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Last October, the shareholders of Procter & Gamble, owners of megabrands such as Tide, Bounty, Crest, Pampers, Olay, Gillette and Downy, approved a proposal to publish a report on anti-deforestation measures. The Board of Directors had advised against approving the proposal. P&G uses a lot of forests. There are the brands Bounty (paper towels and napkins), Puffs (face towels), Pampers and Luvs (baby diapers), Always and Tampax (women care) and Charmin (toilet paper and towels). However, the Board of Directors underestimated the power of environmental protection among its shareholders.

P & G’s branded websites are all about sustainability, but environmentalists believe P & G needs to be more open about what they’re doing to conserve and protect forests. This is why shareholder voting is so important: Shareholders, including Black Rock and Green Century Equity Fund, want more transparency.

At the same time, the Swedish furniture company Ikea has launched a buyback program. In 26 countries, Ikea owners can resell furniture and receive an Ikea refund card with no expiration date. According to the New York Times, “the condition of the furniture determines the value.” Ikea will resell the items as used goods in a store area “as is”. Patagonia has been accepting used clothing for a while. The clothing brand has previously worn both items and items made from old clothing. The commitment to sustainability has always been a Patagonia virtue.

The increased power of sustainability

The power of sustainability, which some observers believed fell off the table when the coronavirus pushed Greta Thunberg into the background, appears to be gaining ground again as it redefines, reconfigures and redefines cities, economies, jobs and travel rebuild. Brands not only have the opportunity, they also have a responsibility to participate. Some brands already go beyond the commitment to performance in terms of sustainability.

The Wall Street Journal has just published its list of the “100 Most Sustainably Managed Companies in the World”. The purpose of this report is to “help investors and consumers find out how companies are doing environmental and social issues.” The Wall Street Journal compiled its list after reviewing 5,500 publicly traded companies around the world. The ranking of 100 companies reflects the assignment of a “numerical value from 0 to 100 for the overall performance of a company in 26 categories of sustainability, ranging from leadership and governance to community engagement and environmental claims.”

The editors of the journal report explain: “The methodology of the ranking takes sustainability into account on a broad basis and evaluates the management and governance practices of a company in terms of their ability to create long-term value for shareholders.”

At the top of the list is Sony. From his first day on the job, Sony’s CEO Kenichiro Yoshida announced a sustainability mission. Shiro Kambe, Sony’s chief sustainability officer, said, “In order for us to continue this type of business, the planet and society must be sustainable and healthy. Otherwise Sony cannot exist. “

Kering, the French luxury goods company (Gucci, Yves Saint Laurent, Balenciaga, Brioni, Alexander McQueen, Bottega Veneta and others), ranks 26th on the overall list and second on the list of “innovation leaders for sustainability”. As reported in the journal’s special report, Kering prepares an environmental profit and loss account in which the ecological footprint is assigned a monetary value. The data Kering uses showed problems with his goatherds – these goats are the source of Kerings Kashmir. Using his data set, Kering found that the way the goats were kept was damaging the Mongolian steppe. Kering worked with the Wildlife Conservation Society, NASA, and Stanford University to develop better approaches to herding. Kering says it can trace 90% of the materials used to make its high-end goods.

AB InBev, the world’s largest brewer, will now sell its beer in a low-carbon aluminum can. Already 70% of AB InBev cans are made from recycled aluminum. According to Bloomberg, the cans are now even more sustainable in a new partnership with Rio Tinto, the aluminum division of the Anglo-Australian mining and raw materials company. Michelob Ultra is the first beneficiary of the new cans. Speaking to Bloomberg, the CEO of Rio Tinto Aluminum said: “We can guarantee customers the origin of the product and provide transparency with regard to sustainability measures. That is why we will work with AB InBev on labeling and provide information to end users. “

Shareholders put strong pressure on Shell executives to overcome opposition from Shell’s CEO. Shell Oil must now set emissions targets and will link executive compensation to these metrics. Once again, shareholders surprised a company by making proposals on the transparency of the company’s role in climate change.

And then there is the Polestar 1, which the Wall Street Journal calls “The World’s Most Beautiful Hybrid”, a premium electric vehicle that is a product of the Swedish joint venture Volvo and Chinese Geely. According to the journal’s coverage, Polestar intends to take over Tesla with a battery-electric four-door Polestar 2 from the US. The current Polestar 1 is a PHEV (plug-in hybrid electric vehicle).

UBS, the giant investment banking and financial services company, is now running print ads saying it can help its clients by making the world and its clients’ portfolios more sustainable.

An interesting observation from the Wall Street Journal’s sustainability rankings is the brands that don’t make it into the top 100. Google, Amazon, and McDonald’s aren’t on the list, although these brands top most brand rating surveys. Facebook and Apple are on the list but are # 65 and # 68, respectively. Car brands are not on the list. Neither are cruise lines. And only one hotel group is on the list, but it’s not one of the mega hospitality chains: it’s Melia Hotels International, a Spanish company that is the 17th largest hotel and resort brand.

Brand decisions and sustainable leadership

Sustainable leadership and business practices influence customer branding decisions. In today’s environment, data shows that environmental decency significantly affects brand preference and purchase. Green policies and achievements go beyond sustainability and community reach and include improved treatment of employees. Sustainable business practices effectively promote brands without changing the perception of customer brands. Starbucks has just made a commitment to “promoting a culture of inclusion, diversity and equality,” as stated in a letter from CEO and President Kevin Johnson.

Other data shows that sustainability strategies lead to a competitive advantage. Brands focus on strategically leveraging social responsibility to gain competitive advantage associated with long-term financial performance. That’s not new. We’ll get the evidence. Research by the Journal of Services Marketing in 2013 found: “Brands with a proven commitment to sustainability have grown by over 4%, while brands without growth of less than 1% have grown.”

Now is the right time for brands to advocate sustainability. There is greater awareness of personal, social and global fragility as measured by the number of shareholders demanding better corporate behavior, better global citizenship, and facing the collision of natural disasters and Covid-19. As Deloitte, the global financial services company, reports in its 2020 Resource Study, one of the top three trends that could support continued growth in energy management is rising consumer sentiment and stakeholder pressures to address climate change.

Without a green wash, brands not only have to commit to sustainability, but also take responsibility for measures. The focus on sustainability is a consequence.

Contribution to Branding Strategy Insider by: Larry Light, CEO of Arcature

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