Perception Versus Reality in Sustainability Performance

A new study casts doubt on the notion that corporations will improve their reputations by becoming more sustainable. The global study, by Brandlogic, a branding firm, and CRD Analytics, an ESG analytics provider, found that a group of companies increased their "real sustainability performance" but nonetheless suffered a decline in their reputations for corporate citizenship. The authors speculate that sustainability performance at many companies "has exceeded their ability or efforts to communicate this improved performance effectively." Alternatively, they posit, the reputational decline could be due to greater scrutiny and skepticism on the part of the public. Enhancing corporate reputation has long been an element of the business case for investing in corporate sustainability. This finding could weaken that case. Or it could be used to justify a shift in investment from improving performance to improving communication about performance.

When first conducted in 2011, and then again in 2012, the study found that social factors are twice as important as environmental or governance factors in determining perceptions of good corporate citizenship. The authors say this reaffirms the idea that "sustainability is bigger than 'green.' " But it also...

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