RSS!    Full Post
Share Social Responsiblity and Brand Value

Investors may stubbornly choose not acknowledge it, but consumers are already rewarding companies whose brands are perceived as valuable to society, and to themselves.  And the other brands?  Well, they could disappear tomorrow and few tears would be shed.

If that doesn't make some executives nervous, I don't know what would.  A full 70% of brands were labeled as "expendable" by the consumers polled.

These consumer attitudes are the findings of the research firm, Havas Media.  Companies who score highly on the Meaningful Brands Index are contributing to both "collective wellbeing" (good for society) and "individual wellbeing" (good for me). 

Among the "collective wellbeing" attributes found by the researchers are metrics that we use everyday to define a sustainable and responsible investment:  Transparency, ethics, working conditions and environmental impact. One would think that companies would recognize the significance of these issues, but that's not always the case. 

So what is a meaningful brand?
According to Havas:  Meaningful brands enhance the wellbeing of individuals, communities and the environment, making people and society flourish.

Ikea, for hits all of the buttons on both sides of the ledger.  Favorite food and beverage brands such as Coca Cola rank highly along with Nestle, Danone and Mars, their consistent product quality/appeal balanced by generally responsible corporate citizenship. 

Price leading retailers, including WalMart and Carrefour, are more of a connundrum, delivering value to millions of consumers through price and convenience.  While Carrefour is regulary cited as a sustainability leader, WalMart's labor issues and communitity impacts have tended to outweigh its impressive but limited environmental initiatives.

Consumer electronic brands are associated with great advances in convenience.  Hence Samsung, Microsoft and Sony are all among the top ten Meaningful Brands.  Yes, Apple is also represented, but at number 13 is lower than might have been expected given the firm's innovation and design leadership.  Could this be a consequence of well-publicized labor issues in China?

Admittedly, a cross-border ranking system recognizes only those brands whose products flow freely around the globe.  So, while the rankings themselves are less meaningful, the overall findings about consumer attitudes are unmistakable:   53% of respondants said they would pay a premium for a responsibly produced product.  And 44% said they would punish irresponsible companies.  Both are up from the prior year.

So, let the producer, not the buyer, beware.  The activist consumer is a trend that continues to gain steam.  Can investors gain from this perspective?