As ESG – Environmental, Social, and Governance – has made its way to the forefront, brands are under pressure to make their positioning known. But what is a brand promise with no action behind it?
Let’s talk Chik-Fil-A , Unilever, and corporate karma.
Join our Zync brand experts as we discuss these questions – and more – in this week’s episode of #EverythingIsBrand. For more on brand, connect with us through zync.ca
Recorded on May 13, 2022.
Brad Breininger: 0:00
Hi everyone, and welcome to this week’s everything is brand. This week we’re asking the question are brands accountable? Alright, so with the rise of a whole bunch of social influences kind of out there in the marketplace like ESG, and sustainability and diversity, is it becoming more and more important for brands to be accountable for these things? Most of them are putting statements on their websites, or they have a point of view on these – in these areas, but are customers and consumers and clients holding them to task and should they be holding them to task? What do you think?
Sasha Codrington: 0:47
I can jump in with an example that is fairly recent and pretty well known of a company that tried to be accountable. It’s a company called Everlane. They’re a fashion company from San Francisco that was founded in 2010. And their whole premise was around being transparent and being accountable. So they committed to being public with their pricing markups, their supplier chains and their ecological footprint. And they grew exponentially, they had a $250 million valuation in five years. And that was something that people were really excited about seeing the transparency, because that’s something that is pretty rare in the fashion space. So they were doing really well until all of a sudden it came out that internally, they were facing discrimination allegations, union busting, all of these things were happening internally and they started pulling back on their transparency pretty soon after. You couldn’t see where they were working, the factory conditions, they stopped releasing anything about the carbon, the chemicals that they were using, the textile waste. And so this combination of building your brand on being accountable, building your brand on being transparent, and then failing to follow through with it was something that absolutely tore them apart. It was a very quick rise and a very quick fall. They were somebody that was trying to get in on this concept of being accountable, trying to win consumers that way. And just watching how quickly that backfired was something that really stuck with me. And I think it’s something that’s not just in the fashion space, I think in – in any space. And it’s something that we’ve spoken about before as well, that podcast that we did on greenwashing, I think it’s kind of something that we can lean into in this conversation is the accountability has to be followed through on. It has to be actionable. It’s not just about the messaging, and it’s not just kind of words on a screen, right?
Gabi Gomes: 2:47
It’s not their purpose, or their marketing purpose to oh, we’re going to be sustainable to get sales, it’s got to be incorporated into the company itself through and
Brad Breininger: 2:57
It’s almost worse if they kind of come out
Marko Zonta: 2:57
I guess the question, then that we have to through. of the gate with a really strong position in these areas, and then completely missed the mark or – whether it was deliberate or by accident. I’m not sure that it was by accident. But I think that consumers and clients and just the general population will hold them to task even more, if what they say and what they do are two different things. ask is, is it actually possible for any company for you know – it doesn’t really matter what industry they’re in, or even services companies – can they really be transparent and truly committed to sustainability? Or diversity or any of that, in its pure form, in the sense that something can potentially go wrong so they’ll have to deal with that? Because they’ll have to answer for mistakes. And sometimes there are small mistakes, sometimes there are their big mistakes. And I think what’s happening right now, and it’s been happening for many years is the fact that there is the marketing story that companies are putting out there about how much they care and what they’re doing. But they never follow through with true reporting, with real numbers, because the real numbers are never anywhere close to what their claims were in marketing. And we know that from a lot of examples from a lot of different companies. They just don’t match up.
Brad Breininger: 4:31
I think that the brands in the organizations have to understand that this isn’t about perfection. This isn’t about being some incredible organization that gets everything right all the time. It’s really it goes back to the question that we’re asking, which is accountability. And if you’re not able to do things, don’t make promises that go beyond what you are able to do. But if you do if sustainability is important to you talk about What you are able to achieve, talk about what you’re doing to improve, talk about any downfalls that you might have as you go along, I think it, it really comes down to authenticity and genuineness and not turning this into promises, and then broken promises. It’s almost like saying, let’s strive to do better. And here’s what the journey is gonna look like. There’s that line where it’s like, don’t let perfection get in the way of progress. And I think that, you know, I think we all have an opportunity to progress here. But we can’t let perfection or the idea of perfection get in the way of that.
