El Greco was criticized throughout his life; the expressionism of his paintings was not common until the modern techniques he used were recognized in the 20th century. Today no one disputes that he left behind his own technique based on his peculiar style. Exceptional performances are not always recognized by their contemporaries.
Corporate reputation is based on two pillars: corporate behavior and the company stakeholder’s recognition of this. Corporate behavior may or may not be sustainable, which seeks to balance the economic role that every business project has with society and the environment. Therefore, it proves to be a problem if sustainability is not recognized.
From time to time, there are questions about whether sustainability should be communicated, a question I do not think makes sense… can you be recognized without communicating your efforts? If we do not communicate our actions, we cannot receive recognition.
A separate issue is pursuing a “facelift,” a makeover, or outright greenwashing through communication. A few days ago, the European Commission published the screening of websites (“sweep”) results it carries out yearly; this year, it focused on greenwashing. The report found that in 42% of the cases, claims were exaggerated, false, or misleading. Approaching communication in this way is quite dangerous because, as we know, image and reputation are not synonymous. Certainly, a good campaign can change one´s image momentarily. However, it can only be done temporarily, on a short-term basis, in an unsustainable way over time. Brundtland already told us that sustainability is about harmonizing the needs of the present without compromising the needs of future generations. Thus, communicating something that is not aligned with our behavior has no future, is unsustainable, and therefore, stakeholders will make us pay for it in the form of loss of reputation, the main asset of companies.
Communicating who we are, comes with risks, yet so does not communicating who we are. I am myself plus my circumstances, as the philosopher stated. Neither the self can be understood without the circumstance nor the circumstance without the self. Companies have the opportunity to influence, to impact the environment where they operate; this makes them responsible–co-responsible–because business models cannot exist in societies that are not sustainable. This is because, once again referencing the philosopher, if I don’t save it, I don’t save myself. Not communicating our sustainable behavior brings us closer to El Greco, someone who was only recognized after his death.
Companies are currently facing a major challenge: the assessment and management of their intangible assets, which have come to represent much of the value of large companies over the years According to Aon and the Ponemon Institute, in just 43 years, intangibles have gone from being a supporting asset to a critical factor for investors: today, they make up 84% of all corporate value in the S&P 500. This indicates a substantial increase when compared to the 17% they made up in 1975.
Among those intangible assets are the brand and relationships. Professional investors, according to a study conducted by Columbia Threadneedle, place great importance on these types of assets, with 95% believing that intangible assets contain crucial information about the future strength of a company’s business model. Furthermore, 98% agree that greater transparency would be beneficial when assessing their intangible assets. For an organization to grow, investing in material aspects is just as important as intangibles, such as the brand and relationships that link us to society. Of these intangibles, sustainability occupies a priority position. In short, not communicating our sustainability policy equates to putting our company at risk.
Original article by Manuel Sevillano, CSR and Reputation Director at ATREVIA for TOP Comunicación.
