Are the world’s biggest brands doing enough around the environment? It is a debate which will continue to rumble on. Yet for those of a more optimistic viewpoint, there are fears that organisations are not communicating their sustainable initiatives well enough.
When it comes to sustainability, the tech industry may be suffering from something of an image problem.
In November, YouGov published a survey which found more than half of consumers polled thought tech companies were not doing enough to minimise environmental impact. Only insurance and financial services providers and airlines polled worse.
It is not just the consumer who has this perception. Clim8 Invest, an ethical investment provider which shut down in 2023, steadfastly refused to touch big tech for its portfolio because, in the company’s own words, they didn’t believe the companies provided solutions to the climate crisis.
Yet there are plenty of headline-grabbing numbers available. Amazon claims to be the largest purchaser of renewable energy for the past four years, with a portfolio big enough to power 7.2 million US homes each year. Microsoft recently said that in the past financial year it had contracted more than five million metric tonnes of carbon removal to be retired over the coming 15 years.
The significant downside is in terms of carbon footprint – Microsoft’s CO2 emissions last year were about five times the amount of the city of Seattle – and whether these strictly fit the definition of ‘solutions’ is open to debate. But is there a gap between what is being done and how it is being presented?
A report from Brand Finance, in association with CSRHub and the International Advertising Association (IAA), concluded that there was. The Sustainability Perceptions Index based its findings from more than 150,000 respondents globally, as well as a formula which incorporates wider brand value, sustainability as a driver of consideration, and relative ESG weighting.
The result was that, according to Brand Finance, brands were ‘missing out on billions of dollars of potential value’. For sustainability perceptions value, the top 10 companies were exclusively tech or automotive. Tesla arguably straddles both. Tech companies filled the top three; Apple was top at a value of $33.3bn, ahead of Microsoft ($22.7bn) and Google ($22.5bn).
Yet the ‘gap value’ of these companies, determining how much was left on the table due to muted communication on sustainability, differed wildly. Microsoft had the highest gap value recorded at $3.2bn. Apple had a gap value of around half Microsoft’s, but in spite of that, the report noted consumers had ‘clear confidence’ that the company is minimising its negative impacts. Tesla, meanwhile, had a negative gap value, though it is worth noting that this is not a sign of success in itself; it shows that sustainability performance lags the public perception.
Read more: A guide for brands managing conflicting consumer emotions on sustainability
Since then, Microsoft has issued its most recent sustainability report (pdf), which disclosed, among other things, the aforementioned five million metric tonnes of carbon removal statistic. It ticks all of the boxes you would expect of a report from one of the biggest companies in the world: meticulous preparation; clear design; progress and review around clearly demarcated goals. But are these reports really hitting the mark?
Robert Haigh, strategy and sustainability director at Brand Finance, notes that things are getting better. “Traditionally, sustainability reports have been more compliance-based and internally focused, but that is changing,” Haigh tells Sustainability News. “Microsoft’s latest is an example of positioning sustainability as a growth driver rather than just a cost centre or risk to be mitigated.”
The message is certainly expanding for these reports, but can the same be said for the audience? Perhaps not. “Sustainability reports speak to a very specific stakeholder group,” says Haigh. “No matter how good the report is, companies need to identify and use other channels to reach employees, customers, and the general public, and to present information in a way that is more succinct and engaging.”
This can be easier said than done. As Meabh Quoirin, CEO of Foresight Factory, put it to this publication, consumers ‘don’t want to be patronised, and… a lot of the time… feel quite suspicious that people are saying these things and not really living up to it.’ The risk of brands being seen as engaging in greenwashing is now so great that they become more reticent – and are then accused of ‘greenhushing.’ Haigh notes the link between greenhushing and wider industry progress; if one company keeps its counsel, there is no incentive for a competitor to do better.
Sincerity and simplicity are therefore the key weapons in the brand’s arsenal. “For sustainability to become a true driver of your brand equity – in a believable, relatable and convincing manner – it needs to be simple,” wrote Sasan Saeidi, IAA world president and chairman in the report. “It’s an act that needs to break down the walls of complexity formed around this topic. It needs to use simple human language to explain complex mechanics.”
Haigh notes that breaking it down and quantifying sustainability initiatives is a ‘challenge’ – but through working with research firms, it can be done. “We identify the role of sustainability in driving customer choice; which brands are better perceived and more competitively positioned; and what the financial value of that advantage is,” he explains. “Precise responses require a lot of detail, which means brands should aim to work directly with researchers as much as possible.”
As difficult as it is, the alternative is greenhushing; and as Brand Finance puts it, that is ‘unsustainable’ – in both senses of the word.
You can read the Brand Finance report here (registration required).
Photo by Patrick Fore on Unsplash
