Sustainability and its impact on corporate branding

Sustainability has become a central item on the leadership agenda of major corporations like never before. A diverse set of stakeholders, each with differing motivations, are measuring and monitoring corporate performance on environmental, social and governance (ESG) factors. Newly minted university students want to work for companies that have a social conscience. Customers – namely purchasing managers and some end-consumer segments – will do business only with firms that meet threshold standards for product safety, labor practices, and the like. And perhaps most important, institutional investors are examining ESG performance factors as a way to locate hidden value and identify sources of potential risk.

Corporate executives now realize that incorporating sustainability/ESG factors into their brand and communications practices is a requirement for successfully winning over these key audiences. Ignoring or being less than transparent about these stakeholders’ concerns may create substantial risk to the firm’s reputation.