Gabi Gomes: 5:38
We’ve talked about this before, in terms of brands being human. Nobody, as humans, we’re not perfect. And as brands, you’re not perfect, either. So it becomes a matter of aligning values. So we’re not perfect, I remember being on some webinar with Maple Leaf foods CEO, where Maple Leaf foods, you know, beef, chicken, meat, et cetera, et cetera, one of the biggest polluters for the environment, and he recognizes his business, you know, is contributing to the environment. So he’s made it a tenant of it to improve that somehow. Now, does that mean folding the company and closing Maple Leaf foods? No. But does it mean making some other strives, it’s investments I believe in… Marko help me out? it’s veggie burgers, plant based products, yes, et cetera, et cetera, right. So it’s about diversifying that portfolio. It’s not about shutting down the farms and the meats, maybe it is about reducing it and looking at it on a more micro level within those firms and what can be done and, and whatnot. But he flat out came out and said that it’s big, it’s big for his employees, it’s big for his himself. It’s big for his company. And he’s making strides to improve that somehow. Now, does that make me feel a little bit better when I go to buy my hotdogs? Probably, you know that they are making steps? And I think that that’s what it comes down to. But in order to do that, you need that authenticity, you need that transparency. And yes, you’re right, Marko, you know, we may get the marketing fluff, whereas what happens behind the scenes is different. I often think that that all comes out. And when it comes out, it’s a PR nightmare. And it backfires.
Marko Zonta: 7:30
I don’t know that I agree with you guys on that, like, yes, once in a while it comes out. But it is so normal now for companies to deliver all kinds of sustainability messages, commitment to diversity messages, social responsibility messages. It’s become vanilla. Exactly. And unless something really major happens, nobody’s gonna even question it, right? Because it’s too – it’s all about messaging, people are too busy to care about things that companies do, again, unless you know, somebody discovers some major issue with it. We see that messaging all the time, and companies are getting away with it. Right? Because it’s, again, to say that, you know, they’re reducing whatever it is, and then they actually reduce it by 2%, instead of what they said that they were going to do. Right? It doesn’t really matter. It’s old news, people moved on.
Gabi Gomes: 8:25
Maybe that’s the case on the environment. Maybe that’s the case on the environment. But then we’ve got the the other two pillars. Right. So the social and the governance.
Brad Breininger: 8:35
Yeah, I also think that we have to look at this from a transitional perspective, like, I think that in a lot of these areas, there’s a transition that has to happen, because ultimately, I think the accountability is going to come from a range of different audiences, whether it’s the general public, whether it’s consumers, clients, or even if it’s employees, or the team members that work for that organization. I think that eventually, the expectation in perhaps new generations, or the expectation in a changing workforce, or the the expectation of a changing society, those things may drive a lot of the things that these organizations do. And to your point, Marko, I think a lot of organizations will use the positioning or the messaging in order to drive their business forward, but then not worry so much about the follow through or the application. But eventually, some of those things will go by the wayside. But there’s always hopefully, karma and maybe there’s maybe there’s corporate karma in addition to individual karma, we can only hope right?
Gabi Gomes: 9:43
I have yet to purchase any chicken from Chick fil A. I don’t know if anybody else has but I refuse to do business with certain – certain brands out there based on their political environment or social views. Like I just won’t support them. Those are choices. And I don’t think I’m alone in that, I think as brands evolve, and people evolve in the, you know, millennial folks, and in Gen Zed especially, they’re going to be buying based on values, and they’re going to be digging a little bit deeper into companies.
Marko Zonta: 10:20
The reality is that the public doesn’t have any power over brands in terms of what those brands do, until they stop paying for that particular thing.
Gabi Gomes: 10:31
Buying – Their money. Follow the money.
Marko Zonta: 10:33
Your dollar is your vote, right? So you either put it toward a company that is socially responsible, or toward a company that is maybe not as committed to that right. So that is your vote.
