How Environmentalists Help Manage Corporate Reputations

Topics: Environmentalism, Reputation, Human rights Pages: 19 (7196 words) Published: November 17, 2008
Environmentalists Help Manage Corporate Reputations
Sharon Beder
Citation: Sharon Beder, ‘Environmentalists Help Manage Corporate Reputation: Changing Perceptions not Behaviour’, Ecopolitics 1(4), Spring 2002, pp. 60-72. This is a final version submitted for publication.

Minor editorial changes may have subsequently been made.
Sharon Beder's Other Publications
Environmentalists have traditionally drawn attention to environmental problems by highlighting corporate misdeeds and thereby damaged the good reputation of those companies. However, nowadays those very corporations are drawing on environmentalists to help repair their reputations. Nike and BP are two examples of companies that have adopted some environmental reforms as part of their reputation management strategies and received the praise of environmental groups for doing so. Yet both continue with the practices that earned them poor reputations in the first place. Clearly the role of environmentalists in working with such companies is misguided and ineffective in terms of long-term environmental sustainability. Reputation management has therefore become an important part of doing business. But reputation management is often a public relations activity that has little to do with social responsibility. Instead, corporations spend much effort and money on creating the impression of responsibility. They gain credibility for their claims of responsibility through token reforms, codes of conduct and by aligning themselves with amenable environmental and human rights groups as well as specially created coalitions of such groups (Beder 2000, chapter 8). The Increasing Importance of Reputation Management

Reputation is increasingly important to the value of companies. In his book on Image Marketing, Joe Marconi (1996, p. xiv) notes that during the 1990s reputation took on such critical importance for large corporations in terms of their market share that it is now 'of as much concern to their banks as their marketing plans and their business plans'. A survey by Interbrand and Citibank found that 70% of the value of the top 100 British companies was attributed to goodwill in 1998 compared with 40% in 1988. 'Reputation is now so important that the Turnbull Report, which forms part of the UK's corporate governance guidelines, advises companies to treat it in the same way as all other assets' (Brotzen 2000). Similarly the Chief Executive/Hill and Knowlton Corporate Watch survey of 1999 found that 94% of US CEOs in 10 industries agreed that a good reputation is 'very important' to achieving a company's strategic business objectives. CEOs claimed reputation had grown rapidly in importance over the previous 5 years and they expected that growth to continue (Haapaniemi 2000). Individual companies, brands and whole industries have reputations. Whilst corporate image is 'what stakeholders perceive the organization to be', corporate reputation 'is the evaluation or esteem in which the organization's image is held' (Markwick and Fill 1997). Reputation incorporates elements of trust, credibility, responsibility and accountability. But it is essentially about perceptions, just as image is, as most people outside of a company's management do not have full information (Fombrun and Riel 1998; Washington 2000). People's perceptions of a company influence how they buy, sell, invest and who they work for. Share price is an indicator of a company's 'reputational capital' (Fombrun 1996, p. 5). And those companies with the best corporate reputations are the ones that perform the best on regular economic measures such as shareholder return (Brotzen 2000). John Budd (1999) from Selz/Seabolt Communications argues that increasingly 'it is being recognized that financial performance correlates strongly with reputationÉ In this context investors are investing in tangibles (the corporate track...
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