Cool brands vs hot brands

Two-thirds of the world’s top 100 brands are failing on climate change, according to latest research from responsible investment research firm EIRIS.

The report Cool Brands versus Hot Brands? focuses on the world’s leading 100 brands, as identified by Interbrand, and finds that 69% of those with a high climate change impact lack adequate policies, management systems and reporting on climate change.

Companies risk eroding brand value by failing to respond to the climate change concerns and expectations of customers, investors, NGOs and other key stakeholder groups. EIRIS’ analysis reveals surprising differences in the way efforts to tackle climate change are embedded within a company’s culture. Research parameters include product impacts, long-term targets, executive remuneration and disclosure.

Leader of the pack? 

Gillette (ranked 3rd in Interbrand’s top 100) achieved the highest overall climate change rating in EIRIS’ analysis. The brand has established long-term targets on emissions reduction and displayed strong reporting against those targets.

Porsche, on the other hand, (ranked 72nd in Interbrand’s top 100) achieved one of the lowest climate change scores in EIRIS’ climate change analysis. This contrasts with other leading brands in the automobile and parts sector such as Toyota.

Apple vs Dell 

Big differences exist in the extent to which leading technology brands are tackling climate change. Dell (Interband rank 42) has linked executive remuneration to climate change performance, established both long and short-term targets and has improved product-related climate change emissions.

However, Apple (Interbrand rank 17) has failed to implement any of these measures. On the other hand, Apple has shown an improvement in reducing its GHG emissions whilst Dell’s GHG gas emissions have increased. However, it should be noted that other factors such as new business acquisitions, fluctuations in turnover, etc, can account for increases/decreases in GHG emissions.

Pepsi challenged? 

Coca-Cola is at the top of the Interbrand 100 list, while PepsiCo is positioned at number 23. However, when looking at their relative responses to climate change a different picture emerges. While Coca-Cola has an assessment of ‘intermediate’, with a number of unidentified or unmanaged risks, PepsiCo scores ‘good’ according to EIRIS’ methodology. Unlike Coca-cola, PepsiCo is therefore considered to have adequately managed its climate change risks. 

Cool Brands versus Hot Brands? forms part of a EIRIS’ wider annual climate change tracker report which analyses the performance of the world’s biggest 300 companies in tackling climate change. This year’s analysis of the world’s 300 largest companies finds that:

– 33% of companies have a significant climate change impact. Of this 33%, only 27% are adequately managing the climate change risks they face. In 2008, only 16% adequately managed climate change risks

– 60% have now established short-term targets (48% in 2008), but only 46% have set long-term targets (25% in 2008), leaving significant room for improvement

– In 2010, 31% of significant impact companies linked executive remuneration to carbon emissions, up from 14% in 2008

“The potential reputational damage to brand value associated with a failure to respond to the risks from climate change can have a direct impact on a company’s profitability. A lack of mitigation measures can also lead to the loss of business productivity and business interruption” said Carlota Garcia-Manas, Head of Research at EIRIS.

www.eiris.org