A responsible route to brand leadership

Alison Maitland is a business journalist and author who specialises in corporate responsibility, women in business, and leadership. She spent 20 years at the Financial Times, the last eight as Management Writer.

"The past year has seen a sharp escalation in the race for environmental leadership among big retailers, banks and other consumer-facing businesses.

Companies have been busily notching up environmental “firsts”, spurred by the business razzmatazz surrounding Al Gore’s film An Inconvenient Truth, the Stern report on the economic impact of climate change, and their own customers’ growing desire to see action.

BSkyB took the lead among media groups in going carbon-neutral, as did Marks & Spencer in the retail sector. Tesco, hard on the heels of M&S’ ambitious environmental “Plan A”, announced it would be the first supermarket chain to introduce carbon labelling for every product. In the banking sector, HSBC landed the high-profile Sir Nicholas Stern, author of the eponymous report, as its special adviser on global warming. The list goes on.

Brand differentiation – especially in highly competitive sectors - has become an important new motive for rolling out environmental initiatives. This is a welcome development, but it is not without pitfalls.

On the positive side, the investments big companies are making in new technology – such as “anaerobic digestion” to convert food waste into electricity – will give a boost to environmental R&D, spurring rivals and encouraging further innovation. If this is good news for the planet, why should we begrudge businesses if they use it to gain brownie points through their PR and marketing?

The trouble is that companies’ claims of responsible behaviour are not always genuine. In the race for environmental leadership, some are taking an easy ride on the bandwagon. They are too far back to become leaders, and are motivated more by fear of falling further behind the competition than by thoughts of brand differentiation.

This – and the fact that companies too often trumpet so-called achievements before they have anything worth talking about - feed media scepticism. Environmental and consumer pressure groups are watching the banks and supermarkets like hawks, eager to tell the media when they spot empty gestures, missed targets or other evidence of “greenwash”.

To stand up to scrutiny, companies need to be able to demonstrate a solid track record, and to have ready answers to difficult questions. Brand leadership through corporate responsibility will only work over the long term if it is built on sustainable, commercial programmes. If it is not, any competitive advantage gained over rivals will be short-lived.

Corporate responsibility is not just about the environment, of course, and there is a danger that social and human rights issues will be pushed down the agenda by the current emphasis on gaining green credentials. The companies that win and keep brand leadership in this area will be those that take a joined-up approach to behaving responsibly across the board. The leaders have already built responsible practices into the way they do business, treating this as a strategic priority, not an optional add-on.

HSBC, for example, declared its intention to become carbon-neutral back in 2004, the same year it made its creative decision to bring in an expert from WWF, Francis Sullivan, as an environmental adviser. Long before Plan A, M&S had built a reputation for sustainable sourcing and social initiatives such as work experience for long-term unemployed people.

Companies like these have solid foundations from which to claim the higher moral ground. That does not make them perfect. Nor does it make them immune from challenge, as M&S found when the media questioned whether the company’s continued use of a private jet was consistent with chief executive Stuart Rose’s decision to switch to an eco-friendly BMW. When challenged, however, they have a stronger position from which to respond."

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