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Businesses risk facing a costly backlash due to consumer mistrust of firms’ climate change claims

Companies able to provide credible evidence of improving their environmental impact, benefit from considerable commercial and reputational opportunities.

GENERAL MERCHANDISE

Businesses risk facing a costly backlash due to consumer mistrust of firms’ climate change claims

Companies able to provide credible evidence of improving their environmental impact, benefit from considerable commercial and reputational opportunities.

New research has just been released which was commissioned by the Carbon Trust and supported by global brand analysis,from BrandZ.

The research revealed that 90% of the public want firms to commit to the average 3% per year emissions cut required for the UK to meet 2050 climate change targets. Consumers cite the threat of climate change, which polled as the greatest issue facing the environment, as the root of the heightened public expectation for firms to prove their commitment.

• 70% of people want businesses to mandatorily disclose their carbon emissions. 
• 56% are more concerned about business’ actions to reduce their impacts on climate change than they were five years ago.

Peter Walshe, Global Director, BrandZ, said, “This new research builds on our own global analysis and shows that the public are in a very uncomfortable place regarding climate change, they understand the significance of the issue; they recognise that businesses ’are a major emitter of emissions, but most are unclear as to the full extent - and what real action looks like.”

The research shows that the majority of consumers (60%) need third party evidence of action from a respected climate change body before believing corporate claims.  The first place the public search for evidence of corporate climate change claims is not company websites, but search engines; which provide a range of sources.  Just 7% believe the word of companies on their climate change responsibilities and actions to reduce their impacts.
• 66% question whether companies are genuinely cutting carbon emissions
• The greatest concern around company claims is that firms simply make one-off improvements to win publicity, and then just return to business as usual (53%).

Harry Morrison, General Manager, the Carbon Trust Standard, said, “It’s clear that ‘green washing’; over claiming; and excessive jargon has created mistrust of brands.  The good news is that by taking voluntary action now to measure, manage and reduce their impacts, there are huge opportunities for brands to stand out from the crowd.”

For those companies able to provide credible evidence of improving their environmental impact, there are considerable commercial and reputational opportunities:
• 56% are more loyal to brands that can show, at a glance, evidence of action.
• 53% want to work for companies which can clearly demonstrate commitment to reducing their impacts. 

According to BrandZ’s global analysis, there is a distinct correlation between the strongest, most successful performers in its annual ‘Top 100 Most Powerful Brands’ and those brands which score highly on the categories of Corporate Reputation, Leadership and Innovation.  Environmental responsibility is one of the top characteristics of leading companies.  BrandZ’s analysis over the last six years finds that, on average, 80% of sales are generated by the product brand itself, whereas 20% of sales are directly linked to corporate reputation.  In breaking the Corporate Reputation category down further, BrandZ found that, at least 2% of sales are attributable directly to environmental reputation. 

Peter Walshe, Global Director, BrandZ added,“Without even taking into account the role that environmental responsibility has in demonstrating leadership; fairness; and trust -our own research shows that taking action on climate change represents a 2% sales increase or decrease for businesses to play for. Right now, this is an opportunity.  But as awareness rises of the considerable role of business emissions in climate change, I expect an imminent backlash against companies that do not perform or cannot prove their actions are measurable and authentic.”

The John Lewis Partnership is one organisation which has recognised the benefits of taking a firm stance on climate change.  In June 2010, the organisation was awarded the Carbon Trust Standard for improving its carbon performance through a number of actions, including improving shop energy efficiency in John Lewis and Waitrose by 20% against a 2003 /04 baseline.  The Partnership has also just pledged to reduce its absolute carbon emissions by 15% by the financial year 2020/2021, against a baseline of 2010/2011.

Charlie Mayfield, Chairman, John Lewis Partnership, said,“Our commitment to sustainable business growth is not new.  By setting a stretching and challenging target, underpinned by a robust, long-term carbon reduction plan, we will focus our efforts to reduce our absolute carbon emissions as we grow.  Integral to our approach to reducing our carbon emissions is the trust we have built with our customers based on our commitment to deliver what we promise and the real sense of ownership that our Partners have in our business success”

In order to meet our 2050 carbon emissions targets, the UK must reduce its total CO2 emissions by the total emissions equivalent of England today.  The Carbon Trust today launched its Carbon Citizenship website, with the aim of informing the general public about the risk of climate change, the role of business, and the task ahead of the UK in order to meet its 2050 climate change targets.

 

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