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Sustainability

Perceptions

Index

2023

The inaugural report on the value of sustainability perceptions to the

world's leading brands

January 2023

Brand Finance Sustainability Perceptions Index 2023 brandirectory.com/sustainability 2

Contents.

About Brand Finance 3

Get in Touch 3

Foreword 4

The IAA – A Global Compass for Sustainability 5

Dagmara Szulce, Managing Director, IAA Global

Planet Mark – Embedding Sustainability and Net

Zero at the Core of Business Strategy 6

Steve Malkin, CEO and Founder, Planet Mark

Methodology 7

Research Analysis 12

Sustainability Perceptions Scores 16

Insights 21

Sustainability Reporting 22

Robert Haigh, Strategy and Sustainability Director, Brand Finance

Delivering on sustainability through comprehension and community 26

Sasan Saeidi, World President & Chairman, IAA

The Paradox of Greenwashing 28

Hervé de Clerck, VP IAA Global, Sustainability Council Chair

Creating a smarter regulatory environment that protects consumers,

allows businesses to thrive, and helps save the earth too 30

Jeffrey A. Greenbaum, Chair, IAA Public Policy Council

Sustainability Perceptions Value Ranking 32

Our Services 46

Brand Finance Sustainability Perceptions Index 2023 brandirectory.com/sustainability 3

About Brand Finance.

Brand Finance is the world's leading brand

valuation consultancy.

We bridge the gap between marketing and finance

Brand Finance was set up in 1996 with the aim of 'bridging

the gap between marketing and finance'. For 25 years, we

have helped companies and organisations of all types to

connect their brands to the bottom line.

We quantify the financial value of brands

We put 5,000 of the world’s biggest brands to the test

every year. Ranking brands across all sectors and

countries, we publish nearly 100 reports annually.

We offer a unique combination of expertise

Our teams have experience across a wide range of

disciplines from marketing and market research, to

brand strategy and visual identity, to tax and accounting.

We pride ourselves on technical credibility

Brand Finance is a chartered accountancy firm regulated

by the Institute of Chartered Accountants in England and

Wales, and the first brand valuation consultancy to join

the International Valuation Standards Council.

Our experts helped craft the internationally recognised

standards on Brand Valuation – ISO 10668 and Brand

Evaluation – ISO 20671. Our methodology has been

certified by global independent auditors – Austrian

Standards – as compliant with both, and received

the official approval of the Marketing Accountability

Standards Board.

Get in Touch.

linkedin.com/company/brand-finance

twitter.com/brandfinance

facebook.com/brandfinance

youtube.com/brandfinance

For business enquiries, please contact:

Robert Haigh

Managing Director

r.haigh@brandfinance.com

For media enquiries, please contact:

Michael Josem

Associate Communications Director

m.josem@brandfinance.com

For all other enquiries:

