Various studies and surveys suggest that customers and consumers as well as investors and business partners value a sustainable image. To survive and thrive in today's competitive environment, companies must take action now to ensure their long-term success. This means developing strategies that align with their corporate values and creating a culture where employees embrace change. In this article, you will find out what factors have led to this development, what constitutes a sustainable image and how companies can manage it.

Why is a sustainable image important?

Round 70 percent of consumers value sustainability when making purchases. They prefer companies with a sustainable image and are also prepared to pay higher prices. A sustainable image therefore pays off for companies: On the one hand through stronger customer loyalty, on the other through higher turnover. But what constitutes a sustainable image?

What makes a sustainable image?

In 2011, the Munich-based brand communications agency Serviceplan developed the Sustainability Image Score (SIS), which measures how sustainable brands are perceived by consumers. Only consumers and brand users are surveyed for this purpose. The SIS is calculated from the three dimensions of ecology, economy and social responsibility:

1. Ecology: Responsible use of resources, environmentally friendly technologies, environmentally friendly products
2. Economics: Assessment of whether a company operates fairly and reputably or is susceptible to questionable business practices
3. Social: good working conditions in the company, secure jobs and assumption of social responsibility

The results showed that the sector does not play a decisive role in a sustainable image. Companies in the automotive industry, for example, were also able to position themselves as sustainable. Rather, a sustainable image depends on the corporate culture. It is crucial that the values associated with sustainability are lived and communicated at all levels.

Sustainability is becoming a must for companies

While sustainability has long been a soft topic that allowed companies to distinguish themselves in a niche but was not mandatory, it is now increasingly becoming an obligation to operate sustainably and report on sustainability efforts. One reason for this is legislation, including the CSR Directive. But factors such as

• the reputation of a company
• a company's chances of finding and retaining employees
• Investors' and society's expectations of companies

exert pressure on companies to become more sustainable.

The Handelsblatt cites a study in which 157 CFOs and 153 supervisory board chairmen of Dax, MDax and SDax companies were asked about the consideration of ESG issues in their companies. The result: sustainability is also becoming increasingly important for key performance indicators (KPIs). More than 50 percent of respondents already used ESG KPIs in corporate management. 98 percent said they intended to use them in the future. As a result, sustainability issues are having an impact on behavior management in companies.

Ambitious companies set themselves higher sustainability targets

According to a telephone survey conducted by the University of Trier at the beginning of 2022, companies that want to grow in the coming years are also looking to reduce CO₂-emissions are pioneers. This also applies to the so-called "hidden champions". They tend to set themselves more ambitious targets in terms of CO₂-neutrality. In the long term, they hope that this will reduce costs and improve their image as a company. In addition to legal requirements, the main drivers for reducing emissions are customers' wishes for greater sustainability.

The companies want to achieve the reduction of CO₂-emissions primarily by reducing internal emissions. Offsetting (for example the purchase of CO₂-certificates) and the choice of sustainable suppliers play a subordinate role at best.

Sustainable image must have substance

A sustainable image is becoming increasingly important for companies. Customers and consumers want more sustainable suppliers for their products. Suppliers and investors are also increasingly focusing on this point.

But, and this is crucial: anyone who just wants to polish up their image with sustainability will sooner or later fall flat on their face. Customers notice very quickly when sustainability is just fancy marketing speak. Values that are communicated to the outside world must also be developed and lived authentically. Customers quickly identify greenwashing and the like and punish it with churn and poor ratings. Before sustainability is communicated externally as a value in order to improve the corporate image, a sustainability strategy must therefore be developed and communicated transparently to the outside world.

Source cover image: © lumerb | Adobe Stock