Gabi Gomes: 10:46
I gotta call out Jeremy, because he’s like shaking his head, looking at me going so skeptical on that one. So,
Jeremy Linskill: 10:53
Yeah, I mean, I am, I’m skeptical on the whole thing. That’s what I’m not really speaking up here. This is a hard one for me. Like you mentioned, Chick fil A, or whoever else you say it, but yet, they’re still thriving. They’re still around. And it’s hard. Like I agree with you. And like, I listened to my daughter, who has the same concern about that same company. And I hear it a lot about actually that company, but I still see them. Like, I see them advertising billboards behind Blue Jay games, or whatever it is, at you know, Yankee Stadium or something like I see their names still out there. And it’s really interesting to me, because we’re in this kind of canceled culture right now, where the millennials and things do have the power. But they’re too busy canceling celebrities, and not so busy canceling brands, or corporations, which I find really interesting, right?
Marko Zonta: 11:47
But you brought up actually a really good example, Jeremy. So that particular company is still advertising, they’re still in public bases and all that stuff. And it’s not just that company, it’s now also the company, it’s actually providing that space for them to advertise
Gabi Gomes: 12:02
I was just about to say as a company, why are they supporting them? Right?
Marko Zonta: 12:05
Why are those companies not saying no, until you clean up your act, we will not allow you to advertise to our members, fans, whatever it is,
Jeremy Linskill: 12:14
ironically, to your point, the dollar speaks exactly right. The corporation has the brand has the money, and everybody else listens
Gabi Gomes: 12:22
I think brands are being looked at more more under the microscope,
Jeremy Linskill: 12:26
I like to think that I’m just yeah, I’m skeptical.
Sasha Codrington: 12:30
I think we can go back to the money as well, like you’re saying the money speaks from a consumer and a brand perspective, I read some things that there are – there’s evidence that there are financial benefits to having strong values at the core of the company. Like it all comes down to those shared values. And if you have some kind of higher purpose to your brand beyond your product, it makes it easier to have those ties with your customers. And I read that Unilever their brands from 2017 to 2018 – Their brands that had a social mission at the core grew 46% faster than the rest of their brands. So I think as much as money is a huge part of this conversation, it does go both ways, like consumers are going to hold back their money from the companies that they don’t believe in. And hopefully companies consider that and who they’re doing business with as well. But the consumers are also taking that money and putting it into the brands that they have those shared values with. So I think there is a huge benefit there. Like I wouldn’t overlook that I know that Jeremy is skeptical and still shaking his head. But I see that among just the people that I’m with day to day, they consider that in their purchases, and they will make the effort and pay a little bit more sometimes to put it towards the company that they believe in.
Brad Breininger: 13:47
And it’s a transitional thing. Like Like we said before, I mean, I think that there are going to be those organizations that burn like a firecracker, and they’re gonna do well, no matter what they do to the environment or what their political stance is, or if they’re into discriminatory practices. And they may burn as a hot flame for a while. But from a long term perspective, from a sustainability perspective, it might not be the best thing for the brand. The other big issue is the whole ecosystem that we’re all a part of, it’s much more difficult to change the entire ecosystem. When you talk about the advertisers or the sports teams that are still allowing that organization, that whole ecosystem is going to take probably even longer to change than the individual corporations or the individual brands. But again, if things are moving in the right direction, and we can see that happening, are we okay with that? Are we okay with the accountability that’s being put on some of these brands? Or do we think it needs to be a lot stronger than it currently is?
Gabi Gomes: 14:53
I’m good with it. We just literally saw a bunch of athletes and celebrities. I believe it included Lewis Hamilton, Venus Williams go in to buy the UK soccer team and buy out the Russian who was a major stakeholder. We are starting to see this. You don’t – you don’t live by certain rules, you will get removed. I mean, let’s think about that. Let’s bring this down to like everyday usage. If you’re going in right now, everybody, I think a lot of businesses have removed plastic straws. If you’re going into an establishment and you end up getting a plastic straw, do you not immediately say, Ooh, like, do you not think? Yes, yeah, I’m sure you’ll you’ll celebrate the plastic straw because it’s not going to like deteriorate in five minutes. However, I gotta say like, that’s kind of like a Oh, you’re blatantly disregarding the environment right now. I don’t know that. That’s sends a brand message that I don’t know that I would want to support.