enquiries@brandfinance.com

+44 207 389 9400

www.brandfinance.com

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SustainabilityPerceptionsIndex2023Theinauguralreportonthevalueofsustainabilityperceptionstotheworld'sleadingbrandsJanuary2023BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability2Contents.©2023Allrightsreserved.BrandFinancePlc.AboutBrandFinance3GetinTouch3Foreword4TheIAA–AGlobalCompassforSustainability5DagmaraSzulce,ManagingDirector,IAAGlobalPlanetMark–EmbeddingSustainabilityandNetZeroattheCoreofBusinessStrategy6SteveMalkin,CEOandFounder,PlanetMarkMethodology7ResearchAnalysis12SustainabilityPerceptionsScores16Insights21SustainabilityReporting22RobertHaigh,StrategyandSustainabilityDirector,BrandFinanceDeliveringonsustainabilitythroughcomprehensionandcommunity26SasanSaeidi,WorldPresident&Chairman,IAATheParadoxofGreenwashing28HervédeClerck,VPIAAGlobal,SustainabilityCouncilChairCreatingasmarterregulatoryenvironmentthatprotectsconsumers,allowsbusinessestothrive,andhelpssavetheearthtoo30JeffreyA.Greenbaum,Chair,IAAPublicPolicyCouncilSustainabilityPerceptionsValueRanking32OurServices46BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability3AboutBrandFinance.BrandFinanceistheworld'sleadingbrandvaluationconsultancy.WebridgethegapbetweenmarketingandfinanceBrandFinancewassetupin1996withtheaimof'bridgingthegapbetweenmarketingandfinance'.For25years,wehavehelpedcompaniesandorganisationsofalltypestoconnecttheirbrandstothebottomline.WequantifythefinancialvalueofbrandsWeput5,000oftheworld’sbiggestbrandstothetesteveryyear.Rankingbrandsacrossallsectorsandcountries,wepublishnearly100reportsannually.WeofferauniquecombinationofexpertiseOurteamshaveexperienceacrossawiderangeofdisciplinesfrommarketingandmarketresearch,tobrandstrategyandvisualidentity,totaxandaccounting.WeprideourselvesontechnicalcredibilityBrandFinanceisacharteredaccountancyfirmregulatedbytheInstituteofCharteredAccountantsinEnglandandWales,andthefirstbrandvaluationconsultancytojointheInternationalValuationStandardsCouncil.OurexpertshelpedcrafttheinternationallyrecognisedstandardsonBrandValuation–ISO10668andBrandEvaluation–ISO20671.Ourmethodologyhasbeencertifiedbyglobalindependentauditors–AustrianStandards–ascompliantwithboth,andreceivedtheofficialapprovaloftheMarketingAccountabilityStandardsBoard.GetinTouch.linkedin.com/company/brand-financetwitter.com/brandfinancefacebook.com/brandfinanceyoutube.com/brandfinanceForbusinessenquiries,pleasecontact:RobertHaighManagingDirectorr.haigh@brandfinance.comFormediaenquiries,pleasecontact:MichaelJosemAssociateCommunicationsDirectorm.josem@brandfinance.comForallotherenquiries:enquiries@brandfinance.com+442073899400www.brandfinance.comRobertHaighStrategy&SustainabilityDirector,BrandFinanceBrandFinanceGlobal5002023brandirectory.com/global4Foreword.Actingsustainablyandbeingseentodosoisimperativeforbrands,butsustainabilityisamultifacetedconceptthatcanbehardforbusinessleaderstonavigate.Investors,CFOsandCEOsaretoldbycampaigners,NGOs,consultantsandsustainabilityteamsthatcommittingtosustainabilityisboththerightthingtodoandabusinessimperative.Thereareindeedmanyopportunities,whetherinsupplyingtheproductsandservicesthatfacilitatethetransitiontoagreeneconomy,orsimplybydifferentiatingyourbrandasasustainablealternative.However,withoutarticulatingthecaseinfinancialtermsitcanbehardtodeterminethebusinesscaseforaction.TheSustainabilityPerceptionsIndexisintendedtobethefirststeptoaddressingthischallenge.Byquantifyingthevalueofsustainabilityperceptions,wehopetomakethevalueofactiononsustainabilitymoretangible.Ourresearchshowsthatevenforindividualbusinesses,therecouldbebillionsofdollarsoffinancialvaluetobegainedfromenhancedactionandassociatedcommunication.Equally,therecanbebillionsatriskfrominsufficientactionthatleadstoaccusationsofgreenwashing,orevenmisallocatedorexcessiveinvestmentsinsustainabilitycommunicationthatdoesnotcutthrough.Wehopethisreportisausefulfirststepinunderstandingthefinancialroleofsustainabilityperceptionstoyourbusiness(orthebusinessleadersthatyouaretryingtopersuade).Ifyouwouldliketocontinuetheconversation,pleasegetintouch.Wehavedevelopedanextensiveprogramofresearchandafullsuiteofservicesintendedtodeliveractionableinsightforourclients.WeworkwithCEOs,strategists,recruitmentteams,CFOs,SustainabilityOfficers,andofcoursemarketers,tohelpanswerarangeofpressingquestions,including:•Howsustainableisyourbusinessesperceivedtobe?•Howdoyoucomparevscompetitors?•Howimportantissustainabilityindrivingconsumerchoice?•Howimportantissustainabilitywhenrecruitingstaff,orsecuringinvestment?•Whatisthepotentialvalueofenhancingsustainabilityperceptions?•Isyourbrandrecognizedforitssustainabilityleadership?•Doyourbrand’sactionsliveuptoitsclaims?Couldvaluebeatrisk?•Whatarethe‘sustainableconsumer’segmentsandhowdowetargetthem?•Whichsustainabilityissuesandthemesaremostrelevant?•WhichNGOs/causesshouldIalignmybrandwith?•HowdoIchampioncorporateactiononsustainability?•HowdoImaximizefundingformycause?Ifyouhavebeenwrestlingwithanyofthesequestions,welookforwardtohelpingyousolvethem!BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability5TheIAA–AGlobalCompassforSustainability.Withthedigitalrevolutioncontinuingtoopennewchannelsandnewconsumermarketsaroundtheworld,CEOs,CMOs,andCFOswhounderstandthetangibleandintangibleassetscontributingtothecreationofbrandvaluecanhaveasignificantbusinessandeconomicadvantage.However,manymarketingandfinancialteamsstruggletoconnectthesedotsand,asaresult,underestimatethesignificanceoftheirbrandstobusiness.ThelatesteconomiccrisistriggeredbytheCOVID-19pandemichashadaprofoundimpactonchangingconsumers’perceptionstowardsbrands.Sustainabilityisincreasinglyapriorityforconsumerswhenpurchasingbrandsand,asaresult,sustainabilityperceptionshaveanincreasedimpactonbrandvaluation.Expectationshaveshiftedfrom“donoharm”to“mustcreatepositiveimpact”.Ifbrandsdonotpushtotransformtheirbusinessintoasustainableone,they,morethanever,risktheirbottomline.Formanyconsumers,purchasingaproductnowrequiresanalignmentonethicalgrounds.InternationalAdvertisingAssociationistheonlyglobalassociationthatrepresentsallspheresofthemarketingandmarketingcommunicationsindustry.Wepartnerwithleadingglobalconsultingfirmstoservethemarketingcommunicationsindustryastheglobalcompassintheever-evolvingmarketingcommunicationsworld.Forover80years,IAAhasplayedastrongroleinreportingthelatesttrendsintheindustrytoprovidevaluableinsightsforCMOstounderstand“WHAT’SCOMINGNEXT”.We’vepartneredwithBrandFinance,agloballeaderinbridgingthegapbetweenmarketingandfinance,toprovidetheindustry’sfirstconsumer-centricindexthatmeasuresconsumers’sustainabilityperceptionofthemostvaluableglobalbrands.TheBrandFinance/IAASustainabilityPerceptionsIndexisthefirstofitskind–arankingoftheworld’sbiggestbrandsbasedonthefinancialvalueoftheirsustainabilityperceptions,andwe’llbelaunchingitattheWorldEconomicForuminDavosinJanuary2023.WeseethisasanincrediblypotenttooltoincentivizeactionthatalignswiththeUNSDGsandwideraimsoftheUNGlobalCompact.Ourresearchshowsthattheworld’sbiggestbrands,whethertheyareseenassustainabilitychampionsornot,havehundredsofmillionsofdollars’worthofvaluecontingentonhowsustainabletheyareperceivedtobe.Byhighlightingthefinancialvaluethatiscontingentonsustainabilityperceptions,wehopetoharnessbusinesses’profitmotive,movingthempastthepointwheretheyseesustainabilityasa‘hygienefactor’,toapointofrapid,concertedaction.IAAbelievesthatinafragmentedandalwaysevolvingglobalmarketplace,themarketingcommunicationsindustrycouldbenefitfromaglobalperspectiveandaglobalframework.Webelievetheworldwouldbeabetterplaceifweworktogetherasanindustrytoleveragebrandstohelpcreateamoresustainableworldforconsumers,communities,andfortheplanet.DagmaraSzulceManagingDirector,IAAGlobalBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability6PlanetMark–EmbeddingSustainabilityandNetZeroattheCoreofBusinessStrategy.Theeventsofthepastfewyearshavehighlightedboththeresilienceandfragilityofourglobalenvironmental,socialandeconomicsystems.We’veexperiencedaworldwidepandemic,supplychaindisruptions,achallengedenergymarket,extremeweatherconditions,andmore.Theneedforbusinesstransformationandcollaborationhasneverbeenmorecriticalandatthistimeweareremindedthattheeconomicpillarofsustainabilityisjustasimportantandtheenvironmentalandsocialpillars.Embeddingsustainabilityatthecoreofbusinessstrategyandcommunicatingthevalueradicaldecarbonisationishavingnotonlyontheoperation,butit’speopletoo,encourageshugepositiveassociationwithbrands.Ithelpsattractandretainbothemployees,channelpartnersandconsumers.In2013,webeganPlanetMarkasatrulyeffective,people-drivensustainabilitycertificationhelpingorganisations,ofanysize,tomeasurewhatmattersandtodevisepracticalpathwaystopositivechangewhileincreasingbusinessvalue.10yearson,ourcorepurposeremainsthesame,butmore.Continuedfocusonscope3withinanetzeropathwayshinesalightonhowallorganisationsexistwithinacommercialecosystemthatisascomplexandsynergisticasthenaturalone.NoorganisationcanachieveNetZeroalone,wehavetoworktogether,toengageandtocommunicateourjourneytothosearoundus.Thisincludesourcustomerandprospects,whoseperceptionofourbrandsandpropensitytobuyfromus,feedsourorganisationalgrowthandmarketperformance.Whilecashremainsking,branddrivershavechanged,andsustainabilityisnowacorepriorityforconsumers.Thosebrandsthatstayaheadofthecurveandmovewiththetimeswillbeabletoleveragetheircredentialsforcommercialgain.Thosealreadyonapathwaytonetzerowillalreadybereapinghugerewardsthroughcommercialresilience,future-proofingtheirbusinessandaddingtangiblefinancialvaluetotheirbalancesheetsasdemonstratedinthisreport.Thetimetoactisnowforthefutureoftheplanet,andforthefutureofyourbusiness.SteveMalkinCEOandFounderPlanetMarkMethodology.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability8Thestartingpointofthesustainabilityperceptionsvalueisbrandvalue.Whenwetalkabout‘brand’wethereforemeanmorethanjustalogo.Itisthefocalpointforallaccumulatedperceptionsaboutabusiness.Anycharacteristicofaproductorservicethatcannotbedirectlyexperiencedortestedbythecustomeratthepointofpurchaseisevaluatedthroughthebrand.Abusiness’commitmenttosustainabilityisonesuchcharacteristic.Whilsttherearedozensofreportingframeworksanddatasourcesprovidingsomelevelofinformationonsustainabilityperformance,thesetypicallyonlyprovidepartialinformation,andareusuallynoteasilyfoundorevaluatedbymoststakeholders,includingemployeesandcustomers.Further,thesheerproliferationofsuchschemescancreateuncertaintyaroundtherelativeimportanceoftheinformationtheyprovide.Thebrandthereforeremainsanessentialtoolintheevaluationofsustainabilitybymoststakeholders.Theperceptionsthatthesestakeholders(betheyemployees,customers,investorsetc)holdareexpressedthroughemploymentdecisions,purchasehabits,orinvestmentdecisionsetc.Thesedecisionshavecleareconomicimplications,whichbrandvaluationseekstoquantify.Thefullbrandvaluationmethodologyiscoveredlaterinthisreport.Therearemanyfeaturesboundupwithbrand,thesecouldbeareputationforbeinggoodvalueformoney,forreliability,forinnovation,customerserviceandsupport,oreasytouse.Commitmenttosustainabilityisjustoneofthesecharacteristics.Therefore,thenextstepinderivingthesustainabilityperceptionsvalueistoevaluatetherolethatsustainabilityplaysindrivingthechoice.Wedothisusingananalyticaltechniqueknownasbranddrivers’analysis.Thestartingpointisourannual,flagshipmarketresearchexercise,theGlobalBrandEquityMonitor.Weresearchtheattitudesofover100,000membersofthegeneralpublicfromover36countriesaboutover4,000brands.Respondentsareaskedawiderangeofquestions,includingmarketingfunnelquestionsaboutawareness,familiarityandconsideration.Theyarealsoaskedwhethertheyassociatealistofattributes(suchasvalueformoney,reliabilityetc)withabrand.Sustainabilityisincludedinthislist.Sustainabilityisofcoursenotamonolith.Tocapturesomeofthenuanceandvaryingthemeswithinsustainability(whilstmaintainingamanageableanalysis),wehavesubdividedsustainabilityusingthe‘ESG’framework,i.e.‘Environment’,‘Social’andMethodology-SustainabilityPerceptionsIndex.ValuingtheproportionofBrandValuethatisattributabletoSustainabilityperceptions©BrandFinancePlc2023HighImportanceLowImportance%$XX=ISO10668GroupBrandValueSustainabilityDriver(%)SustainabilityPerceptionsScoreSustainabilityPerceptionsValueSustainabilityDriver%isderivedusingdriversanalysistodeterminetheimportanceofsustainabilitywithinasector.TheSustainabilityPerceptionsScoreiscalculatedusingBrandFinance’slatestGlobalBrandEquityMonitordata.BrandValueiscalculatedforthebrandinaccordancewithISO10668.SustainabilityPerceptionsValueValuedemonstratestheproportionofBrandValuethatisattributabletoSustainabilityperceptions.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability9‘Governance’,byaskingrespondentsthefollowingthreeattributequestions.•IsBRANDXcommittedtoprotectingthenaturalenvironment?•IsBRANDXprofessionally,ethically,andresponsiblymanaged?