By Cooper Swanson
Big companies certainly love to report on their sustainability and send out press releases about it. Does media attention for sustainability have anything to do with how a company ranks for its sustainability efforts? What about how sustainable it’s perceived to be by consumers?
You’ve probably heard of Fortune magazine’s lists of companies headquartered in the United States with the highest gross revenue, the most popular of which is the Fortune 500.
Many organizations also attempt to rank companies on their sustainability efforts – these rankings are not as straightforward due to inherent challenges in measuring sustainability. Because each sustainability ranking has its own methodology, it is often difficult to know which is the best or most accurate. In the end, the answer to this question often depends on the ranking’s audience and how the information will be used.
For the purposes of this study, I used the Boston College Center for Corporate Citizenship’s Corporate Reputation and Social Responsibility Ranking. I chose this ranking because, unlike many others, it does not try to determine which companies are the most sustainable, but rather which companies are perceived to be most sustainable and ethical, which gives us some insight into the consumers’ perceptions of the brands. I compared the 2011 version of the Fortune list with that of BCCCC’s, looking at the top 50 companies in each.
At first glance, each of these lists incorporates many of the companies that you would expect to see. Walmart is closely followed by many oil companies on the Fortune list. Johnson & Johnson and the Walt Disney Company did well on the sustainability list.
However, surprisingly, Publix Super Markets did the best in the BCCCC ranking, meanwhile Hewlett-Packard, along with several other companies that are usual suspects on sustainability rankings, did not even make the cut. This showcases that how the BCCCC ranking, and therefore consumer perception of brand sustainability, differ from most other rankings of corporate responsibility. Indeed, the BCCCC list intends to capture not only social and environmental sustainability, but also corporate governance and employee welfare. While most industries are similarly represented across both lists, there are substantially more food and consumer packaged goods companies on the sustainability ranking (18 compared to 4) with financial and oil companies filling in the difference on the Fortune list (17 compared to 4). Fourteen companies appear on both lists.
In order to compare the Fortune ranking with that of the BCCCC, I first looked at corporate communications on sustainability in the form of sustainability reports. Prior to this research, I assumed that companies on the BCCCC list would do much more reporting and probably would have been reporting for longer – how else would consumers believe them to be sustainable?
In fact, across each of the criteria that I evaluated for this study, companies on each list had similar levels of sustainability reporting. Thirty-nine companies on the BCCC list list have printable reports, the Fortune list included 38 reporters. Those with printable reports have been reporting for an average of 5.1 years – the average duration was the same for both lists. Twenty-nine of the 50 companies considered most sustainable and ethical by the BCCCC ranking use the Global Reporting Initiative (GRI) standards for their reports, with 27 of the 50 companies with the highest revenues following suit.
What does the media think?
Having seen the similarities between the two groups in regards to their own sustainability reporting, I looked for distinction in the media attention that they have received. I searched two databases of major publications: Business Source Premier (BSP) and LexisNexis, to essentially count how many articles each company returned for three separate searches.
Not surprisingly, the Fortune list returned approximately twice as many total articles in the BSP searches and 69 percent more in LexisNexis. As was also expected, when averaged across companies, the BCCCC list had a higher percentage of articles related to sustainability, as well as sustainability and ethics, in both databases.
However, when it came to sustainability, these differences in media coverage evaporated. When compared to the total number of articles for each company, the sustainability search returned an average of 2.35 percent for BCCCC and 1.96 percent for Fortune in BSP, while the LexisNexis search showed 7.79 percent for BCCCC compared to 7.58 percent for Fortune. Likewise, the search that included sustainability, ethics, and governance showed even closer similarities between the two groups.
There are, of course, limitations to this research approach, for example, there is no way to tell if the media coverage was positive or negative. Additionally, these searches only included major world publications – not blogs or other smaller outfits.
At the end of the day, there was a lot of similarity between the F50 and the BCCCC’s list in terms of media exposure for sustainability and levels of reporting. This is not to say that the two groups expend an equal amount of effort or money on sustainability initiatives or that they are equally successful in doing so, but that the communication around these efforts are similar in quantity. Given that the lists include such different players, this is an indication that consumer perception of CSR is impacted by more than just reporting and media attention.