Marko Zonta: 15:54
But Gabi, you just actually hit like a really perfect example of how meaningless that is
Gabi Gomes: 16:01
oh, I know. Oh, I totally know that
Marko Zonta: 16:02
Brands are using that messaging, as like, Oh, So what are some examples, then? What are some examples of some we’re so committed to environmental cause and all that stuff. When we know all know that it’s a joke. Drop in the bucket. Those straws make zero difference, right? Like, all their products are wrapped in plastic five times. It’s just, it’s just trendy. And exactly, exactly. That’s what I’m saying like brands that can actually commit to real change, and not of that, that kind of change? Because I think that it’s easy just use the trendy headline. Those brands, I think, are really making a difference and can potentially have like a long to look at the Chick Fil A’s or the plastic straws and kind of term impact on whatever it is whether it’s social issues, or environmental issues, or governance issues, they are truly committed to that. And it’s slowly moving in the right direction. All the other brands are just basically writing clever headlines just to keep their business going the way it is. go, Oh, I feel skeptical, like Jeremy. But are there organizations that we can I mean, that we can kind of put in the forefront and say, yeah, these are the ones that are moving a lot slower, but they’re actually doing something that’s going to impact.
Brad Breininger: 17:33
Yeah, that’s a long silence everybody. Sadly. So are we saying that – Are we saying that brands truly aren’t accountable, that it’s just trendy, and that, at the end of the day, people are going to have – do what they want to do?
Gabi Gomes: 17:46
I think we’re in a transition period. And I think with larger corporations, change takes a long time, whether it is you know, putting females in executive positions. We’ve been after this for many, many years, and it doesn’t happen overnight. And I think the same thing with any of the other issues as well. Nothing happens overnight. But I do think that it is small steps and bringing each other along, whether it be your competitors, etc, that will inflict the change. But kudos to those that can flip the switch and completely change their business around on those. But like we said, we can’t think of any
Marko Zonta: 18:24
There is a cost associated with such changes. And if that cost is not planned for and part of their financial plan that’s approved by all the stakeholders like shareholders, you know, leaders within the organization. It’s just not going to happen. Because it’s a major commitment, financial commitment.
Christian Rosenthal | ZYNC: 18:46
I have an example. And I think it’s actually a good one. I read a while back that Lego – Lego bricks. They’re a major toymaker using plastic materials, right. And they’ve committed to change that to plant based bricks. They’re going to start building them from sugarcane or something like that.
Jeremy Linskill: 19:07
No pun intended. Yeah.
Christian Rosenthal | ZYNC: 19:09
So it’s like you said, slow, minor steps to get to that point. Right. And that’s a major investment.
Brad Breininger: 19:21
Yeah, for sure. It is. And not only is it a major investment, the entire brand of that organization is wrapped up in those plastic bricks. Like it’s like it’s really changing the core of who they are in order to better align with where the world is going. And are more organizations willing to do that? That’s the question.
Marko Zonta: 19:42
To kind of pick up on that point. I actually find it fascinating that more organizations don’t actually see it as a major threat to their business. Not changing away from plastic, is, you know, sure you can keep your business going and still be profitable and grow for the next five years, 10 years, 15 years, but I truly believe that there is going to come a point where that will become a major problem for their business. And if they’re not investing in that research and slowly switching away from particular materials now, I really think that are going to be stuck, they will have a serious problem.
Christian Rosenthal | ZYNC: 20:20
I agree with Brad, this is a transitional period, right. So millennials are already grown up, but Gen Z and Alphas now they’re starting to grow up. And it’s important to them the whole sustainability issue, right. So eventually there will come a time where if companies haven’t changed, that will be a major issue for them.