•IsBRANDXcommittedtosupportingcommunities&widersociety?Driversanalysisinvolvesrunningmultiplecorrelationanalysesbetweentheconsiderationofusageofabrand,andthevariousbrandattributestodeterminehowmuchexplanatoryvalueeachattributehas.Insimpleterms,theresultsofthesecorrelationanalysesarelayeredontopofoneanotherindifferentcombinationstodeterminetheirrelativeroleindrivingconsumerconsideration.Theoutputisapercentagefigureforeachattributethatcanbeinterpretedasitscontributiontorevenue,andthereforetobrandvalue.Wehaveconductedbranddriversanalysisatthesectorlevel.Asmightbeexpected,thereisconsiderablevariationbetweensectors,witharangeof2.8%forengineeringandconstruction,to22.9%forluxuryauto.Thefinalstageoftheprocessinvolvesdeterminingabrand-specific‘SustainabilityPerceptionsScore’.Todothisweaskthefollowingquestion:How‘sustainable’isBRANDXinyouropinion,intermsofitsactionstoprotecttheenvironmentandinsupportingcommunitiesandwidersociety?ModernOpenandhonest4%3%0%5%10%15%20%25%30%GreatvalueformoneyDriver(%)AttributeTrustworthyWidelyavailableInnovativeLuxuriousSustainabilityOfferssomethingdifferentCoolFun27%17%11%7%4%10%5%8%4%RoleofSustainabilityinDrivingConsideration(HouseholdProductSector)©BrandFinancePlc2023SustainabilityDriver(%)EasytodealwithGenuinelyofferssomethingdifferentInnovativeExcellentwebsite&appsGreatcustomerserviceCommittedtosupportingcommunitiesandwidersocietyPutstheircustomersfirstGreatvalueformoneyOpenandhonestGoodrangeofproductstochoosefromCommittedtoprotectingthenaturalenvironmentWidelyavailableModernTrustworthyIsprofessionally,ethically,andresponsiblymanagedNoneofthese8.0%%InsuranceTheSustainabilityDriver%isthecombinedconsiderationdriver%scoreofthethreeESGmetricsintheGBEMresearch,showingtheimportanceofSustainabilitytoconsumersinthissector.Question:Whichofthesestatements,ifany,doyouthinkapplytoBrandX?Methodology-SustainabilityPerceptionsIndex.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability10Respondentsareaskedtoselectoneoffiveoptions,whichhaveanassociatedallocationofpoints:‘Aleaderinsustainability’(10),‘takingsignificantactions’(5),‘makingsomeeffortbutcoulddomore’(2),‘makingverylimitedefforts’(1),‘makingnorealefforttobeasustainablebusiness’(0).Themeanofthesescoresisthentakentocreateanationallevelsustainabilityperceptionsscoreoutofapossiblemaximumof10.Nationallevelscoresarethencombinedonarevenueweightedbasistocreatetheoverallsustainabilityperceptionsscore.Takeninisolation,thesescorescanbeinterpretedashowsustainableconsumersperceivebrandstobe,andarethemostdirectKPIforlongtermmanagementofsustainabilityperceptions.Thesescoresalsofeedintothevaluecalculation.Thedegreetowhichabrand’sscorediffersfromthemedianforthesectorisusedtomoderatethesectordriverscore.Forexampleabrandwithasustainabilityperceptionsscoreof6andamedianforthesectorof5,wouldhaveamoderatingfactorof1.2appliedtothesustainabilitydriverforthatsector.Finally,thebrand-specificmoderatingfactor,thesustainabilitydriverforthesectorandthebrand’svaluearecombinedtoarriveatthesustainabilityperceptionsvalue.ValuingtheproportionofBrandValuethatisattributabletoSustainabilityperceptions©BrandFinancePlc2023SustainabilityDriver%isderivedusingdriversanalysistodeterminetheimportanceofsustainabilitywithinasector.%Utilities9.4%Telecoms8.7%Insurance8.0%Oil&Gas8.0%Banking6.8%BrandSustainabilityPerceptionsScoreSectorMedianSustainabilityPerceptionsScoreTheSustainabilityPerceptionsScoreiscalculatedusingBrandFinance’slatestGlobalBrandEquityMonitordata.3.994.20/BrandValueiscalculatedforthebrandinaccordancewithISO10668.$48,351m$SustainabilityPerceptionsValueValuedemonstratestheproportionofBrandValuethatisattributabletoSustainabilityperceptions.$3,915mXX=ISO10668BrandValueSustainabilityDriver(%)SustainabilityPerceptionsScoreSustainabilityPerceptionsValueMethodology-SustainabilityPerceptionsIndex.ResearchAnalysis.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability12Amazonhasthehighestsustainabilityperceptionsvalueofanybrand,US$19.9billion.Thismaycomeasasurprisetosome.Likemanyoftheworld’stopbrands,Amazonhasahugescopeforimpactduetothesheerscaleofitsoperations.Ithasbeenthefocusofregularcriticismaboutissuesasdiverseaslabourconditions,emissionsassociatedwithitssupplychains,andthepollutingeffectsofpackaging.ItisimportanttoreiteratethatAmazon’spositionatthetopofthetableisnotanassessmentofitsoverallsustainabilityperformance.Instead,wearefocussedonperception.RegardlessofAmazon’strackrecord,itisclearthatconsumersaroundtheworldhaveconfidencethatAmazonisminimisingitsnegativeimpacts,oratleastiscommittedenoughforthemtocontinuetouseitsservices.Thisshouldbynomeansbeseenasacauseforcomplacencyhowever.Thedriverscorefortheretailsectoris6.1%,demonstratingamaterialroleforsustainabilityindrivingchoice.Amazon’s$19.9billionofvalueisreliantonmaintainingitsreputationfor(acertainlevelof)sustainability.Consumerexpectationsmaychangeinresponsetoexposes,enhancedreportingrequirements,education,andmediacoverage.IfAmazonfailstokeeppacethroughaprecautionaryapproachtoimprovingitssustainabilityperformance,andtocommunicateclearlyandhonestlyaboutitsprogress,thosebillionsofdollarsofvaluecouldbeatrisk.Teslaisasomewhatmoreexpectedstrongperformer.Teslaisnotonlyavaluablebranddrivenbyhighrevenueforecasts,butitisalsowellknownasapioneeroftheelectricvehiclesandbatterytechnologythatareaidingthetransitiontoalowercarboneconomy.Thisimagehasclearlycarriedacrossintotheperceptionsheldbyglobalconsumers.Teslahasthehighestsustainabilitydriverscoreofanybrand,at26.9%,resultinginasustainabilityperceptionsvalueofUS$17.8billion.TheLuxuryAutossectoraccountedforanumberofbrandsthatperformedextremelywellintermsofsustainabilityperception,suchasPorscheandMercedes-Benz.Theresearchhasrevealedtheimportantroleofsustainabilityperceptionindrivingchoiceamongstconsumersinthesector,reflectedthroughanaveragedriverscoreof22.9%.Itmightseemcounterintuitivethatbrandsassociatedwithhighfuelconsumptionaresoreliantonareputationforsustainability.However,ourresearchhasfoundthatatthepremiumendofallsectors,sustainabilityplaysapowerfulrole.Inluxuryauto,wherethepurchaseisResearchAnalysis.LargestSustainabilityPerceptionsValue©BrandFinancePlc2023🇳6🇪7🇳8🇳9🇪10🇸1🇸3🇸4🇸5🇸26.27US$8.4bn4.44US$8.1bn4.55US$8.0bnUS$7.4bn5.64US$6.5bn4.744.404.504.744.285.43US$19.9bnUS$14.7bnUS$14.6bnUS$9.0bnUS$17.8bnBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability13ResearchAnalysis.discretionaryandthebrandispubliclyexpressed,theroleofsustainabilityisfurtherenhanced.Afterluxuryauto,thereisanotabledipindriverscores,butothersectorsinwhichsustainabilityplaysapowerfulrolearesoftdrinks(13.7%),supermarkets(12.6%),media(10.1%)andcosmetics(10%).Forsoftdrinksandsupermarkets,thepotentialimpactoftheproductsinquestionisalotmoretangibleforconsumersthaninmanysectors,beitplasticpollution,deforestation,orfoodmiles.Incosmetics,manybrandshavefordecadesfocusedmarketingcommunicationsonthe‘natural’qualitiesoftheirproductsandavoidanceofanimaltesting.Thereisalsovariationintherolesofthesub-elementsofsustainability,i.e.environmental,social,andgovernanceconcerns.TheHouseholdApplianceandMediasectorshavesimilaroveralldriverscoresforsustainability(10%),howeverthisiswherethesimilarityends.0510152025LuxuryAutomobilesSoftDrinksSupermarketsAutomobilesOil&GasFoodCosmetics&PersonalCareBeersBankingAirlinesHouseholdProductsInsuranceApparelRestaurantsLeisure&TourismHealthcareServicesTechPharmaEngineering&Construction22.9%13.7%12.6%9.4%8%6.6%10%9%6.8%6.2%10%8%6.7%5.2%4.8%3.1%4.7%3.1%2.8%RoleofSustainabilityinDrivingConsiderationbySector©BrandFinancePlc2023SustainabilityDriverScore(%)BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability14ResearchAnalysis.RelativeImportanceofEnvironment,SocialandGovernancesustainabilitydrivers©BrandFinancePlc20235%4%3%2%1%0CommitedtoprotectingthenaturalenvironmentIsprofessionallyethicallyandresponsiblymanagedCommitedtosupportingcommunitiesandwidersocietyDriver%ESGForhouseholdproducts,acommitmenttoprotectingthenaturalenvironmentisthestrongestdriver,at4.3%.Itsgovernanceandsocialdriverscoresare3.2%and2.4%respectively.Thepotentialenvironmentalimpactofhouseholdgoodsviachemicalrunoff,plasticwasteandtransportemissions,thatareofincreasingconcerntoconsumershelptoexplainthis.Incontrastinthemediasector,theenvironmentisofrelativelylimitedconcern(2.3%),whilethegovernanceandsocialdrivershaveamorepowerfulrole.Concernovermediabias,politicalinfluenceandfakenewscouldbehelpingtodrivethis.Aspartoftheanalysis,weevaluatehowsustainableeachbrandisperceivedtobe,allocatinga‘SustainabilityPerceptionsScore’.Takeninisolation,theimpactofrevenuesisremovedtoseewhichbrandsconsumersthinkarethemostcommittedtosustainability.Onthismeasure,Tesla,IKEAandPatagoniaperformedwellacrossawiderangeofmarkets.LushandTheBodyShopscoredveryhighlyintheUK.InFrance,YvesRocherandtyrebrandMichelinstoodout,whileBraziliancosmeticsgiantNaturascoredhighlyinitshomemarket.Furtheranalysisofsustainabilityperceptionscanbefoundinthefollowingarticle.•HouseholdProducts•MediaBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability15SustainabilityPerceptionsScores.Tesla,bestknownforitsmanufacturingofelectricvehicles,receivedstrongsustainabilityperceptionsscoresacrosstheboardinBrandFinance’sresearch.TeslaisaleaderintheEVmarket,andanincreasinglyimportantplayerinsolarpowerandbatteryproduction.Itdefinesitsmissionasto‘acceleratetheworld’stransitiontosustainableenergy’.Tesla’scommitmenttosustainabilityistwofold.Firstly,itproducesproductsandservices,suchaselectricvehicles,thatreplacelesssustainabletraditionalalternatives.In2021itsoldcloseto1millionelectricvehicles.Secondly,itproducessolarpanels.Teslaclaimsthesehavegeneratedmoreelectricitythanhasbeenconsumedbyitsvehiclesandfactoriesbetween2012and2021.Teslacontinuestoseesuccessinitsmarketsandcontributessignificantlytotheinnovationandadvancementofthecapabilitiesofelectricvehicles,sustainableenergysources,andsustainabletechnology.Despitehavingsustainabilityascentraltoitsbrand,Tesla’scommunicationofitssustainabilityinitiativesisrelativelylimitedconsideringtheimpactthatithas.Thisispotentiallyduetoaworrythatthebrandistoodefinedbysustainability.However,BrandFinance’sresearchsuggeststhatthisworryisunwarranted,andinfact,havingastrongsustainabilityperceptionwillonlyincreaseconsumerchoice,particularlyintheluxuryautosector.LuxuryAutobrandsperformstronglySomewhatsurprisinglytheLuxuryAutossectoraccountedforanumberofbrandsthatperformedextremelywellintermsofsustainabilityperception.BrandFinance’sresearchhasrevealedtheimportantroleofsustainabilityperceptionindrivingchoiceamongstconsumersinthesector,reflectedthroughanaveragedriverscoreof29.4%.Thisislikelydowntothewidelydiscussednegativeimpactthatcarsandtheautoindustryhastraditionallyhadontheenvironmentbeingattheforefrontofconsumers’mindswhenmakingpurchases.Thisisparticularlythecaseamongstconsumersmakingdiscretionarypurchasesintheluxuryautomarket,andwhoarelessrestrainedbybudget.Ferrariforexample,performedparticularlywellinItalywithascoreof5.83.ThisispartlyduetoFerrari’sstronghome-grownloyaltyamongstconsumersinItaly.However,italsocomesfromitsclearlycommunicatedsustainabilitystrategy.Ferrariisenteringanimportantdecadeofdevelopmentinwhichsustainabilitywillbecentraltoitsstrategicdirection,pushingittowardscarbonneutralityby2030.Ithasalsolookedtodevelophybridandelectrictechnology,highlightedthroughitslaunchofthe296GTBplug-inhybridmodelin2021.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability16SustainabilityPerceptionsScores.Ferrari’scontinuedinvolvementinFormula1alsocontinuestoraiseitsbrandprofile.Itwasoneofonlythreeteamspraisedforitssustainabilityeffortsinthesport.ThishasallowedFerraritofurthercommunicateitsESGeffortstoconsumersandenhanceitsbrandperception.Otherluxuryautobrandsalsoscoredwell,forexample,PorscheandMercedes-Benzwhohavebothhaveincorporatedsustainabilityintothecoreoftheirbrandsstrategies.Mercedeshasalsotakenonestepfurthertowardsanall-electricfuturethroughitsdevelopmentofnext-generationhigh-performancebatterycellsandmodules,andtheannouncementoftheexpansionofitspartnershipwithChinesebatteryproducerCATL.SustainabilitydriveschoiceintheCosmeticssectorTheCosmeticssectoralsohadahighaveragedriverscoreof10%,highlightingtheimportanceofsustainabilityindrivingconsumerchoiceinthesector.Manybrandswithinthecosmeticssectorhavethemesrelatingtonature,theenvironment,andbodyimageattheheartoftheirbrandidentities.Thishassubsequentlyincreasedthewiderimportanceofsustainabilityindrivingchoiceamongstconsumerswithinthesector.TheBrazilianbrandNatura,forexample,performedwellinitshomemarketwithasustainabilityperceptionscoreof6.25.Hailingfromoneofthemostbio-diversecountriesonearth,sustainabilityiscentraltonaturaasabusinessandbrand.Itsstrategicdecisionshavebeenconsistentlyguidedbythis,becomingthefirstBraziliancosmeticsbrandtoofferrefillsin1983.ItalsolaunchedtheAmazonProgrammein2011,todirectinvestmentintothearea.Theseactions,amongstothers,earnednaturathecovetedUNGlobalClimateActionAwardin2019,andanimpressivesustainabilityperceptionsscore.Brandshavetendedtoperformverywellintheirhomemarkets,asinthecaseofnatura.Consumersareinherentlyloyaltowardshome-grownbrands,whooftenhaveaproportionallylargerESGimpactintheirhomemarket.Itisalsoofteneasierforbrandstocommunicatetheirsustainabilitymessagestothosewhocanrelatetomorelocalizedissues.TwoFrenchbrands,Yves-RocherandRoche-Posaydemonstratethisparticularlyclearly,bothperformingbestintheirhomemarket,scoring5.87and5.85respectivelyinFrance.Inasimilarwaytonatura,Yves-Rocherwasbuiltuponadeepconnectiontonature,whichcontinuestoguideitsbusinessdevelopmentandstrongcommitmenttosustainability.Bydoingallgrowing,harvesting,andmanufacturingin-house,thebrandismoreaccuratelyabletocontrolitsenvironmentalimpact.Thishascreatedhighbrandequityamongstsustainablymindedconsumersandhasbeeninextricablylinkedtoitsgrowthasabrand.Lush(7.13),TheBodyShop(6.83),andDove(5.77)allscoredhighlyinsustainabilityperceptionscoreintheUK.Allthreehavesustainabilitythemedstoriesatthecoreoftheirbrandidentitiesandhavesuccessfullycommunicatedthesetoconsumers.TheBodyShopwasapioneerwithinthecosmeticsindustry,beingoneofthefirstbrandstohaveESGconcernsasitsmaindrivingforce.Ithasusedthistonotonlyfightforthebetterpreservationoftheplanetandamoreequalworld,butalsoasakeymarketingtool.ThesuccessofthishasbeenreflectedinTheBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability17SustainabilityPerceptionsScores.BodyShop’sBCorpcertifiedstatus.Lushhasfollowedasimilarmodel,particularlyfocusingonitsnaturalproductsanditspositiveimpactontheenvironment,buildingstrongloyaltyamongstconsumers.Despitehavingastrongenvironmentalpolicy,DovehasleveragedanotherESGmatter,bodypositivity,asitscentralbrandimage.ItisafoundingpartneroftheBeRealCampaign,amovementformedtochangeattitudestobodyimage,andhaveconsistentlypromoteditsinclusiveconceptof“RealBeauty”initsadvertisingcampaigns.Thesecontinuedeffortstowardsthepromotionofbodypositivityhaveraiseditsethicalperceptionamongstconsumers.AllthreeUKbasedbrandshaveclearlypositionedthemselvesaroundstrongideologiesandcommitmentstowardsprotectingtheplanetandcreatingabetterfuture.ThesebrandshaveactivelytakenastanceandsuccessfullyleveragedPRfromthistopromotetheirmessagesandbuildastrongsustainabilityperception.CountryBreakdownPatagoniaisanotherbrandthatperformedwellinsustainabilityperceptionamongstconsumersintheUKmarket.In2022,founderYvonChouinardhandedownershipofPatagoniatoacharitabletrustdedicatedtoclimateandotherenvironmentalcauses.MuchofPatagonia’svalueisreliantonitslongstandingcommitmentandperceivedsustainability.Thisactsasapowerfuldriverindeterminingthedecisionsofcustomers,investors,potentialemployees,regulators,andothers,inthenaturefocusedsectorthatPatagoniaoperatesin.FrenchcartyreproducerMichelinperformedwellinFrance,earninga6.79sustainabilityperceptionscore.Thetyreindustryisbeginningtotakestepstowardsaddressingtheenvironmentalissuescausedbytyreuse.Theseincludetyreandroadwearparticles,andtheunsustainabledisposalofoldtyres.Michelinhasledthewayinthismovement,settingitselfthechallengeofintegrating100%sustainablematerialsintoitstyresby2050.Thisentailsusingrenewableorrecycledmaterialsintheproductionofitstyreswhilemaintainingperformanceandreducingenvironmentalimpact.Itismakingpositiveprogressonthischallenge,alreadyproducingatyrethatintegrates58%sustainablematerials.Ithasalsosuccessfullycommunicatedthesedevelopmentstostakeholders,boostingitssustainabilityperceptionsscore.TheretailchainWoolworths,whichoperatesinAustralia,wasoneofthehighestscoringbrandsintheregion.Thefood-retailsectorhasincreasinglylookedtotacklesustainabilityrelatedissues,suchassingleuseplastic,foodwasteandharmfulemissions.In2022Woolworthsincreaseditsfocusoncustomerexperience,rollingoutanumberofcuratedrangeswhichweretailoredtolocalcommunities.Thisofferedmoreinclusiveexperiencestoawiderrangeofconsumers.Ontopofthis,theGroupalsocontinuedtomanagetheimpactsofclimatechange,workingtoreduceemissionsfromitsownoperationsthroughgreenelectricityandelectricvehicletrials,aswellasthephasingoutofproblematicplasticuse.ThemultinationalfoodanddrinkprocessinggiantNestléhashadamixedtrackrecordwhenitcomestoESGmatters.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability18SustainabilityPerceptionsScores.India’sTatagrouphashadphilanthropyandacommitmenttosustainabilityatthecoreofitslong-termbusinessstrategysincedayone.Forexample,ithascollaboratedwiththeEllenMacArthurFoundation(EAF)tocreateacommonunderstandingofCircularEconomicthinking,activelypromotingthiswithinTata’sbusinessesandbeyond.Thishasallowedthemtoshifttowardsindustrialprocessesthatminimisewasteandfocusonresourceproductivity.TataisalsoparticularlycommittedtosocialandphilanthropiccausesinIndia,holdingacloserelationshipwithitslocalcommunitiesandbeinginvolvedwithavarietyofeducation,health,environment,andempowermentinitiatives.Theseinitiativesimpactedover11millionpeoplein2019andcontinuetohaveapositiveimpactoncommunitiesacrossIndia.Tata’ssustainabilityperceptionisstrongamongstconsumerswithinIndia,withascoreof5.77.However,asabrandithasimminentpotentialtoaddvaluethroughfurtherleveragingthecommunicationofitsESGstrategytoaglobalaudience.HighImpactsectorstakepositivestepsforwardSomesectorsareinvariablymoredamagingtotheenvironmentthanothersbecauseoftherolestheycarryoutandmaterialsandprocessestheyuse.Somebrandswithinthesehighimpactsectorshaveincreasinglybeguntorealisetheimportanceoftakingactiontocounterthedamagecausedtotheenvironment.Thisnotonlyhelpsprotecttheplanetbutcanalsobeleveragedbybrandsthroughcommunication,differentiatingthemamongstcompetitorsandattractingstakeholders.IKEAforexample,hasinthepastbeenaccusedofcontributingtothe‘fast-furniture’trade.Thisdenotescheapandpoor-qualitymass-producedfurnituremadefromnon-sustainablysourcedmaterials.IKEAhassetoutanambitioussustainabilitystrategytobecomea‘circularbusiness’by2030.Thiswouldenablecustomerstoacquire,carefor,andpassonproductsincircularways.Everyproductwillbedesignedtobereused,refurbished,remanufactured,andfinallyrecycled,aswellasbeingmadefromrenewableandrecyclablematerial.Moreover,IKEAhascommittedtobecomingclimatepositiveby2030,Aswellashistoricallybeingalargecontributorofsingle-useplastic,Nestlehasbeeninvolvedinanumberofhigh-profilecontroversies.Theseincludefalsemarketingofproductsandallegedforcedlabourduringitsproductionprocess,amongstotheraccusations.ThesecontroversieshaveundoubtedlynegativelyaffectedNestle’sbrandequityandsustainabilityperceptionamongstconsumersinthepast.However,aswithotherfood-retailbrands,Nestlehasbeguntorealizetheimportanceofsustainabilitytoitsbrand,notonlyforprotectingtheenvironment,butalsoinbuildingupastrongbrandimage.Nestlehasnowtakenmorepositivestepstowardsamoresustainablefuture.Ithaspledgedtoreducelandfillwastetozero,andtransitionto100%renewableenergyandrecyclableorreusablepackaging.Nestlehadasustainabilityperceptionscoreof5.44inBrazil,highlightingthatevenbrandsthathavehadproblematicESGstancesinthepastcanchangeconsumerperceptionswithacommittedsustainabilitystrategyandproactivecommunicationofthis.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability19SustainabilityPerceptionsScores.nearfuture.Thishasreducedwasteandemissions,aswellasbeginningtocommunicatesustainableconsumptionconceptstoconsumerstoadoptintheirdailylives.Despitenotfeaturinginthetop5brandsinChinaintermsofsustainabilityperceptionscore,theseeffortshaveundoubtedlycontributedtoJD’sdecentsustainabilityperceptionscoreof5.51.ChinesemediagiantWeChathasthehighestsustainabilityperceptionscoreamongstChineserespondents.BrandFinance’sresearchrevealedthatrespondentsincertainregions,notablyAsia,seemtoplacehighvalueonthesocietalvalueandimpactofbusinesseswhenconsideringsustainability.WeChatisdeeplyengrainedinChinesesociety,offeringinstantmessaging,socialmedia,andmobilepayment,withover1billionmonthlyactiveusers.However,ithaslimitedcommunicationofitsESGeffortstostakeholders.ThissuggestsitsstrongsustainabilityperceptionscoreismostlikelytheresultofChineserespondentsassociatingthiswiththestrongsocietalvaluethatWeChathastothemandChinamoregenerally.StateownedtelecommunicationscompanyChinaToweralsoscoreddisproportionatelyhighlywithascoreof5.53inChina,despitealsohavinglimitedcommunicationofitssustainabilityefforts.AnotherexampleistheTaiwanesebrandTSMC’sextremelyhighscoreof6.87.TSMCiscriticaltoTaiwan’seconomyandsupplychainsaroundtheworldandhassubsequentlyrankedhighlyamongstconsumersinsustainabilityperceptionscore.meaningitwillreducemoregreenhousegasemissionsthanthefullIKEAvaluechainemits.Thisdemonstratesapositivestepintherightdirection,reflectedinitssustainabilityperceptionscoreof6.1inItaly.IKEAcontinuestocommunicateitssustainabilitystrategytoconsumersandwillhopefullypushotherbrandswithinthesectortofollowsuit.Similarly,theshippingindustryisaheavyimpactsector.Itaccountsforhighlevelsofairpollution,waterpollutionandportcongestion.GlobalcontainercarrierbrandEvergreenhasledthewayinaligningitsbusinessstrategywiththeUnitedNationsSustainableDevelopmentGoals(SDGs).80%ofEvergreen’scurrentfleetislessthan10yearsold,allowingmaximumefficiencywithlowerenergyconsumption.Ithasalsoobtaineddoublecertificationforitsgreenhousegasemissioninventory.ThisaccuratelytrackscurrentemissionssoEvergreencansetproactivecarbonreductiontargets,includinga50%reductionofCO2emissionratesby2030.Itisinitiativessuchasthesewhichhaveincreaseditssustainabilityperceptionamongstconsumers,earningita6.01scoreinItaly.ChinesebrandJDLogisticshasalsolookedtocounterthesector’shighemissionsandincreaseitssustainabilityperceptionamongstconsumers.ThroughitsGreenStreamInitiativeandRecyclingProgram,JDnowoffersre-usablepackagingonthousandsofproductsandplanstomove100%ofitslogisticspackagingtorecyclableandreusablematerialsintheInsights.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability21SustainabilityReporting.IntroductionCommunicationonsustainabilityperformancewasformanyyearsatbestamixedbag,withonlyasmallnumberofcompaniesprovidinganymeaningfulinformationandonlyasubsetoftheseprovidingreliable,verifiableinformation.Asthecommercialimperativetoprovideforinformationhasgrown(toaddresscustomerconcernsandalignwiththerequirementsofESGinvestmentproducts),thenumberofbusinessespublishingsustainabilitydatahasgrown.Morerecently,thelegalimperativehasalsoforcedmanybusinessestopublishsustainabilitydata,ascountriesintroducelegalrequirementsforbusinessestoreportontheirimpactandexposuretocertainsustainability-relatedrisks,particularlyclimate.Thestandardsthatareappliedvarysignificantlybyjurisdiction,thoughthereisanincreasingpushtoharmonizetheseatagloballevelbyorganizationssuchastheISSB.Inthisarticlewe’llexplorethestateofsustainabilityreporting,currentrequirements,andthedirectionoftravel.DefinitionsESG/sustainabilityreportingisthedisclosureofdatarelatedtotheEnvironmental,SocialandGovernanceaspectsofabusiness.Suchreportingistypicallyformallypresentedinasustainabilityreport,inthesustainabilitysectionofanannualreportandinformatsalignedwithspecificsustainabilityreportingstandards,socanbedistinguished,toanextent,frommoreinformalcustomer-orientatedsustainabilitycommunicationinadvertising,PRetc.RobertHaighStrategy&SustainabilityDirector,BrandFinanceBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability22Aswithtraditionalfinancialreporting,amaterialitythresholdisapplied.TheIFRSdefinesmaterialityasfollows:“Informationismaterialifomitting,misstatingorobscuringitcouldreasonablybeexpectedtoinfluencethedecisionsthattheprimaryusersofgeneralpurposefinancialstatementsmakeonthebasisofthosefinancialstatements,whichprovidefinancialinformationaboutaspecificreportingentity.”Inasustainabilityreportingcontext,materialinformationincludesinformationaboutthegovernanceofabusiness,oritsexposuretoenvironmentalorsocialforcesthatcouldaffectdecisionstakenonthebasisoffinancialaccountsalone.Forexample,acompany’sportfolioofrealestateassetsmaybeexposedtorisingsealevels,orthesupplychainsofanCPGbusinessmaybedisruptedbychangingagriculturalconditions.BusinessesareofcoursenotjustexposedtoESGrisksbut,unfortunately,canexacerbatetheircausestoo.Thishasledtothedevelopmentoftheconceptof‘doublemateriality’,forwhichthereisasyetnotafixeddefinition.Onedefinitionofdoublematerialitywouldincludenotjustdirectfinancialexposurebutalsofinancialimpactofthelegalandreputationalconsequencesthatabusinessfacesasaresultofunsustainablebehavior(anexampleofwhichwouldbethesustainability-perceptionvaluationsincludedinthisreport).Ofgreaterconcerntomanystakeholdersthanimpactonthebusiness,istheimpactofthebusiness.Anevenbroaderdefinitionwouldalsoincludeimpactsthatcannotyetbeeasilyfinanciallyquantified.Manystakeholdergroups(suchasemployeesorcivilsociety)wouldalreadyconsiderabusinessesnegativeexternalitiestobematerial(regardlessofdirectfinancialimpact)butevenfinanciallyorientatedgroupssuchasinvestorswithanESGmandatecanbeeagerconsumersofthisinformation.ReportingStandards–ProfusiontoConvergenceBysomeaccountsthereareover600frameworkstofacilitatethisreporting,butbyfarthebestknownarethe‘groupoffive’,theCDP,ClimateDisclosureStandardsBoard(CDSB),GlobalReportingInitiative(GRI),InternationalIntegratedReportingCouncil(IIRC)andSustainabilityAccountingStandardsBoard(SASB).Theframeworksoperatedbythisgroupvaryconsiderably.Forexample,theSASBformatismorefinanciallyorientated,andtakesatighter,financiallydrivenapproachtodoublemateriality.GRIontheotherhandadoptsabroaderdefinitionrequiringimpactsacrossawiderrangeoftopics,makingit,somesay,moreresourceintensive.MeanwhiletheIIRCformatintroducesanintegratedassessmentofsourcesofvaluecreation(financial,manufactured,intellectual,human,socialandrelationship,andnaturalcapital)creatingapotentiallyusefulsummaryforexternalconsumers,butonethatisarguablylessgranular.Evenamongstthisnarrowergroup,concernhasbeenexpressedbysomecommentatorsaboutthevariationinthetypesandextentofinformationdisclosed.Asaresult,thegroupoffiveannouncedinSeptember2020thattheywouldworktogethertowardsamoreunifiedstandard.Sincethen,therehasbeenrapidconsolidationandprogress.Deliveringonsustainabilitythroughcomprehensionandcommunity.