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FTSE commitment to responsible business must avoid perception of ‘greenwashing’

Populus analysis has found that 85% of FTSE 100 businesses explicitly refer to sustainability, corporate responsibility or similar issues on the front page of their corporate websites. In fact all but one include a page on such topics accessible within one click.

Figure 1: 34 FTSE 100 companies use a ‘Sustainability’ heading on the front page of their corporate website, and 18 use a ‘Responsibility’ heading. The size of the words in the graphic below reflects the frequency of the heading type.

While we make no comment here regarding the quality or authenticity of the pronouncements featured on the websites (though some are impressive), there is, clearly, a commitment from large businesses to increase the visibility of sustainability pledges. The pledges are granted prominent positions on corporate websites and are often the focus of public statements by senior management.

These large businesses have spent – and continue to spend – considerable amounts of time and money assessing, fulfilling and communicating their commitments. See, for example, the Unilever Sustainable Living Plan, or M&S’s Plan A, Sky’s Bigger Picture, or Sainsbury’s Sustainability Plan.

But all that time and money needs to be utilised effectively and efficiently. While some might claim that they are doing the right thing for the sake of it, in reality most of these sustainability commitments have to have a positive commercial impact on the business – whether by winning over regulators and stakeholders, attracting talent, or winning customers.

Crucially, therefore, firms need to avoid the common complaint of ‘green-washing’. Stakeholders, shareholders, employees, future employees and customers alike need to regard the company’s commitment as authentic in order to be vaguely impressed. In Populus’s 2016 research – conducted for DLA Piper – into the views of politicians and business leaders towards trust in business (which can be viewed here), there was considerable scepticism about CSR and a desire for “sustainability” and authentically responsible business to be front and centre.

“The younger demographic are quite sceptical about CSR when it’s seen to be a one-off.”

– [Business leader]

“It’s not enough just to be seen as going through the motions.”

– [Labour MP]

“The impression that you get is that it’s a tick-box thing; it’s something that you’ve got to put in your annual report. And so they go through the motions; the heart is not really in it. I don’t think people are stupid – they can tell the difference between companies that are genuinely making a difference to local communities and those who just try and tick a few boxes to make it look as if they do.”

– [Conservative MP]

“Corporate social responsibility is part of the business, and needs to be integrated into business activities, like many other things – like good accounting, like an internal audit, like a remuneration committee. Corporate social responsibility in its different aspects needs to be integrated into day-to-day business, not as something that’s on the side-lines.”

– [Business leader]

“It’s got to be genuine. People see through greenwash in nanoseconds, particularly people that work in the organisation. […] We couldn’t recruit people, unless we had a genuine story to tell about why what we do is valuable in its own right and what else we do beyond that. So it’s an internal thing, but it’s got to be real.”

– [Business leader]

Perhaps that is why CSR, as a term, is rarely found on FTSE companies’ front pages. One is far more likely to find reference to ‘sustainability’ or ‘responsibility’ or ‘responsible business’ or a company’s specific pledges than ‘CSR’.

But why care? Why spend the time and money involved? Clearly most large companies have decided it is worth it.

Reputation – whether among regulators, stakeholders or employees – is an asset, and like any asset it should be taken care of and developed for the good of the business. Don’t just take our word for it – some of the UK’s leading business journalists have reiterated it to us over and over again the importance of maintaining and building reputation.

“They risk bad publicity, which can be a problem in terms of future sales, and they risk a political crackdown, with huge tax rises in their sector or a withdrawal of support. […] Government and public support can be withdrawn at any stage and bosses really need to be aware of that.”

– [Business journalist]

“It’s easier to make money if you have a good reputation and your customers trust you than it is if they don’t.” [Business journalist]

“Politicians can make life incredibly difficult for any business. You need to keep people onside – whether it’s the media or politicians, who ultimately make the laws that you have to abide by.”

[Business journalist]

“Companies should care a great deal about their reputations. It’s increasingly important among newer customers and millennials. They will be tempted by lots of different companies, they will find it much easier to switch, they will be more inclined to switch, and they’ll be more inclined to use new platforms. Traditional incumbent brands really mean little to them. They will be drawn to companies with a good reputation and won’t have the inertia about moving between providers that older people do.”

– [Business journalist]

Aligning corporate practices and the communication of sustainability pledges with reputation building is, therefore, important. Spending time and money on things audiences don’t care about or don’t believe or misunderstand is a real threat and something that needs to be avoided. Opportunities for companies to communicate their message are limited and it is only by fully understanding the views and expectations of audiences that companies will be able to deliver an effective sustainability strategy.

Gone are the days when companies rolled out a generic or ‘identikit’ CSR strategy purely because it was ‘the thing to do’. Everyone has moved on, and stakeholders expect businesses to take responsibility for the issues relevant to their industry and the societies in which they operate. Equally, these businesses are not charities, they need to see the benefits of whatever they are investing in.  Aligning these two, potentially opposed, objectives is where the challenge and subsequent reward lies.

Perceptions of responsible business and businesses’ ‘social purpose’ will be explored in more detail by future articles in this series.


Owen Thomas

Owen Thomas is a Director at Populus managing a wide variety of stakeholder, political and reputation research projects that aim to equip clients with a better understanding of the issues that matter most to them and their stakeholders. He is a key member of the Reputation & Strategy team who has developed his expertise overseeing qualitative workshops and consultations, examining the reputation of some of the UK’s largest companies among political stakeholders and conducting extensive research into senior opinion-formers’ attitudes towards the post-crash economy.

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