Glenn Hansen (pictured), executive strategic advisor BPA Worldwide, urges us to consider the Sustainability Perceptions Index and reflect on what our sector's companies need to do:
In January at the World Economic Forum in Davos, Switzerland, the International Advertising Association (IAA) released its Sustainability Perceptions Index 2023. The index was created in co-operation with Brand Finance and is an attempt to place a financial value on a brand’s reputation for sustainability. The IAA has played an important role in the media industry by reporting the latest trends and providing valuable insights to help chief marketing officers (CMOs) to understand ‘What's Coming Next’.
In its announcement, the IAA noted: “As consumers become more aware of environmental and social issues, they are increasingly taking into account a company’s sustainability practices when making purchasing decisions. If the company is perceived as not being environmentally or socially responsible, it may lead to negative perceptions of the brand and ultimately result in a decrease in sales and customer loyalty. CMOs should therefore consider incorporating sustainability, in an authentic way, into their marketing strategies to appeal to conscious consumers and mitigate brand value erosion.”
This should not be something new to us. Nonetheless trade show organisers and the events industry supply chain would do well to understand the Sustainability Perceptions Index and the challenge of staying on the right side of the journey.
How effectively is your company clearly communicating its sustainability strategy? As reported by Brand Finance, “Communication on sustainability performance was for many years at best a mixed bag, with only a small number of companies providing any meaningful information and only a subset of these providing reliable, verifiable information. As the commercial imperative to provide information has grown, the number of businesses publishing sustainability data and being certified has grown.”
Most sustainability standards and reporting frameworks permit the reporting organisation to determine (and disclose) what is reported and what is left out (a.k.a. determined to be out of boundary or scope). It is the responsibility of an independent third party to judge if what is being left out is material to the reporting.
In the financial world there is guidance. The International Financial Reporting Standards (IFRS) foundation tells us: “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” There is similar guidance in the world of sustainability reporting, but if those reporting exercise the option to self-declare, there is no third-party oversight. Here is where things can go wrong in the eyes of stakeholders.
It is awfully convenient to exclude material aspects of conduct to alter the appearance of sustainable practices. But stakeholders don’t understand boundary and scope, and if they did, they may not appreciate what is left out of sustainable reporting practices. Rather, they are likely to judge one as a ‘green washer’. What does that do to your brand?
In the Sustainability Perceptions report, IAA World president and CEO of Wunderman Thompson NY, Sasan Saeidi makes the point, “I can carefully say that most sustainability messages by our industry brands are not understood or believed. If you test a lot of sustainability communication, you will find a big delta on comprehension and true engagement. Very simply, if the consumer can’t picture in their mind how you as a brand intend to make the world more sustainable, I think it’s fair to say that we have a job to do!” He recommends that we “use simple human language to explain complex mechanics”.
There’s our challenge. How do we, as professionally, ethically and responsibly managed trade shows and supply chain, clearly demonstrate and communicate our commitment to protecting the natural environment and support our communities and wider society?
I urge you to read the Sustainability Perceptions Index (found here) and ask yourself how you would rate your company.
- Is it a leader in sustainability?
- Is it taking significant actions?
- Is it making some effort, but could do more?
- Is it making very limited efforts?
- Is it making no real effort to be a sustainable business?
And, in the end, are we completely and in plain language communicating what we are doing such that stakeholders perceive our industry positively?
Most would agree that our industry still has plenty of work to do.