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability23businessesusingastrongdefinitionofdoublematerialitytoidentifythetopicsonwhichtobasetheirdisclosures.Ataregionallevel,therehasbeenarapidcatchupamongstAsianbusinesses,with89%ofthetop100firmstherereportingcomparedtofewerthan50%adecadeago.FirmsinAfricaandtheMiddleEast(atagenerallevel)havefurthertogo,with56%reporting.Atatopiclevel,reportingonenvironmentalrisksismostprevalent,with64%ofbusinessesreportingonsuchriskscomparedto49%forsocialrisksand44%forgovernance.Withinenvironmentalrisks,climaterelatedrisksdominate,with80%ofG250businessesreportingonclimaterelatedrisks.Incontrast,only46%ofthesebusinessesreportonbiodiversity.However,followingthelandmarkCOP15inMontrealandthedevelopmentoftheTaskforceonNatureRelatedFinancialDisclosuresthatpicturemaychangefairlyrapidly.RecentDevelopmentsandTheFutureThemajorityofsustainabilityreportingisperformedvoluntarily.Compulsorysustainabilityreportingremainsinitsrelativeinfancy,howeverthepictureischangingrapidly.TheIIRCandSASBmergedin2021toformtheValueReportingFoundation.Subsequently,boththeValueReportingFoundationandCDSDwereconsolidatedintotheIFRSfoundationtoprovideresourcesfortheIFRS’sInternationalSustainabilityStandardsBoard(ISSB),whichwilldrivethecreationofunifiedreportingstandards.AlsoofnoteistheTCFD.In2015,followingtheParisClimateConference,theFinancialStabilityBoardandG20createdtheTaskforceonClimateRelatedFinancialDisclosurestocreateamoreharmonizedandcomparablemeansofreportingclimate-change-relatedfinancialrisks.TheTCFDandISSBareworkingcloselytogethertointegratetheprinciplesoftheTCFDintothenewISSBstandards.TheExtentofSustainabilityReportingManyoftheworld’slargestcorporateshavetakenaprecautionaryapproachandbeguntoreportonavoluntarybasisusingoneormoreoftheseframeworksandhavebeenreportingatleastsomesustainabilityinformationforatleastadecadeasthefollowingchartshows.Therobustnessofidentificationofmaterialtopicsismorevariablehowever,withonly30%evenofG250Deliveringonsustainabilitythroughcomprehensionandcommunity.100806040200Globalsustainabilityreportingrates(1993-2023)©BrandFinancePlc2023•N100•G2501993199619992002200520082011201420172020202335%45%64%93%96%83%92%96%95%93%12%18%24%53%73%18%64%75%41%71%77%79%Base:5,800N100companiesand250G250companiesSource:KPMGSurveyofSustainabilityReporting2022,HPMGInternational,September2022BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability24ManynationshavecreatedreportingrequirementsforbusinessesbasedonTCFD.TheUKisoneexample.Underthe2022legislation,companiesofover500people“willberequiredtoincludedisclosuresonclimatechangerelatedrisksandopportunities,wherethesearematerial.Thedisclosuresshouldcoverhowclimatechangeisaddressedincorporategovernance;theimpactsonstrategy;howclimaterelatedrisksandopportunitiesaremanaged;andtheperformancemeasuresandtargetsappliedinmanagingtheseissues.”ManyothercountriessuchasNewZealand,Canada,JapanandFrancehaveintroducedsimilarlegislation.Malaysiaisparticularlynotableforhavingmadesustainabilityreportingarequirementforlistedbusinessessince2016.OneofthemostimportantpiecesofsustainabilityreportinglegislationhoweveristheEU’sCorporateSustainabilityReportingDirective(CRSD),whichwasratifiedonDecember16th2022andcomesintoeffectinJanuary2023.TheCRSDisnotableforboththerangeofbusinessestowhichitwillapply(anyEUlistedbusinesswithatleast50employeesandEUR8millioninrevenueiscovered)andtherangeoftopicscovered,includingclimatechange,pollution,waterandmarineresources,biodiversityandecosystems,andresourceuseandcirculareconomy;socialtopicsincludingthebusiness’workforce,workersinthevaluechain,affectedcommunities,consumers,end-users;andagovernancethemerelatingtobusinessconduct.EFRAG(theEUagencyresponsibleforCSRD)hasstatedthatitwillworkcloselywiththeISSB,ashavetheTCFDandGRI,toensurethattheambitionofatrulyglobalsetofstandardcancontinuetobepursued.InMarch2022,theISSBpublishedtwodraftstandardsonclimateandgeneralsustainabilityrelateddisclosuresandtheformalversionsofthestandards(IFRSS1andIFRSS2)areexpectedin2023,sowhenthenexteditionoftheBrandFinanceSustainabilityIndexisissued,wecanexpectsignificantprogress.Deliveringonsustainabilitythroughcomprehensionandcommunity.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability25Methodology-SustainabilityPerceptionsIndex.TaskForceonClimateRelatedFinancialDisclosuresEst.2015bytheFinancialStabilityBoardatrequestofG20FinanceMinistersandCentralBankGovernors.ValueReportingFoundationEst.2021bySASBandIIRCtomergeeffortsinternationally.SustainabilityAccountingStandardsBoardEst.2011byJeanRogers"tohelpbusinessesandinvestorsdevelopacommonlanguageaboutthefinancialimpactsofsustainability."InternationalIntegratedReportingCouncilEst.2010inresponsetoglobalfinancialcrisisbyGRI,theInternationalFederationofWales'AccountingforSustainability.ClimateDisclosureStandardsBoardEst.2007atWorldEconomicForum.InternationalSustainabilityStandardsBoardEst.2021byIFRSFoundation,formallyconsolidatingCDSBandVRF.InternationalSustainabilityStandardsBoardEst.2021byIFRSFoundation,formallyconsolidatingCDSBandVRF.GlobalReportingInitiativeEst.1997inBoston,MA,followingpublicoutcryafterExxonValdezoilSpill.CarbonDisclosureProjectEst.2000at10DowningStreetas"firstplatformtoleverageinvestorpressuretoinfluencecorporatedisclosureonenvironmentalimpact.InfluencesComplementsSource:AuditBoard.comConsolidatesBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability26Deliveringonsustainabilitythroughcomprehensionandcommunity.IntherecentCannesLions2022,therewasalotoffocusonbrandsandsustainability.Thisincludedgreatcontentanddialogueonhowbrandsandcreativitycansolvesomeofthedireclimate,environmental,andecologicalproblemsthatweareexperiencingtoday.Itwasalsodiscussedhowthroughgenuineandsustainedcommitmentbrandscancontributetowardsthebillandpaytheirsharetocoursecorrectandbringdowntheheat.P&G’sMarcPritchardfurtherstressedtheimportanceofcreativityasakeyenabler,commenting:“thereistremendousvaluefromcreativityasaforceforgrowthandaforceforgood”.Allrelevantandcorrect.Buildingonthisfurther,thefactremains,anddataprovesthatsustainablebrandsgrow6xfastercomparedtoothers,basedonareportonthesustainabilitycommitmentofbrandsbyKantar.Inthesameresearch,itisoutlinedthatbrandsthatareperceivedtohavehighcommitmentandauthenticityinthespaceofsustainabilityhavegrowntwicetherateofothers.So,itpaystobesustainableinitsrealsense.However,asaresult,trendssuchas“Green-washing”and“Green-hushing”havereallytakenflight.Green-hushingisaconsequence;itiswhenbrandsandbusinessesavoidtalkingaboutsustainabilitytargetsorprogressduetofearofaccusationsofGreen-washing.So,onecanonlyimaginetheutterchaosthatisensuinginboardroomsoverdecisionspertainingtothistopic.Todoornottodo?Frombalancingprofits,toprotectinglong-termbrandvalue,investinginthelongterm,andthepressuresofprioritizingWallStreetVshighstreet.Inthemidstofallthis,alackoforiginalityissurfacing.Morethanever,weseeandhearbrandsusingsimilarclaimsormotivestoshowcasetheirintentandambitiontodogood.Insomecases,thisisgenuineintent,butformost,it’satrendandatick-box;atacticVsalong-termambitiontosolvereal-lifechallenges,andsimplynotbelievable.Butbeyondbelievabilitywhichisamajorcredibilityissueforbrandsandbusinessestoovercome;researchalsoshowsandprovesthatbecauseoftheplethoraofsameforsamemessagesthatarebeingsowidelyusedbyeverysinglebrand,uniquenesstostandoutandconnecthasalsobecomealmostnon-existent.Consumerstoalargeextentdonotunderstandthetermsandlingobeingusedandoverused.NetZero,Offsetting,NetClimateNegative;CarbonNeutral,ClimatePositive,CO2Kge,CarbonScoring,amongstmanymore.Thebasicconstructofgoodcommunicationessentiallyfollowsalinearmodelofcomprehensiontoaction.Thismeansfirstunderstandingthemessageandthentakingactionornot,dependingonthelevelofengagement.Icancarefullysaythatmostsustainabilitymessagesbyourindustrybrandsarenotunderstood,orbelieved.Ifyouactuallytestalotofsustainabilitycommunication,youwillfindabigdeltaoncomprehensionandtrueengagement.Verysimply,iftheconsumercan’tpictureintheirmindhowyouasabrandintendtomaketheworldmoresustainable,Ithinkit’sfairtosaythatwehaveajobtodo!Inorderforsustainabilitytobecomeatruedriverofyourbrandequity;inabelievable,relatable,andconvincingmanner;itneedstobesimple.It’sanactthatneedstobreakdownthewallsofcomplexityformedaroundthistopic.Itneedstousesimplehumanlanguagetoexplaincomplexmechanics.Andmoreimportantly,itneedstoinvolvethecommunity.Thislastpointisperhapsthemostimportantsuccesscriterionforasuccessfulsustainabilitypromise.SasanSaeidiWorldPresident&Chairman,InternationalAdvertisingAssociationBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability27So,insummary:1.Behumanandusesimplelanguage.Inorderforyoursustainabilitycommitmenttobebelieveditneedstogotoacommunitylevelandinvolvepeople.Simplelanguageandtermshelpcrackthecode.Beoriginalinthewayyouwanttoexplaincomplexterms.2.Createamovementthroughlong-termcommitments.RupenDesai,theex-CMOofDolesaidthatbrandsneedtofindthesuperpowerthatletsthemscaleinthisfield.So,scalingupsolutionsiskeyfortraction.Yourcommitmentneedstogofromone-offexperimentstolong-termpracticalmovements.Endopportunisticmarketingandstartlong-termmeaningfulmovements.3.Ensureyourpromisesareaccessibletoall.Tryhardtodemocratizesustainabilityandmakeitaccessibleandeasyenoughforpeopletogetinvolvedwith.Beinclusive.4.Paintthepictureofsuccessthroughsmallergoals.Ensuringwesetsmallergoalstoachieveaspartofthelargertargetisessential.Thiswayyourbiggergoalsbecomeattainable.Bysettingbite-sizegoalsyoucanseeprogressandstriveformore.Humanbeingsstriveonprogress..Soyes,weagreethatconsumersandcommunitiesexpectbrandsandindustrytostepuptheirsustainabilitycommitmentmorethanever.But,forthemostpart,wearenothelpingourcause.It’sreallytimetoensurewegetmorecreativeandmorehumanwhenitcomestoourmessages.Let’sputourselvesintheshoesoftheconsumerandgobeyondastickerandabuzzwordonourpackagingandcommunication,thatthenextbrandisalsousing.Wearetalkingtoacommunityofpeople,let’stryhardertogettheminvolvedandengaged.SasanSaeidi,istheCEOofWundermanThompsonNewYork(WPP)andtheGlobalclientleaderforTheCoca-ColaCompanyatWundermanThompson.HealsoservesastheWorldPresidentandChairmanoftheInternationalAdvertisingAssociation.SasanSaeid:Deliveringonsustainabilitythroughcomprehensionandcommunity.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability28TheParadoxofGreenwashing.GreenwashingisatermusedbycompaniesforadvertisingormarketingspininwhichgreenPRandmarketingaredeceptivelyusedtopersuadethepublicthataproductorbrandisenvironmentallyfriendly.Consumerdemandandthegrowingsuccessofgreenmarketinggavebrandsthetoolstocreateproductdifferentiationwithintheirmarkets.Researchshowsthatconsumersconsidersustainabilityasaprimaryreasonfortheirchoiceofproductsandbrands.Asaresult,Sustainabilityhasnowbecomeakeypartofmarketers’businessstrategiesandtheoutcomehasseenanincreasednumberofbrandsusinggreenmarketingclaimsandagrowthinconsumerenvironmentalawareness.Greenwashingisabrainchildofthistrend:intheshortterm,ithelpsgrowconsumerdemand,butinthelongterm,itdestroysconsumerconfidenceintheargumentasitisoftendifficulttodistinguishmisleadingclaims.Brandsmisleadinginformationmayresultinadecreaseinconsumerconfidenceinthevalueofgreenclaims.Overall,theuseofgreenwashingcanbeadouble-edgedswordforcorporations,asitmayinitiallyattractenvironmentallyconsciousconsumers,butultimately,itleadstodecreaseddemandfortheproductsinquestion.Brandsareresponsibleforbeingtruthfulandtransparentabouttheirenvironmentalpractices,astheperceivedrealityoftheireco-friendlinesscanhaveamajorimpactonthebranditselfandconsumerbehavior.HervédeClerckVPIAAGlobal,SustainabilityCouncilChairFounder,Adforum.comDreamLeaderACT-Responsible.orgBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability29Theeco-friendlycontradictionAkeycontradictionofgreenwashingisthatthemoreacorporationengagesinenvironmentallydamagingpractices,themorepressureitmayfeeltoinvestineco-friendlymeasurestoappearmoresustainable.However,whenacompanyspendssignificantlymoreresourcesonadvertisingbeing"green"thanonenvironmentallysoundpractices,criticsmayarguethattheseeffortsdonotaddresstherootcauseoftheproblem.Companiesshouldfocusoninvestmentsthatimpacttheircoreenvironmentalfootprintandavoidmakinggeneralenvironmentalclaims.PerceptionisrealityPerceptionisasignificantfactorinfluencingconsumerpurchasingintentions.Perceptionisarealitywhenitcomestogreenwashing,asconsumersoftenbasetheirpurchasingdecisionsonhowabrandpresentsitselfasbeingeco-friendly.Marketershaveanimportantresponsibilityinbeingauthenticandtruthfulwhenintroducingtheirenvironmentalclaimsandmonitoringhowitisperceivedbytheconsumer.Wearepartoftheproblem.Let'sbepartofthesolutionThenegativeconsequencesofgreenwashingaffectbothconsumersandcompaniesinthegreenmarketplacealike,regardlessofwhethertheyengageingreenwashingornot.Trustisthecornerstoneofasuccessfulconsumer-brandrelationshiptherefore,theincreasingprevalenceofgreenwashinghascreatedanegativebacklashagainsttheconceptofsustainability,resultinginconsumerslosingconfidenceinthegreenmarket.Overthelasttwentyyears,ourindustryhasplayedanincreasinglyimportantroleinthesustainabilityagenda.Inresponsetoconsumerpressure,manybrandshaveembracedsustainabilityintheircorporatepractices.Communicationshavetakenanactivestandonresponsibility,highlightingauthenticity,transparency,andtruthasessentialelementsofthemarketingmix.HervédeClerck:TheParadoxofGreenwashing.