceptions.

Our methodology uses two indices – the Sustainability Perception Score (SPS) and the Sustainability Reality Score (SRS). When plotted, these scores place a company in one of the four quadrants of the Brandlogic Sustainability IQ Matrix℠

Sustainability Reality Score (SRS)

Objective data provided by CRD Analytics, the creator of the NASDAQ Sustainability Index, is the basis of the Sustainability Reality Score. The SRS is based on five key performance indicators for each ESG factor, with a total of 141 performance metrics. The source data were drawn from CRD Analytics' proprietary SmartView® 360 platform and database. The raw score was then mapped to a 100-point scale to allow comparison with the SPS ranking.

(For more detail on SPS and SRS, and other statistical information, visit our Research notes page.)

Sustainability Perception Score (SPS)

The Sustainability Perception Score was calculated from the results of our proprietary Brandlogic Corporate Sustainability Brand Perception Survey, covering three highly attentive stakeholder groups in six countries: investment professionals, purchasing managers and graduating university students.

The survey asked each stakeholder group a series of questions covering a comprehensive range of ESG topics. For each statement, respondents were asked to rate up to seven companies. The raw score was then weighted and mapped to a 100-point scale to allow comparison with the SRS ranking.

(For more detail on SPS and SRS, and other statistical information, visit our Research notes page.)

About Brandlogic

As the leading independent branding firm, Brandlogic's mission is to help create Ideas that Drive Performance. We are taking a leading position in sustainability as it relates to brand, helping clients link their brand strategies and reputation-building efforts to their sustainability commitments.

For more information

Denis Riney
877 565 2255 x331
riney@brandlogic.com
brandlogic.com

About CRD Analytics

CRD Analytics is a leading provider of independent sustainability investment analytics. Using its proprietary SmartView® 360 Platform, CRD Analytics empowers its clients with actionable and performance-driven information distilled from large sets of complex data including 200 financial, environmental, social, governance, brand perception and reputational risk indicators. At the core are the Global Reporting Initiative’s (GRI) G3/G4 Guidelines.

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