Perception Is Reality Except for Green Business

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I read a very interesting report recently about differences between the way the public perceives the "greenness" of companies and the reality of their green activities according to some "objective" scale. The report is the second published by Maddock Douglas, a Chicago-based business consulting firm. Here is the preamble to the report.

A sustainable image can be a brand’s best source of competitive advantage. Although there are benefits to adopting sustainability measures for other reasons (efficiency or compliance, for example), building sustainable consumer-facing brands can provide real differentiation in increasingly commoditized consumer product / service markets. Change’s first MapChange study in 2008 showed a significant difference between brand perception and product reality. Consumers thought certain brands were sustainable when they actually weren’t, while other brands weren’t considered sustainable, when they really were. This year we wanted not only to profile the difference between actual and perceived brand sustainability, but how the brands in question measure up against their direct competition.

The key finding from the survey was: "Across every sector, MapChange shows a disparity exists between the actual sustainable activity of brands, and consumers’ perception of sustainable activity of those brands." Some of the 10 industrial sectors scored higher as a group on the reality side of the ledger, labeled as brand sustainability. Reality was measured by the company's score in the Climate Counts newly released 2010 corporate climate scores. This index is limited to climate change and leaves out much of what is considered green today.

I looked at all the scores and couldn't make much sense of them. Neither, apparently, could the person in charge of the study. The New York Times published a story about the report that included excepts from an interview with Marc Stoiber, vice president of green innovation at Maddock Douglas. He couldn't explain why Wendy's had a moderately high perception rating (64), the highest in the food group, ahead of MacDonald's and Starbucks, but one of the lowest actual rating (2) of all companies in the survey. Only SkyWest Air (0) and Regions Bank (1) scored lower.

I think this whole exercise is off base. It is conceptually flawed as it uses a very narrow index of sustainable performance, based only on climate change. Not surprisingly, transportation companies have lower scores, in general, than do household products. On the other side of the ledger, the brand perception is based on a broad assessment of a firm's total commitment to sustainability, whatever that means. And that is the second big problem. Branding is a very imperfect and distorting process for depicting sustainability or greening. Each company will point to that set of factors that allows it to make the broadest claims. My reading of the whole survey is that the public is very confused about sustainability and that the way to help them is not through branding. From a sustainability perspective, it matters not at all whether Southwest Airlines is perceived to be at the top of its peer group. What matter is that consumers understand that airline travel is very bad for climate change relative to other modes of travel. Branding may give Southwest an advantage, but ignores the needs of the world out there. The survey is little more than a great selling pitch for advertising and public relations firms.

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1 Comments

marc stoiber said:

John,

Great article. Always appreciate candor and constructive criticism. Truth is, MapChange was created as an insight and guide to companies looking at the dizzying array of sustainability measures they could incorporate - and debating which to incorporate first. Our thinking was, if a company implemented sustainability measures that consumers understood, appreciated and rewarded, that company may realize a brand advantage...which might hasten their drive to adopt more and more sustainability measures.

To your point about measuring only climate-focussed actions to derive the 'actual' scores, I agree that it doesn't present the full picture. However, it does present a good baseline. If a company measures its climate impact, declares that impact, adopts measures to lessen that impact, and reports its progress, we believe that shows a level of engagement that probably bodes well for engagement in other areas of that company's CSR efforts. So is it a perfect measure - no. Is it a decent measure - yes.

To your point about being confused about why companies that hit low 'actual' scores did well in perception, while companies that had high 'actual' scores scored badly in perception, we had some clues. But given the mandate of the study - to go broad, not deep - more questions were raised than answers given. We are actually planning a far deeper study at present that should present a fuller understanding of consumer motivations.

On your final point about the study being a sales vehicle for ad agencies, it could be perceived as that IF we only showed companies that could improve their perception scores. But we didn't. There is a case to be made for companies with low 'actual' scores to assess which sustainability measures they're implementing. There's a case for companies with high perception and actual scores to accelerate their wins. And there's a case for companies with low actuals and perceptions to get started, before their competition leaves them behind.

Hope these thoughts help answer some questions. Would be happy to chat further. You can get me at marc.s@maddockdouglas.com