Measuring the Effectiveness of Corporate Sustainability Communications

• Sustainable
• Brand
• Report
• BtoB

Tomohiro Ohashi, Executive Officer

At a webinar we held recently, we asked the attendees, “How do you evaluate your company's communication regarding sustainability?” More than half answered “very well” or “somewhat well”, indicating that many companies are rather doing a good job in communicating their corporate SDGs (Sustainable Development Goals) policies. While, the term “well” can mean a variety of things, including the content, frequency, communication methods, selection of target audiences, effectiveness, etc.

In this article, we will introduce you the effectiveness of the SDGs related initiatives, based on data from Nikkei Research's annual Brand Strategy Survey, Consumer Edition. This year marks the 20th anniversary of the survey, and the latest survey was conducted from June to July 2021.

Awareness of SDGs initiatives of companies

The Nikkei Research Brand Strategy Survey asks respondents about notable companies’ level of commitment to the SDGs. Looking at the ranking by the sum of “proactively doing” and “doing” upon the companies’ SDGs related activities, Toyota Motor Corporation became top at 42.8%. Which can be said as more than 4 in 10 people recognize Toyota’s SDGs activities. The following companies in the top 10 list were, Starbucks Coffee, Honda, Suntory, Nissan, Sony Group, UNIQLO, Panasonic, Hitachi, and Kao, in ranking order. Even Kao, ranked 10th, is known by more than 3 in 10 people, at 30.8%.

Effects of gaining awareness of SDGs initiatives

Looking at the penetration of Toyota — which ranked No.1 in the recognition of SDGs initiatives — there were not large differences in ‘’awareness (of that company),” “understanding,” or “purchase/use experience” between those who were aware of Toyota’s SDGs initiatives (green line in Figure 2) and those who were not (red line in Figure 2). However, there was a 50-point gap in “empathy”. The “empathy” is based on the question, “Do you feel empathy to the company’s attitude, activities, and mindset?”

Figure 2. Differences in brand penetration based on awareness of SDGs initiatives

The top 10 companies by the difference in the empathy score between those who know and those who don’t know about the initiatives, were; Yamaha Motor, Shimadzu Corporation, Kawasaki Heavy Industries, Komatsu, IHI, Kuraray, Menicon, Chugai Pharmaceutical, Fujitsu, and Yanmar. You would notice that there are many BtoB companies listed. Yamaha Motor had the largest gap of 60 points between the people who know and who don’t, showing that making people aware of SDGs activities are highly effective for boosting empathy.

Figure 3. Top 10 Influence of Awareness of Activities on Empathy

Looking at the difference in corporate image depending on whether or not people are aware of the activities, of Toyota, which ranked 1st in awareness, the largest difference was “reliable” with 62.5% of people who were aware of its activities, while only 32.6% of those who were not aware. In other words, there is a difference of nearly 30 points depending on the awareness of the company’s initiative. The difference in “outstanding technology and know-how” is also wide at 22 points, indicating that recognition of a company's SDGs related activities is not limited to enhancing name recognition or trustworthiness, but is also successfully incorporating to such corporate images.

Figure 4. Impact on corporate image by the recognition of activities

To spread recognition and understanding of your SDGs initiatives

We hear some voices from our clients like below.

• Sustainability is becoming a social requirement these days, but we don't know what KPIs we should use to track the progress of our activities.
• We are considering business plans and strategies based solely on internal information, and we are not sure if our plans are aligned with expectations outside the company.
• We do not know how to audit our company objectively or how good/bad we are compared to our competitors.
• We have not been able to grasp changes in the purchasing process or keys of investment decision from the sustainability perspective. So we are not able to prioritize which initiatives we should focus on.

We believe there are three core subjects for making people understand your initiatives.

1. What channels to use for communicating
2. Who to communicate to
3. What kind of content to deliver

Looking at the touchpoints of those who were aware of each company's SDGs initiatives, for example, Toyota Motor Corporation, which was top in their activities’ awareness, had “TV/radio commercials” as its most popular media, at 71.9%. It was followed by “purchase/use of product or service” and “online news articles”, showing that the company utilizes news source as well as TV/radio commercials. Starbucks Coffee Japan, which ranked 2nd in awareness, have connections mostly covered by “purchase/use” and “in-store”, while it also utilizes social media to communicate, with 15.1% for social network services. Suntory have 62.9% by “purchase/use,” 52.7% by “commercials,” and 24.6% by “in-store,” with a balanced distribution in three channels. The media utilization varies depending on the characteristics of the company.

Figure 5. Touchpoints of corporate activities’ recognition

From the result, we can say that both content and target for communication matters. We believe that, to promote awareness and harness understandings of SDGs, we need to approach certain-level high profile leaders within the company who are in the front lines of tackling that issue, rather than general employees. If not, the content of your communication will not be fully understood.
Considering the flow of penetration of corporate SDG initiatives, first, there are subject focused departments, and then there are departments that promote/involve. People in these departments may understand the SDGs, but the awareness and knowledge will significantly lower across ordinary employees and consumers. Therefore, approaching to the leaders in the front lines and making them understand the concept of your initiatives is necessary. Reaching out to those leaders will result in faster market penetration, also.

Figure 6. Flow of penetration in understanding sustainability initiatives

How confident are you in your contents? Are you measuring the effectiveness of your contents?
At one of our webinars, we asked participants, “How do you measure the effectiveness of your company's sustainability communications?” The combined share of “not so well” and “not at all well” was about one-third of the total. While 30% of the participants answered “don't know”. Less than 30% answered as “very well” or “somewhat well”, a clear comparison against the share of successful communication.

Nikkei ID members for approaching to business leaders

Nikkei Research has conducted many surveys on measuring the effectiveness of sustainability activities, and we often get the following concerns from our clients.

• The scores of effectiveness measurement are small, and we do not know if the numbers are reliable.
• We cannot show how sustainability activities relate to business outcomes.

To resolve these issues, properly setting the target of surveys (who to ask), and approaching the right targets is essential. Without the value of corporate activities not understood correctly, the evaluation will not be reasonable, and the company cannot reflect solid feedback to its activities. In addition, by delivering content to the leader level first, we can promote good understandings and have them quickly influence others.

We have the Nikkei ID members, enabling us to approach high-profile professionals who are highly literate and capable of making appropriate evaluations. There are about 10 million members who have registered for the Nikkei Group's services, including the Nikkei Online. Around 60% are managers or above, and half of them work in enterprises (company with more than 1,000 employees).
The term “SDGs” is highly recognized among Nikkei ID members at 80%, compared to just over 40% in general online survey panel. Furthermore, around 40% are aware of “ESG”, and about 70% are aware of “carbon neutral”. In addition, many Nikkei ID members are engaged in or related to sustainability and other business within their company; around 80% have their jobs somewhat related to the SDGs.

To obtain a correct assessment of your company's sustainability-related activities, we strongly recommend approaching the right targets using our Nikkei ID members.