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability30Creatingasmarterregulatoryenvironmentthatprotectsconsumers,allowsbusinessestothrive,andhelpssavetheearthtoo.In2021,theInternationalConsumerProtectionEnforcementNetworkreleasedtheresultsofafirst-of-its-kindreviewconductedonenvironmentalclaimsbeingmadeonwebsitesaroundtheworld.Thereview,whichwasledbytheUnitedKingdom’sCompetitionandMarketsAuthorityandtheNetherlandsAuthorityforConsumersandMarkets,foundthat40%ofthosewebsitesmaybeengagedingreenwashing.Thesefindingsdidn’tcomeasabigsurprisetoregulatorsandotherswhohavebeenpayingattentiontothewaysthatmarketersarepromotingtheenvironmentalbenefitsoftheirproducts.TheInternationalChamberofCommerce,forexample,hadalreadyembarkedonaprojecttoupdateits“FrameworkforResponsibleEnvironmentalMarketingCommunications,”whichitreleasedlaterthatyear.DuringanIAA“firesidechat”IrecentlyhadwithRaeleneMartin,ICC’sHeadofSustainability,sheexplainedthatoneofthereasonstheICCdecidedtoupdateitsguidelineswasthat“withtheproliferationofenvironmentalmarketingclaims,therewassomeconcernaroundgreenwashingandwhethersomeofthoseclaimswereactuallysubstantiated.”It’snotjusttheICCthathastakennotice.Alittlemorethanayearago,forexample,theUK’sCompetitionandMarketsAuthoritypublisheditsown“GreenClaimsCode.”InreleasingtheCode,AndreaCoscelli,theCMA’sChiefExecutive,said,“We’reconcernedthattoomanybusinessesarefalselytakingcreditforbeinggreen,whilegenuinelyeco-friendlyfirmsdon’tgettherecognitiontheydeserve.”Further,intheUnitedStates,theFederalTradeCommissionjustannouncedthatitisplanningtoupdateits“GuidesfortheUseofEnvironmentalMarketingClaims,”forthefirsttimeinoveradecade.Withregulatorsandself-regulatorsbelievingthatwehaveaseriousgreenwashingproblem,andactivelyengagingineffortsaroundtheworldtoaddressitthroughregulation,enforcement,andothermeans,whatstepsshouldadvertisersbetakingrightnowtohelpprotectthegreatvaluethattheirgreencredentialsbringtotheirbrandandtoavoidstayingoutoflegaltrouble?Whilegreenmarketingmightfeellikethewildwestrightnowininsomeareas,andwhiletherearecertainlysomeunansweredquestions,forthemostpart,therulesgoverninggreenmarketinginmanyjurisdictionsarewell-established.Withtheriskofenforcement(aswellastheriskofclaimsbeingbroughtbycompetitorsandconsumers)increasingasattentionturnstogreenmarketingissues,advertisersshouldbeproactivelyreviewingtheirenvironmentalmarketingclaimstoensurethattheyarelegallycompliant.Althoughthespecificrulesvarybyjurisdiction,onethingthateveryadvertisershoulddoistoreviewtheirmarketingwithaviewtowardreplacingambiguous,generalenvironmentalbenefitclaimsthatcouldhavethecapacitytomisleadconsumerswithclaimsthatpromotespecificenvironmentalbenefitsthatarebackedupbypropersubstantiation,inaccordancewithlocallegalrequirements.Whentalkingaboutenvironmentalbenefitsthatconsumersmaynotbeasfamiliarwithorthatmaybeinterpretedinmultipleways–suchas“sustainable,”“carbonneutral,”or“circularity”–marketersshould,ataminimum,takethetimetoexplaintoconsumerswhattheymeanbythoseterms,soconsumersdon’ttakeawayunintendedmessages.JeffreyA.GreenbaumChair,IAAPublicPolicyCouncilBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability31Thisisalsoacriticaltimeforadvertiserstoengageinameaningfuldialogueabouttheregulationofenvironmentalmarketingwithregulatorsandself-regulatoryorganizations.AtIAA,webelievethatsmartregulation–whichistheproductofanopendialoguewithindustryandotherstakeholders--canbothprotectconsumersandcreatearegulatoryenvironmentthatallowsbusinessestothrive.Andwhenwe’retalkingaboutgreenmarketing,smarterregulationcanalsoincentivizebusinessestocreateenvironmentallypreferableproducts,makingiteasierandcheaperforconsumerstogetthem,andultimately,helpaddresstheworldclimatecrisis.Theseareloftygoals,butwe’remuchmorelikelytoachievethemifindustrygivesregulatorsandself-regulatorstheinformationandtoolstheyneedtocreatemoreeffectiverulesandguidance.Iscomplyingwithapatchworkofdifferentlawsaroundtheworldthebestapproachorshouldgovernmentstrytoharmonizetheirrules?Wouldyouratherhaverulesandguidancethatleaveroomforinterpretationandflexibility,ordoyouwantspecific,bright-linestandardstofollow?Arethererulesonthebooksnowthatareactingasdisincentivesforyoutodevelopenvironmentallypreferableproducts?Aretherestandardsouttherethatpreventyoufromeffectivelytalkingabouttheenvironmentalattributesofyourproducts?Whataboutstandardsthatareout-of-dateorregulatoryschemesthatfailtoprovideguidanceonthetypesofenvironmentalclaimsthatmarketersaremakingtoday?Areyouhesitatingtomakelong-termcorporateenvironmentalcommitmentsforfearthatyoumaybeheldresponsibleifyoufailtoultimatelyachievethem,notwithstandingthebestofintentions?Rightnow,marketersshouldidentifythebarriersthatarepreventingthemfromachievingtheirenvironmentalmarketingobjectives–aswellastheiroverallenvironmentalgoals--andthentheyshouldworkcloselywithgovernmentsandotherstocomeupwithreal-worldsolutions.Thisisthetimeformarketerstotakeactionandensurethattheirvoicesareheard.It’snotjustthevalueofyourbrandthatisatstake.Withsmarterregulation,wecanbetterprotecttheearthaswell.JeffreyA.Greenbaum:Creatingasmarterregulatoryenvironmentthatprotectsconsumers,allowsbusinessestothrive,andhelpssavetheearthtoo.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability32SustainabilityPerceptionsValueRanking(USDm).Thevalueofsustainabilityperceptionstotheworld’stopbrands1-502023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)1AmazonUnitedStatesRetail$19,9064.402TeslaUnitedStatesLuxuryAutomobiles$17,8175.433AppleUnitedStatesElectronics$14,6504.504GoogleUnitedStatesMedia$14,5774.745MicrosoftUnitedStatesInternet&Software$8,9774.286WeChatChinaMedia$8,4216.277PorscheGermanyLuxuryAutomobiles$8,0974.448TikTok/DouyinChinaMedia$8,0004.559StateGridChinaUtilities$7,3745.6410Mercedes-BenzGermanyAutomobiles$6,4854.7411WalmartUnitedStatesRetail$6,2583.6412FacebookUnitedStatesMedia$6,1653.9113ToyotaJapanAutomobiles$6,1045.0014DisneyUnitedStatesMedia$5,9164.4715VerizonUnitedStatesTelecoms$5,7713.8516CostcoUnitedStatesSupermarkets$5,2103.7617DeutscheTelekomGermanyTelecoms$5,1493.6818InstagramUnitedStatesMedia$5,1254.0419SamsungGroupSouthKoreaTech$5,0464.6320ChinaConstructionBankChinaBanking$5,0244.7121ICBCChinaBanking$4,7704.0322MoutaiChinaSpirits$4,6065.1523Coca-ColaUnitedStatesSoftDrinks$4,5594.3524AramcoSaudiArabiaOil&Gas$4,5395.2325ChinaMobileChinaTelecoms$4,5034.6726BMWGermanyAutomobiles$4,4454.7327AT&TUnitedStatesTelecoms$4,1903.8028HomeDepotUnitedStatesRetail$4,1804.5329AgriculturalBankOfChinaChinaBanking$4,0554.1330BankofChinaChinaBanking$4,0445.0231accentureUnitedStatesITServices$3,9837.7932AllianzGroupGermanyInsurance$3,9154.0133PingAnChinaInsurance$3,7264.1334NTTGroupJapanTelecoms$3,6484.4935TencentChinaMedia$3,6043.5436ShellUnitedKingdomOil&Gas$3,5493.8437VolkswagenGermanyAutomobiles$3,3254.2138MitsubishiGroupJapanAutomobiles$3,2354.2439YouTubeUnitedStatesMedia$3,2014.0340StarbucksUnitedStatesRestaurants$3,0814.3041BankofAmericaUnitedStatesBanking$2,7884.2442UPSUnitedStatesLogistics$2,7234.5743NetflixUnitedStatesMedia$2,6984.1844XfinityUnitedStatesTelecoms$2,6674.1845HyundaiGroupSouthKoreaAutomobiles$2,6234.1446WuliangyeChinaSpirits$2,5814.7447SKGroupSouthKoreaTelecoms$2,5095.0148SinopecChinaOil&Gas$2,4984.7949TataGroupIndiaITServices$2,4707.3050HondaJapanAutomobiles$2,4584.36BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability33SustainabilityPerceptionsValueRanking.Thevalueofsustainabilityperceptionstotheworld’stopbrands51-1002023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)51UberUnitedStatesCarRentalServices$2,3674.3752LidlGermanySupermarkets$2,3584.4753PetroChinaChinaOil&Gas$2,3464.1254Sam'sClubUnitedStatesSupermarkets$2,3334.7355J.P.MorganUnitedStatesBanking$2,2934.2456NikeUnitedStatesApparel$2,2654.6857PepsiUnitedStatesSoftDrinks$2,1913.8158FedExUnitedStatesLogistics$2,1684.4659HuaweiChinaElectronics$2,1564.4560DeloitteUnitedStatesCommercialServices$2,0834.5161IBMUnitedStatesITServices$2,0666.1662AmericanExpressUnitedStatesCommercialServices$2,0614.5263FordUnitedStatesAutomobiles$2,0283.9264ChaseUnitedStatesBanking$2,0113.7765McDonald'sUnitedStatesRestaurants$1,9453.9366TaobaoChinaRetail$1,9434.2167ALDISüdGermanySupermarkets$1,9314.9668OracleUnitedStatesInternet&Software$1,9104.4169LouisVuittonFranceApparel$1,8944.6670TescoUnitedKingdomSupermarkets$1,8764.4471WellsFargoUnitedStatesBanking$1,8693.3372VISAUnitedStatesCommercialServices$1,8664.7173CitiUnitedStatesBanking$1,8443.5574WoolworthsAustraliaSupermarkets$1,7715.4675SpectrumUnitedStatesTelecoms$1,7593.4076ChinaTelecomChinaTelecoms$1,7434.4177FerrariItalyLuxuryAutomobiles$1,7024.6378TmallChinaRetail$1,6674.0279SumitomoGroupJapanTradingHouses$1,6634.5980TargetUnitedStatesRetail$1,6463.9581TotalEnergiesFranceOil&Gas$1,6454.1482CVSUnitedStatesRetail$1,6333.5483ChinaMerchantsBankChinaBanking$1,6283.9084TSMCTaiwanSemiconductors$1,6206.8785LinkedInUnitedStatesMedia$1,6083.8886OrangeFranceTelecoms$1,5943.9087MastercardUnitedStatesCommercialServices$1,5884.78887-ElevenJapanSupermarkets$1,5543.8889AudiGermanyAutomobiles$1,4904.6190PWCUnitedStatesCommercialServices$1,4794.3691VodafoneUnitedKingdomTelecoms$1,4783.9592PublixUnitedStatesSupermarkets$1,4744.1593ReweGermanySupermarkets$1,4704.7294EYUnitedKingdomCommercialServices$1,4674.2695Lowe'sUnitedStatesRetail$1,4663.0796CHANELFranceApparel$1,4624.8897ChinaLifeChinaInsurance$1,4073.9098CarrefourFranceSupermarkets$1,3803.9399TDCanadaBanking$1,3763.97100NestléSwitzerlandFood$1,3534.10BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability34Thevalueofsustainabilityperceptionstotheworld’stopbrands101-150SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)101AsdaUnitedKingdomSupermarkets102GoldmanSachsUnitedStatesBanking103HSBCUnitedKingdomBanking104JD.comChinaRetail105AIAHongKongInsurance106STCSaudiArabiaTelecoms107VankeChinaRealEstate108GucciItalyApparel109AXAFranceInsurance110CapitalOneUnitedStatesBanking111BankofCommunicationsChinaBanking112ChevronUnitedStatesOil&Gas113L'OréalFranceCosmetics&PersonalCare114EDEKAGermanySupermarkets115CPICChinaInsurance116UniversalUnitedStatesMedia117IKEASwedenRetail118AdidasGermanyApparel119EquinorNorwayOil&Gas120Etisalatbye&UaeTelecoms121JRJapanLogistics122PetronasMalaysiaOil&Gas123IntelUnitedStatesSemiconductors124EnelItalyUtilities125WalgreensUnitedStatesRetail126SantanderSpainBanking127NissanJapanAutomobiles128PostalSavingsBankChinaBanking129E.LeclercFranceSupermarkets130BPUnitedKingdomOil&Gas131LGGroupSouthKoreaTech132SAPGermanyInternet&Software133UnitedHealthcareUnitedStatesHealthcareServices134ColesAustraliaSupermarkets135EDFFranceUtilities136CiscoUnitedStatesElectronics137ViettelVietnamTelecoms138NBCUnitedStatesMedia139CircleKCanadaSupermarkets140BYDChinaAutomobiles141MorganStanleyUnitedStatesBanking142GEICOUnitedStatesInsurance143KrogerUnitedStatesSupermarkets144HermèsFranceApparel145SkyUnitedKingdomTelecoms146NetEaseChinaMedia147PayPalUnitedStatesCommercialServices148CanadaLifeCanadaInsurance149InfosysIndiaITServices150DellTechnologiesUnitedStatesElectronicsBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability35Thevalueofsustainabilityperceptionstotheworld’stopbrands151-200SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)151ChubbUnitedStatesInsurance152LICIndiaInsurance153DBSSingaporeBanking154AllstateUnitedStatesInsurance155YiliChinaFood156SalesforceUnitedStatesInternet&Software157CSCECChinaEngineering&Construction158ChristianDiorFranceApparel159MitsuiJapanEngineering&Construction160RBCCanadaBanking161SoftBankJapanTelecoms162PICCChinaInsurance163LexusJapanAutomobiles164DHLGermanyLogistics165auJapanTelecoms166KFCUnitedStatesRestaurants167EngieFranceUtilities168FoxUnitedStatesMedia169LamborghiniItalyLuxuryAutomobiles170BarclaysUnitedKingdomBanking171PolyRealEstateChinaRealEstate172ChevroletUnitedStatesAutomobiles173ScotiabankCanadaBanking174CartierFranceApparel175RedBullAustriaSoftDrinks176CATLChinaElectronics177CountryGardenChinaRealEstate178ExxonMobilUnitedStatesOil&Gas179CapgeminiFranceITServices180ChinaOverseasLand&InvestHongKongRealEstate181MonsterUnitedStatesSoftDrinks182LongforPropertiesChinaRealEstate183eniItalyOil&Gas184VolvoSwedenAutomobiles185S&PGlobalUnitedStatesCommercialServices186KPMGUnitedKingdomCommercialServices187NVIDIAUnitedStatesSemiconductors188SonyJapanElectronics189EnterpriseUnitedStatesCarRentalServices190TruistUnitedStatesBanking191EstéeLauderUnitedStatesCosmetics&PersonalCare192RolexSwitzerlandApparel193HeinekenNetherlandsBeers194Sainsbury'sUnitedKingdomSupermarkets195KiaSouthKoreaAutomobiles196TelstraAustraliaTelecoms197MetlifeUnitedStatesInsurance198MercadonaSpainSupermarkets199ChinaResourcesLandHongKongRealEstate200SwisscomSwitzerlandTelecomsBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability36Thevalueofsustainabilityperceptionstotheworld’stopbrands201-250SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)201WholeFoodsUnitedStatesSupermarkets202NiveaGermanyCosmetics&PersonalCare203PrudentialPlcHongKongInsurance204SFExpressChinaLogistics205MahindraGroupIndiaAutomobiles206CRECChinaEngineering&Construction20720thTelevisionUnitedStatesMedia208ESPNUnitedStatesMedia209SpotifySwedenMedia210Lay'sUnitedStatesFood211GatoradeUnitedStatesSoftDrinks212CBSUnitedStatesMedia213WarnerBrosUnitedStatesMedia214ShanghaiPudongDevelopmentBankChinaBanking215TravelersUnitedStatesInsurance216ConadItalySupermarkets217ChinaCITICBankChinaBanking218SafewayUnitedStatesSupermarkets219ProgressiveUnitedStatesInsurance220BMOCanadaBanking221NescaféSwitzerlandSoftDrinks222CoronaExtraMexicoBeers223PNCUnitedStatesBanking224AirtelIndiaTelecoms225DecathlonFranceRetail226CRCCChinaEngineering&Construction227ZARASpainApparel228LandRoverUnitedKingdomAutomobiles229NONGFUSPRINGChinaSoftDrinks230SubaruJapanAutomobiles231GuerlainFranceCosmetics&PersonalCare232DoveUnitedKingdomCosmetics&PersonalCare233PTTThailandOil&Gas234BNPParibasFranceBanking235KauflandGermanySupermarkets236GeneraliGroupItalyInsurance237BaiduChinaMedia238IndustrialBankChinaBanking239TelusCanadaTelecoms240OptumUnitedStatesHealthcareServices241Alibaba.comChinaRetail242BudweiserUnitedStatesBeers243MUFGJapanBanking244MovistarSpainTelecoms245INGNetherlandsBanking246GilletteUnitedStatesCosmetics&PersonalCare247ChinaEverbrightBankChinaBanking248ActivisionBlizzardUnitedStatesMedia249ItaúBrazilBanking250AnthemUnitedStatesHealthcareServicesBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability37Thevalueofsustainabilityperceptionstotheworld’stopbrands251-300SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)251UBSSwitzerlandBanking252ConocoPhillipsUnitedStatesOil&Gas253BrookfieldCanadaBanking254H&MSwedenApparel255UNIQLOJapanApparel256LuzhouLaojiaoChinaSpirits257RelianceIndiaOil&Gas258GreenlandChinaRealEstate259DanoneFranceFood260LancômeFranceCosmetics&PersonalCare261BentleyUnitedKingdomLuxuryAutomobiles262ElCorteInglésSpainSupermarkets263CommonwealthBankAustraliaBanking264SiemensGroupGermanyEngineering&Construction265MeituanChinaRetail266DollarGeneralUnitedStatesRetail267U.S.BankUnitedStatesBanking268ZurichSwitzerlandInsurance269BudLightUnitedStatesBeers270E.ONGermanyUtilities271SephoraFranceRetail272ElectronicArtsUnitedStatesMedia273JeepUnitedStatesAutomobiles274StandardCharteredUnitedKingdomBanking275HiltonUnitedStatesHotels276CognizantUnitedStatesITServices277SuzukiJapanAutomobiles278BellCanadaTelecoms279AEONJapanSupermarkets280ChinaPostChinaLogistics281AdobeUnitedStatesInternet&Software282CIBCCanadaBanking283RenaultFranceAutomobiles284PampersUnitedStatesHouseholdProducts285MunichReGermanyInsurance286DeltaUnitedStatesAirlines287StateBankofIndiaIndiaBanking288WiproIndiaITServices289NaverSouthKoreaMedia290MaerskDenmarkLogistics291ChunghwaTaiwanTelecoms2923UnitedKingdomTelecoms293MTNSouthAfricaTelecoms294BNSFUnitedStatesLogistics295XinghuacunFenWineChinaSpirits296UnionPacificUnitedStatesLogistics297SpriteUnitedStatesSoftDrinks298CliniqueUnitedStatesCosmetics&PersonalCare299DiscoverUnitedStatesBanking300JioIndiaTelecomsBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability38Thevalueofsustainabilityperceptionstotheworld’stopbrands301-350SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)301TideUnitedStatesHouseholdProducts302PanasonicJapanElectronics303HCLTechIndiaITServices304Stop&ShopUnitedStatesSupermarkets305HennessyFranceSpirits306PosteItalianeItalyInsurance307TysonUnitedStatesFood308ManulifeCanadaInsurance309QNBQatarBanking310QuakerUnitedStatesFood311BBCUnitedKingdomMedia312JapanPostHoldingsJapanLogistics313Tiffany&CoUnitedStatesApparel314ABCUnitedStatesMedia315MideaChinaElectronics316NatWestUnitedKingdomBanking317O2UnitedKingdomTelecoms318SwissReSwitzerlandInsurance319DrPepperUnitedStatesSoftDrinks320MerrillUnitedStatesBanking321BlackrockUnitedStatesBanking322FubonFinancialHoldingsTaiwanInsurance323YangheChinaSpirits324CadillacUnitedStatesAutomobiles325BBVASpainBanking326AIGUnitedStatesInsurance327SiriusXMUnitedStatesMedia328HavalChinaAutomobiles329Al-RajhiBankSaudiArabiaBanking330BTUnitedKingdomTelecoms331AmericanAirlinesUnitedStatesAirlines332HumanaUnitedStatesHealthcareServices333TIMItalyTelecoms334MorrisonsUnitedKingdomSupermarkets335CarMaxUnitedStatesRetail336ChinaMinshengBankChinaBanking337IntesaSanpaoloItalyBanking338Nissay/NipponLifeInsuranceJapanInsurance339KEPCOSouthKoreaUtilities340TJMaxxUnitedStatesRetail341GreeChinaElectronics342TokioMarineJapanInsurance343PanteneUnitedStatesCosmetics&PersonalCare344WasteManagementUnitedStatesUtilities345Prudential(US)UnitedStatesInsurance346MengniuChinaFood347Yahoo!GroupJapanTech348GeelyChinaAutomobiles349GMCUnitedStatesAutomobiles350BoeingUnitedStatesAerospace&DefenceBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability39Thevalueofsustainabilityperceptionstotheworld’stopbrands351-400SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)351BoschGermanyEngineering&Construction352GeneralElectricUnitedStatesEngineering&Construction353Kellogg'sUnitedStatesFood354UnitedAirlinesUnitedStatesAirlines355RabobankNetherlandsBanking356VeoliaFranceUtilities357Dai-IchiLifeJapanInsurance358ClaroMexicoTelecoms359LloydsBankUnitedKingdomBanking360LiptonUnitedKingdomSoftDrinks361SyscoUnitedStatesCommercialServices362HDFCBankIndiaBanking363COOPItalySupermarkets364DiscoveryUnitedStatesMedia365CathayLifeInsuranceTaiwanInsurance366TelenorNorwayTelecoms367PinduoduoChinaRetail368KakaoSouthKoreaMedia369SubwayUnitedStatesRestaurants370HPUnitedStatesElectronics371GarnierFranceCosmetics&PersonalCare372OCBCBankSingaporeBanking373ModeloEspecialMexicoBeers374ChinaUnicomChinaTelecoms375CréditAgricoleFranceBanking376CNOOCChinaOil&Gas377AvivaUnitedKingdomInsurance378RepsolSpainOil&Gas379ADPUnitedStatesCommercialServices380AirbusFranceAerospace&Defence381BroadcomUnitedStatesSemiconductors382HannoverReGermanyInsurance383booking.comUnitedStatesLeisure&Tourism384BlackstoneUnitedStatesBanking385QualcommUnitedStatesSemiconductors386SingtelSingaporeTelecoms387HaitianChinaFood388ThomsonReutersCanadaMedia389COACHUnitedStatesApparel390KirinJapanBeers391PowerChinaChinaEngineering&Construction392HitachiJapanEngineering&Construction393SLBUnitedStatesOil&Gas394UOBSingaporeBanking395CJGroupSouthKoreaFood396MaybellineUnitedStatesCosmetics&PersonalCare3973MUnitedStatesElectronics398Rolls-RoyceUnitedKingdomLuxuryAutomobiles399TeliaSwedenTelecoms400HaierChinaTechBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability40Thevalueofsustainabilityperceptionstotheworld’stopbrands401-450SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)401VattenfallSwedenUtilities402CanonJapanElectronics403CréditMutuelFranceBanking404KTSouthKoreaTelecoms405TimHortonsCanadaRestaurants406NABAustraliaBanking407RossmannGermanyRetail408DishNetworkUnitedStatesMedia409kpnNetherlandsTelecoms410DeutschePostGermanyLogistics411Domino'sPizzaUnitedStatesRestaurants412DUKEENERGYUnitedStatesUtilities413CreditSuisseSwitzerlandBanking414NespressoSwitzerlandSoftDrinks415LSEGUnitedKingdomCommercialServices416HBOUnitedStatesMedia417PinterestUnitedStatesMedia418MSCIUnitedStatesCommercialServices419Johnson&JohnsonUnitedStatesPharma420PetrobrasBrazilOil&Gas421AutoZoneUnitedStatesRetail422PlayStationJapanElectronics423EnBWGermanyUtilities424eBayUnitedStatesRetail425USPSUnitedStatesLogistics426CSXUnitedStatesLogistics427TelkomIndonesiaIndonesiaTelecoms428IberdrolaSpainUtilities429SnapchatUnitedStatesMedia430EmiratesUaeAirlines431BradescoBrazilBanking432ColgateUnitedStatesCosmetics&PersonalCare433GSGroupSouthKoreaFood434BNYMellonUnitedStatesBanking435EsselungaItalySupermarkets436iQiyiChinaMedia437IndianOilIndiaOil&Gas438XboxUnitedStatesElectronics439TheCo-operativeUnitedKingdomSupermarkets440MarshallsUnitedStatesRetail441PradaItalyApparel442McLaneUnitedStatesLogistics443dmGermanyRetail444SnowChinaBeers445BestBuyUnitedStatesRetail446McKinseyUnitedStatesCommercialServices447LululemonCanadaApparel448Head&ShouldersUnitedStatesCosmetics&PersonalCare449KOGASSouthKoreaUtilities450SFRFranceTelecomsBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability41Thevalueofsustainabilityperceptionstotheworld’stopbrands451-500SustainabilityPerceptionsValueRanking.2023RankBrandCountrySector2023SustainabilityPerceptionsValue2023SustainabilityPerceptionsScore(/10)451WrigleyUnitedStatesFood452KBFinancialGroupSouthKoreaBanking453BurberryUnitedKingdomApparel454ValeroUnitedStatesOil&Gas455PKNOrlenPolandOil&Gas456DonQuijoteJapanSupermarkets457TacoBellUnitedStatesRestaurants458DeliveryHeroGermanyLogistics459TractorSupplyUnitedStatesRetail460PECHOINChinaCosmetics&PersonalCare461CitizensUnitedStatesBanking462HikvisionChinaElectronics463KikkomanJapanFood464BancodoBrasilBrazilBanking465CaterpillarUnitedStatesEngineering&Construction466CaixaBankSpainBanking467HuanengPowerInternationalChinaUtilities468NordeaSwedenBanking469FISUnitedStatesInternet&Software470PolarisUnitedStatesAutomobiles471JohnDeereUnitedStatesEngineering&Construction472SNBSaudiArabiaBanking473OxyUnitedStatesOil&Gas474Wendy'sUnitedStatesRestaurants475XiaomiChinaElectronics476YonghuiSuperstoresChinaSupermarkets477TwitterUnitedStatesMedia478SunLifeCanadaInsurance479ErgoGermanyInsurance480BRIIndonesiaBanking481MaseratiItalyLuxuryAutomobiles482FoodLionUnitedStatesSupermarkets483CDWUnitedStatesRetail484PumaGermanyApparel485MaybankMalaysiaBanking486LaPosteFranceLogistics487YamahaJapanAutomobiles488NokiaFinlandElectronics489JDSportsUnitedKingdomRetail490HuggiesUnitedStatesHouseholdProducts491AMDUnitedStatesSemiconductors492Phillips66UnitedStatesOil&Gas493UQCommunicationsJapanTelecoms494AlwaysUnitedStatesHouseholdProducts495YvesSaintLaurentFranceApparel496PizzaHutUnitedStatesRestaurants497CNPAssurancesFranceInsurance498PolestarChinaAutomobiles499LoblawsCanadaSupermarkets500O'RilleyAutoPartsUnitedStatesRetailBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability42EnterpriseValueBrandedBusinessValueBrandContributionDefinitions.[Alphabet][Google][Google][Google]BrandValue+EnterpriseValueThevalueoftheentireenterprise,madeupofmultiplebrandedbusinesses.Whereacompanyhasapurelymono-brandedarchitecture,the‘enterprisevalue’isthesameas‘brandedbusinessvalue’.+BrandedBusinessValueThevalueofasinglebrandedbusinessoperatingunderthesubjectbrand.Abrandshouldbeviewedinthecontextofthebusinessinwhichitoperates.BrandFinancealwaysconductsabrandedbusinessvaluationaspartofanybrandvaluation.Weevaluatethefullbrandvaluechaininordertounderstandthelinksbetweenmarketinginvestment,brand-trackingdata,andstakeholderbehaviour.+BrandContributionTheoverallupliftinshareholdervaluethatthebusinessderivesfromowningthebrandratherthanoperatingagenericbrand.Thebrandvaluescontainedinourleaguetablesarethoseofthepotentiallytransferablebrandassetsonly,making‘brandcontribution’awiderconcept.Anassessmentofoverall‘brandcontribution’toabusinessprovidesadditionalinsightstohelpoptimiseperformance.+BrandValueThevalueofthetrademarkandassociatedmarketingIPwithinthebrandedbusiness.BrandFinancehelpedtocrafttheinternationallyrecognisedstandardonBrandValuation–ISO10668.Itdefinesbrandasamarketing-relatedintangibleassetincluding,butnotlimitedto,names,terms,signs,symbols,logos,anddesigns,intendedtoidentifygoods,servicesorentities,creatingdistinctiveimagesandassociationsinthemindsofstakeholders,therebygeneratingeconomicbenefits.BrandValueBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability43BrandValuationMethodology.1324DefinitionofBrandBrandisdefinedasamarketing-relatedintangibleassetincluding,butnotlimitedto,names,terms,signs,symbols,logos,anddesigns,intendedtoidentifygoods,services,orentities,creatingdistinctiveimagesandassociationsinthemindsofstakeholders,therebygeneratingeconomicbenefits.BrandValueBrandvaluereferstothepresentvalueofearningsspecificallyrelatedtobrandreputation.Organisationsownandcontroltheseearningsbyowningtrademarkrights.Allbrandvaluationmethodologiesareessentiallytryingtoidentifythis,althoughtheapproachandassumptionsdiffer.Asaresultpublishedbrandvaluescanbedifferent.Thesedifferencesaresimilartothewayequityanalystsprovidebusinessvaluationsthataredifferenttooneanother.Theonlywayyoufindoutthe“real”valueisbylookingatwhatpeoplereallypay.Asaresult,BrandFinancealwaysincorporatesareviewofwhatusersofbrandsactuallypayfortheuseofbrandsintheformofbrandroyaltyagreements,whicharefoundinmoreorlesseverysectorintheworld.Thisissometimesknownasthe“RoyaltyRelief”methodologyandisbyfarthemostwidelyusedapproachforbrandvaluationssinceitisgroundedinreality.Itisthebasisforapublicrankingsbutwealwaysaugmentitwitharealunderstandingofpeople’sperceptionsandtheireffectsondemand–fromourdatabaseofmarketresearchonover3000brandsinover30markets.DisclaimerBrandFinancehasproducedthisstudywithanindependentandunbiasedanalysis.ThevaluesderivedandopinionsproducedinthisstudyarebasedonlyonpubliclyavailableinformationandcertainassumptionsthatBrandFinanceusedwheresuchdatawasdeficientorunclear.BrandFinanceacceptsnoresponsibilityandwillnotbeliableintheeventthatthepubliclyavailableinformationrelieduponissubsequentlyfoundtobeinaccurate.Theopinionsandfinancialanalysisexpressedinthereportarenottobeconstruedasprovidinginvestmentorbusinessadvice.BrandFinancedoesnotintendthereporttoberelieduponforanyreasonandexcludesallliabilitytoanybody,governmentororganisation.Wereviewwhatbrandsalreadypayinroyaltyagreements.Thisisaugmentedbyananalysisofhowbrandsimpactprofitabilityinthesectorversusgenericbrands.Thisresultsinarangeofpossibleroyaltiesthatcouldbechargedinthesectorforbrands(forexamplearangeof0%to2%ofrevenue)TheBSIscoreisappliedtotheroyaltyrangetoarriveataroyaltyrate.Forexample,iftheroyaltyrangeinasectoris0-5%andabrandhasaBSIscoreof80outof100,thenanappropriateroyaltyratefortheuseofthisbrandinthegivensectorwillbe4%.WeadjusttheratehigherorlowerforbrandsbyanalysingBrandStrength.Weanalysebrandstrengthbylookingatthreecorepillars:“Inputs”whichareactivitiessupportingthefuturestrengthofthebrand;“Equity”whicharerealcurrentperceptionssourcedfromourmarketresearchandotherdatapartners;“Output”whicharebrand-relatedperformancemeasuressuchasmarketshare.EachbrandisassignedaBrandStrengthIndex(