Brad Breininger: 20:44
And one of the most important elements to all of this is, as human beings, we have to look at this in a bit of a different way, there was a great quote, I don’t know who had the quote, but it was more of a storytelling kind of quote, but the idea was, is that when you plant a tree and water it and care for it in its early days, you may never see it as a full grown tree. So you’re actually doing something that you may never reap the benefits of. And I think that for a lot of organizations, they can’t look beyond the immediate or, or the next quarter or the next year. And they don’t know how to plant trees for the future. And I think that if we, if our expectations change that everything is going to be for us right now. I mean, my opinion is that, in a lot of ways, selfishness is at the core of a lot of the issues that we deal with around a lot of these issues. And there’s that other great quote, I don’t want to start to sound like a walking cliche here. But there’s the other quote we don’t inherit the earth from our ancestors, we borrow it from our children. And I think that that is a really strong way to look at it. And and am I just being crazy here to think that that’s even possible? Or are there people starting to think in those terms? Is there an expectation of organizations and people and individuals that expect corporations and brands to deal in this way?
Gabi Gomes: 22:16
I want to see them deal with it. And it’s not because it like you said, it’s not for me, so that they can fix the environment, and I can have cleaner air tomorrow. It actually is for the next generation, it is for a legacy. I’ve got a kid, I want him to have kids in this world, and have cleaner air, etc. I want them to go to the oceans and not see it riddled with plastic netting and garbage, you know, all of that stuff. So yes, I mean, I’m constantly criticized for my recycling efforts, or whatever other environmental issues or even social, etc. views. I’m often criticized of, oh, just let it go. And I’m like, no, no, I don’t let it go. I do what I can, because I’m a firm believer that small steps can make change, but it’s not change for me. And it’s not change for tomorrow. It’s change for the long term.
Brad Breininger: 23:14
Is it possible for corporations to feel that way, for brands to feel that way? Can we take that individual viewpoint and apply it to a to an organization? Is that even possible? What do you guys think?
Sasha Codrington: 23:26
I think it’s a lot more challenging. Like, for me, if I’m making a purchase, I can understand my beliefs and make that decision. But for corporations, there’s always going to be so many decision makers, and to get over that 50% of everybody believes that this is more important than let’s say the short term financial gain. I think that’s where we’re stuck. I don’t think we’re at that kind of majority vote yet, where everybody’s working towards a common goal. I think we’re getting closer and with time, we will get there as especially the younger generations are becoming those decision makers, I think that will push it a little bit into the majority. But I honestly I couldn’t say that I’m seeing that from a corporation perspective. I don’t think it’s the people with that viewpoint that are making the decisions quite yet.
Gabi Gomes: 24:17
Not yet. But guess what, we’re in a war for talent right now. And those millennials, those younger generations, where this is one of their tenants are looking for like minded places to work. So it’s going to infiltrate one way or the other. So either get on the boat and on the bandwagon and make this a priority. Or you’re going to lose talent, you’re going to lose revenue. It’s a lose, lose, lose as time goes on.
Brad Breininger: 24:46
Yeah. And I think that in the end, organization, organizations and brands have to ask themselves, how important is this to our business? How important is this to our team? How important is this to our community and how important is this to the world, like there’s really multiple levels and multiple stakeholders here. And they have to make a determination about whether or not they can exist as an entity and a brand, and still do these things to drive the condition forward. I mean, I think it’s important for people who have children and want something for their future. But even people who don’t have children, it should be for all children, it should be for all humans, we all have a responsibility to make sure that we don’t mess it all up for the people who come to next. And that does get much harder to do as an organization, it does get much harder to do when there’s financial pressure to always succeed quarter after quarter to continuously grow as a whole bunch of things are happening in the world. So we ask the question, are brands accountable? Well, I think that a lot of brands are becoming more and more accountable, but it’s taking time, it’s taking transition, it’s going to take more work on the parts of people and newer generations. But I think in the end, there is a larger and larger group of folks and brands and organizations that want to do better and we can only hope that they will continue to want to do that and they will continue to become more and more accountable. So that’s this edition of everything is brand. Join us next time for a new topic and remember, everything is brand