Monday, March 7, 2011

Top brands lack leadership on climate change

A report issued today by EIRIS concludes that more than two-thirds of the world’s top 100 brands are failing on climate change.

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

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

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

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

There are other examples of major gaps between companies in the same sector, such as technology. Dell (Interband rank 42) has linked executive remuneration to climate change performance, established both long and short-term targets and has improved product-related climate change emissions. However, Apple (Interbrand rank 17) has failed to implement any of these measures. On the other hand, Apple has shown an improvement in reducing its GHG emissions whilst Dell's GHG gas emissions have increased.

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

The report is part of a wider annual climate change tracker EIRIS produces, analyzing the top 300 companies and their efforts to tackle climate change.
That report indicates that 33% of companies have a significant climate change impact. Of this 33%, only 27% are adequately managing the climate change risks they face. Sixty percent have now established short-term targets, but only 46% have set long-term targets.

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