BSI)scoreoutof100,whichfeedsintothebrandvaluecalculation.Basedonthescore,eachbrandisassignedacorrespondingBrandRatinguptoAAA+inaformatsimilartoacreditrating.Wedeterminebrand-specificrevenuesasaproportionofparentcompanyrevenuesattributabletothebrandinquestionandforecastthoserevenuesbyanalysinghistoricrevenues,equityanalystforecasts,andeconomicgrowthrates.Wethenapplytheroyaltyratetotheforecastrevenuestoderivebrandrevenuesandapplytherelevantvaluationassumptionstoarriveatadiscounted,post-taxpresentvaluewhichequalsthebrandvalue.BrandImpactBrandImpact×BrandStrengthBrandStrengthForecastBrandValueCalculationBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability44BrandStrengthAnalyticalrigourandtransparencyareattheheartofourapproachtobrandmeasurementatBrandFinance.Therefore,inordertoadequatelyunderstandthestrengthofbrandsweconductastructured,quantitativereviewofdatathatreflectthe‘BrandValueChain’ofbrand-buildingactivities,leadingtobrandawareness,perceptionsandonwardstobrand-influencedcustomerbehaviour.Tomanagethe‘BrandValueChain’processeffectivelywecreateandusethe“BrandStrengthIndex”(BSI).ThisindexisessentiallyamodifiedBalancedScorecardsplitbetweenthethreecorepillarsofthe‘BrandValueChain’:BrandInputs,BrandEquityandBrandPerformance.BrandStrengthIndexWidelyrecognisedfactorsdeployedbymarketerstocreatebrandloyaltyandmarketshare.Perceptionsofthebrandamongdifferentstakeholdergroups,withcustomersbeingthemostimportant.Quantitativemarketandfinancialmeasuresrepresentingthesuccessofthebrandinachievingpriceandvolumepremium.StakeholderEquityBusinessPerformanceMarketingInvestmentBrandStrength.132Althoughwefollowageneralstructureincorporatingthethreepillars(BrandInputs,BrandEquityandBrandPerformance),theattributesincludedaredifferentdependingonthesector.Abrandstrengthindexforaluxuryapparelbrandwilldifferinstructurefromanindexdesignedforatelecommunicationsbrand.Anindexforluxuryapparelbrandmayemphasizetheexclusiveness,wordofmouthrecommendation,andpricepremium,whereasanindexforatelecommunicationscompanymayemphasiscustomerserviceandARPUasimportantmetrics.Theseattributesareweightedaccordingtotheirperceivedimportanceindrivingthefollowingpillar:BrandInvestmentmeasuresindrivingBrandEquity;BrandEquitymeasuresforBrand-RelatedBusinessPerformancemeasures;andfinallytherelevanceofBrand-RelatedBusinessPerformancemeasuresfordrivingbusinessvalue.AttributeSelectionandWeightingBrand’sabilitytoinfluencepurchasedependsprimarilyonpeople’sperceptions.Therefore,themajorityoftheBrandStrengthIndexisderivedfromBrandFinance’sproprietaryGlobalBrandEquityResearchMonitorresearch,aquantitativestudyofasampleofover100,000peoplefromthegeneralpublicontheirperceptionsofover4,000brandsinover25sectorsand37countries.However,atBrandFinancewealsobelievethatthereareothermeasuresthatcanbeusedtofillgapsthatsurveyresearchmaynotcapture.Theseincludetotalinvestmentlevels–forexampleinmarketing,R&D,innovationexpenditure,thatcanabetterguidetofutureperformancethansurveys.Theyalsoincludeonlinemeasures–suchasratingsbyreviewsitesandsocialmediaengagementthatcangiveamoregranularunderstandingofmarketingeffectiveness.Finallytheyalsoincluderealbehaviour–forexamplenetadditions,customerchurnandmarketshare,toovercomethetendencyforsurveystoincorporateintendedbehaviourratherthanreal.Overaperiodof3to4monthseachyear,wecollectallthisdataacrossallthebrandsinourstudyinordertoaccuratelymeasuretheircomparativestrength.DataCollectionInordertoconvertrawdataintoscoresoutof10thatarecomparablebetweenattributeswithinthescorecard,wethenhavetobenchmarkeachattribute.Wedothisbyreviewingthedistributionoftheunderlyingdataandcreatingafloorandceilingbasedonthatdistribution.EachbrandisassignedaBrandStrengthIndex(BSI)scoreoutof100,whichfeedsintothebrandvaluecalculation.Basedonthescore,eachbrandisassignedacorrespondingratinguptoAAA+inaformatsimilartoacreditrating.Analysingthethreebrandstrengthmeasureshelpsinformmanagersofabrand’spotentialforfuturesuccess.BenchmarkingandFinalScoringBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability45GlobalBrandEquityMonitor.Originalmarketresearchin36countriesandacross29sectorswithover100,000consumersratingover5,000brands.BrandKPIsandDiagnostics1.BrandFunnel2.BrandUsage3.Quality4.Reputation5.Loyalty6.Closeness9.BrandImagery7.Recommendation(NPS)10.AdvertisingAwareness8.WordofMouth11.BrandMomentumAwarenessHaveheardofyourbrandFamiliarityKnowsomethingaboutyourbrandConsiderationWouldconsiderbuying/usingyourbrandApparelAutomobilesLuxuryAutomobilesBanksCosmetics&PersonalCareFoodInsuranceOil&GasRestaurantsRetail&E-CommerceTelecomsUtilitiesAirlinesLuxuryApparelAppliancesBeersLuxuryCosmeticsGeneralRetailHealthcareServicesHotelsHouseholdProductsLogisticsMediaPharmaRealEstateSoftDrinksSpirits&WineTechnologyTyresTier1Tier2OurServices.ABrandValueReportprovidesacompletebreakdownoftheassumptions,datasources,andcalculationsusedtoarriveatyourbrand’svalue.Eachreportincludesexpertrecommendationsforgrowingbrandvaluetodriveperformanceandoffersacost-effectivewaytogainingabetterunderstandingofyourpositionagainstpeers.RequestyourownBrandValueReportBenefitsContentsCompetitorBenchmarkingVisitbrandirectory.com/request-a-valuationoremailenquiries@brandﬁnance.comBrandValuationSummaryBrandStrengthTrackingCostofCapitalAnalysisRoyaltyRatesCustomerResearchFindingsInsightStrategyBenchmarkingEducationCommunicationUnderstandingenquiries@brandfinance.comBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability48BrandFinanceInstituteBrandFinanceInstituteistheeducationaldivisionofBrandFinance,whosepurposeistocreateandfosteraprofessionalenvironmentforknowledge-sharingandnetworkingamongpractitionersandexpertsinthemarket.BFIorganisesevents,in-companytraining,andcorporateeducationalinitiativesaroundtheworld.Inthequestformarketingexcellenceandwiththepurposetoequipthebrandvaluationandstrategypractitionerswiththenecessaryskillsandtools,wehavedevelopedawiderangeofprogrammesandcertificationsincollaborationwiththemostcovetedbusinessschools,universitiesandthoughtleadersinthefield.Brandirectoryistheworld’slargestdatabaseofcurrentandhistoricalbrandvalues,providingeasyaccesstoallBrandFinancerankings,reports,whitepapers,andconsumerresearchpublishedsince2007.+Browsethousandsofpublishedbrandvalues+Trackbrandvalue,strength,andratingacrosspublicationsandovertime+Useinteractivechartstocomparebrandvaluesacrosscountries,sectors,andglobalrankings+Purchaseandinstantlyunlockpremiumdata,completebrandrankings,andresearchVisitbrandirectory.comtofindoutmore.BrandFinanceGroup.BrandDialogueBrandDialogueisapublicrelationsagencydevelopingcommunicationsstrategiestocreatedialoguethatdrivesbrandvalue.BrandDialoguehasover25yearsofexperienceindeliveringcampaignsdrivenbyresearch,measurement,andstrategicthinkingforavarietyofclients,withastrongbackgroundingeographicbranding,includingsupportingnationbrandsandbrandswithageographicalindication(GI).BrandDialoguemanagescommunicationsactivitiesacrossBrandFinanceGroup'scompaniesandnetwork.VI360VI360isabrandidentitymanagementconsultancyworkingforclientsofallsizesonbrandcompliance,brandtransition,andbrandidentitymanagement.VI360providestraightforwardandpracticalbrandmanagementthatresultsintangiblebenefitsforyourbusiness.Brandirectory.comGlobalBrandEquityMonitorOriginalmarketresearchonover5,000brands38countriesand31sectorscoveredMorethan150,000respondentssurveyedannuallyWearenowinour7thconsecutiveyearconductingthestudyVisitbrandirectory.com/consumer-researchoremailenquiries@brandﬁnance.comenquiries@brandfinance.comBrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability50ConsultingServices.BrandValuationMakeyourbrand'sbusinesscaseBrandvaluationsareusedforavarietyofpurposes,includingtax,finance,andmarketing.Beingtheinterpreterbetweenthelanguageofmarketersandfinanceteamstheyprovidestructureforbothtoworktogethertomaximisereturns.MakebrandingdecisionsusingharddataBrandResearchWhatgetsmeasuredBrandevaluationsareessentialforunderstandingthestrengthofyourbrandagainstyourcompetitors.BrandStrengthisakeyindicatoroffuturebrandvaluegrowthwhetheridentifyingthedriversofvalueoravoidingtheareasofweakness,measuringyourbrandistheonlywaytomanageiteffectively.+BrandAudits+PrimaryResearch+SyndicatedStudies+BrandScorecards+BrandDrivers&ConjointAnalysis+SoftPower+BrandImpactAnalysis+Tax&TransferPricing+LitigationSupport+M&ADueDiligence+FairValueExercises+InvestorReporting+BrandPositioning+BrandArchitecture+Franchising&Licensing+BrandTransition+MarketingMixModelling+SponsorshipStrategy+Arewebuildingourbrands’strengtheffectively?+HowdoItrackanddevelopmybrandequity?+Howstrongaremycompetitors’brands?+Arethereanyholesinmyexistingbrandtracker?+Whatdodifferentstakeholdersthinkofmybrand?+Howmuchismybrandworth?+HowmuchshouldIinvestinmarketing?+Howmuchdamagedoesbrandmisusecause?+AmItaxcompliantwiththelatesttransferpricing?+HowdoIunlockvalueinabrandacquisition?+Whichbrandpositioningdocustomersvaluemost?+Whatareourbestbrandextensionopportunitiesinothercategoriesandmarkets?+AmIlicensingmybrandeffectively?+HaveIfullyoptimisedmybrandportfolio?+AmIcarryingdeadweight?+ShouldItransfermybrandimmediately?+IsaMasterbrandstrategytherightchoiceformybusiness?BrandStrategyMakebrandingdecisionswithyoureyeswideopenOnceyouunderstandthevalueofyourbrand,youcanuseitastooltounderstandthebusinessimpactsofstrategicbrandingdecisionsintermsofrealfinancialreturns.BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability51BrandEvaluationServices.Howarebrandsperceivedinmycategory?BrandFinancetracksbrandfameandperceptionsacrossover35marketsin30consumercategories.Clear,insightfulsignalsofbrandperformance,withdataminingoptionsforthosewhowanttodigdeeper–allatanaccessibleprice.WhatifIneedmoredepthorcoverageofamorespecialisedsector?Ourbespokebrandscorecardshelpwithmarketplanningandcanbedesignedtotrackmultiplebrandsovertime,againstcompetitors,betweenmarketsegmentsandagainstbudgets.Our38-countrydatabaseofbrandKPIsenablesustobenchmarkperformanceappropriately.DoIhavetherightbrandarchitectureorstrategyinplace?Researchisconductedinadditiontostrategicanalysistoprovidearobustunderstandingofthecurrentpositioning.Theeffectivenessofalternativearchitecturesistestedthroughdriversanalysis,todeterminewhichoption(s)willstimulatethemostfavourablecustomerbehaviourandfinancialresults.HowcanIimprovereturnonmarketinginvestment?Usingsophisticatedanalytics,wehaveaproventrackrecordofdevelopingcomprehensivebrandscorecardandbrandinvestmentframeworkstoimprovereturnonmarketinginvestment.Whataboutthesocialdimension?Doesmybrandgettalkedabout?Socialinteractionshaveaprovencommercialimpactonbrands.Wemeasureactualbrandconversationandadvocacy,bothreal-worldwordofmouthandonlinebuzzandsentiment,bycombiningtraditionalsurveymeasureswithbest-in-classsociallistening.Withstrategicplanningandcreativethinking,wedevelopcommunicationsplanstocreatedialoguewithstakeholdersthatdrivesbrandvalue.Ourapproachisintegrated,employingtailoredsolutionsforourclientsacrossPRandmarketingactivations,todeliverstrategiccampaigns,helpingustoestablishandsustainstrongclientrelationships.Wealsohaveaspecificfocusongeographicbranding,includingsupportingnationbrandsandbrandswithageographicalindication(GI).BrandDialogueLimitedisamemberoftheBrandFinancePlcGroupResearch,Strategy&MeasurementBrand&CommunicationsStrategyCampaignPlanningMarketResearch&InsightsMediaAnalysisPublicRelations&CommunicationsMediaRelationsPressTrips&EventsStrategicPartnerships&InfluencerOutreachSocialMediaManagementMarketing&EventsPromotionalEventsConferenceManagementNativeAdvertisingRetailMarketingContentCreationBespokePublications,Blogs&NewslettersPressReleasesMarketingCollateralDesignSocialMediaContentStrategicCommunicationsCrisisCommunicationsBrandPositioning&ReputationGeographicBrandingCorporateSocialResponsibility(CSR)BrandFinanceSustainabilityPerceptionsIndex2023brandirectory.com/sustainability53BrandFinanceNetwork.Forfurtherinformationonourservicesandvaluationexperience,pleasecontactyourlocalrepresentative:MarketContactEmailAfricaJeremySampsonj.sampson@brandfinance.comAsiaPacificAlexHaigha.haigh@brandfinance.comAustraliaMarkCrowem.crowe@brandfinance.comBrazilEduardoChavese.chaves@brandfinance.comCanadaAlexandreSt-Amoura.amour@brandfinance.comChinaScottChens.chen@brandfinance.comEastAfricaWalterSeremw.serem@brandfinance.comFranceBertrandChovetb.chovet@brandfinance.comGermany/Austria/SwitzerlandUlf-BrunDrechselu.drechsel@brandfinance.comIndiaAjimonFrancisa.francis@brandfinance.comIndonesiaSutanBanuaras.banuara@brandfinance.comIrelandDeclanAhernd.ahern@brandfinance.comItalyMassimoPizzom.pizzo@brandfinance.comSouthAmericaPilarAlonsoUlloap.alonso@brandfinance.comMexicoLaurenceNewelll.newell@brandfinance.comMiddleEastAndrewCampbella.campbell@brandfinance.comNigeriaTundeOdumerut.odumeru@brandfinance.comPolandKonradJagodzinskik.jagodzinski@brandfinance.comPortugalPilarAlonsoUlloap.alonso@brandfinance.comRomaniaMihaiBogdanm.bogdan@brandfinance.comSpainPilarAlonsoUlloap.alonso@brandfinance.comSriLankaAliakberAlihussaina.hussain@brandfinance.comSwedenAnnaBrolina.brolin@brandfinance.comTurkeyMuhteremIlgünerm.ilguner@brandfinance.comUKAnnieBrowna.brown@brandfinance.comUSALaurenceNewelll.newell@brandfinance.comVietnamLaiTienManhm.lai@brandfinance.comContactus.TheWorld’sLeadingBrandValuationConsultancyT:+44(0)2073899400E:enquiries@brandfinance.comwww.brandfinance.com

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