With so many companies already stepping up efforts to adopt sustainable practices it is not a surprise that some are doing better than others. But, how is sustainable practice adoption really measured? How do we actually know how well (or how bad) their performance is? Up to a large extend sustainability corporate performance is all about reputation. Even those tangible benefits that companies expect to achieve by engaging in sustainable practice are in fact just a matter of managing their reputation. This doesn't necessarily mean that companies only talk the talk but rather that they talk the talk at least as much as they walk it.
Brandologic teamed with CRD analytics to map the sustainability performance and the stakeholder perception of 100 prominent world companies. The evaluation classifies companies in one of four categories Challengers, Leaders, Laggards and Promoters in what they call Sustainability IQ Matrix.
Leaders are those companies that perform well in ESG (Environmental, Social and Governance) and are perceived to do so by their stakeholders. Challengers are companies that even though they perform well, they do not manage to get enough credit for their performance. In contrast, Promoters are those companies that get more stakeholder credit than what they deserve and finally Laggards are companies that do not take a keen interest in ESG.
Apart from the difficult to read graph pasted above, there are industry specific graphs that do well in providing you with a clearer picture. Not surprisingly, I've taken a keen interest on the one focusing on the energy (oil and gas) sector. There I've noticed that Exxonmobil, Shell, BP and Chevron are actually doing bad in managing their reputation even though they're not that bad in their sustainability practice. Obviously,
Deepwater Horizon accident must have something to do with refreshing the oil and gas sector's bad name (and unfortunately it's not the only one...).
There's also a category for industrial companies and transportation in a rather inconvenient joint presentation. I'd rather focus on the airlines here and let you know that they all perform badly. However, some manage to convince their stakeholders and their credentials. American Airlines and Lufthansa seem to get more credit than they deserve even though they do not perform significantly better than British Airways and even Japan Airlines (which actually performs the worst of all). As far as transport is concerned you'd probably prefer to use UPS than FedEx based on their ESG performance. Mind that even though UPS performs a lot better than FedEx they receive less credit. Something for the UPS management to pick up urgently!
In the detailed methodology section of the sustainability leadership report I've noticed that Environmental, Social and Governance performance are not weighted equally. Instead, the main weight (50%) is on social responsibility with the rest (50%) shared between Environmental and Governance. Makes me wonder how the results would look like with equal weights or even more if Environmental was on the 50% scale.
Brandologic teamed with CRD analytics to map the sustainability performance and the stakeholder perception of 100 prominent world companies. The evaluation classifies companies in one of four categories Challengers, Leaders, Laggards and Promoters in what they call Sustainability IQ Matrix.
Leaders are those companies that perform well in ESG (Environmental, Social and Governance) and are perceived to do so by their stakeholders. Challengers are companies that even though they perform well, they do not manage to get enough credit for their performance. In contrast, Promoters are those companies that get more stakeholder credit than what they deserve and finally Laggards are companies that do not take a keen interest in ESG.
Apart from the difficult to read graph pasted above, there are industry specific graphs that do well in providing you with a clearer picture. Not surprisingly, I've taken a keen interest on the one focusing on the energy (oil and gas) sector. There I've noticed that Exxonmobil, Shell, BP and Chevron are actually doing bad in managing their reputation even though they're not that bad in their sustainability practice. Obviously,
Deepwater Horizon accident must have something to do with refreshing the oil and gas sector's bad name (and unfortunately it's not the only one...).
There's also a category for industrial companies and transportation in a rather inconvenient joint presentation. I'd rather focus on the airlines here and let you know that they all perform badly. However, some manage to convince their stakeholders and their credentials. American Airlines and Lufthansa seem to get more credit than they deserve even though they do not perform significantly better than British Airways and even Japan Airlines (which actually performs the worst of all). As far as transport is concerned you'd probably prefer to use UPS than FedEx based on their ESG performance. Mind that even though UPS performs a lot better than FedEx they receive less credit. Something for the UPS management to pick up urgently!
In the detailed methodology section of the sustainability leadership report I've noticed that Environmental, Social and Governance performance are not weighted equally. Instead, the main weight (50%) is on social responsibility with the rest (50%) shared between Environmental and Governance. Makes me wonder how the results would look like with equal weights or even more if Environmental was on the 50% scale.
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