Beyond Corporate Brand Communication: The (Fine) Line between Real Sustainability and Greenwashing

Referred to by the literature as conscientious brands or brands that do good, an increasing amount of corporate brands are taking on a stronger and more ethical identity. But does this really bring about transformation of and improvement to social issues? Can they quantifiably show improved sustainability resulting from their business activities? Just what is the fine line between greenwashing and something truly authentic??

Hybrid organizational theory, social entrepreneurship, and political organizational theory are helpful in developing a better understanding of corporate conscientious brands (CCBs). These aim to facilitate change towards a sustainable society as they simultaneously tackle the challenges of effectively doing sustainable business, living their brand identity, and avoiding the pitfalls of so-called “greenwashing.” CCBs display four different, albeit interrelated performance aspects:

Communicating: What actions do stakeholders take to transmit their corporate brand identity?

Internalizing: What activities bring the brand identity to life?

Contesting: How do stakeholders challenge the corporate brand identity, or harmonize it with their perceptions?

Elucidating: What stakeholder actions help evolve a common understanding of the corporate brand?

Society continues to face pressure to tackle major issues such as climate change, biodiversity loss, increasingly limited resources, and social inequality. This pressure has only intensified with the Covid-19 pandemic, during which a growing number of corporate brands have gotten to work trying to solve social and environmental problems. Companies that do this have been found to enjoy better levels of customer loyalty, strengthening brand reputation as a result.

We argue that these co-creative corporate branding processes have the power to facilitate positive societal transformation and effective sustainability while achieving the triple bottom line of addressing people, planet, and profit objectives. But how is this best done in a marketing and corporate branding realm that often sees these aspects as drivers of over-consumption, and has many consumers considering them to be the exact opposite of what is social and sustainable? Is it possible that these brands greenwash their way towards more profit, undermining sustainability in the process?

Better Together

CCBs navigate the sometimes paradoxical environment of both earning money and achieving social and ecological value by being co-creative, consisting of an ongoing, evolving discussion among stakeholders. This is well-advised, because if sustainability is at the heart of a corporate brand, and the identity of the organization is not consistent with what it is promised, misperceptions and stakeholder mistrust are almost guaranteed. The last time you hopped in the car to go get some ice cream may have brought this to light:

Ben and Jerry’s: Known for their use of fair trade and organic products along just about all of their value chains, this famous ice cream maker also donates a portion of its profit to supporting those in need. But being owned by Unilever, a large British multinational consumer goods company, might not harmonize with the image being put forth by Ben and Jerry’s.

Volkswagen: Historically known for excellent, emission-reducing engine technology, in 2015 it was revealed that Volkswagen had manipulated the software of eleven million diesel vehicles to achieve low emission test results that in actuality were above the permitted emission levels. Nevertheless, the company’s sustainability report continues to present VW as a sustainability-oriented company, and claims environmental accountability as part of its corporate culture.

For CCBs, doing good for society legitimizes their business in the eyes of their stakeholders. But what about when this process suffers from a loss of credibility? Cynical public reactions and overall impressions often generate negative brand meaning, diminishing the importance of a company’s social and/or sustainable activities. This is bad for everyone, including those companies doing these activities the right way, because when one company loses credibility, this will almost inevitably (and unfortunately) make it more difficult for authentic CCBs to gain visibility and attractiveness. And if overall stakeholder interest declines, CCBs may not be able to maintain their business models at all.

Politically Co-Creative

CCBs have equipped themselves for these challenges by discovering their purpose, working to make clear what they do to emotionally reach their target groups, motivate them to act, and why. Some CCBs take it one step further by launching messages championing their ideologies in the marketplace. One example of this includes Patagonia. Known for its strong environmentalist stance, it has included a special “Vote the Assholes Out” message on the labels of its recent range of shorts. As confirmed by the company on Twitter, this is in line with its positioning. Similar communication has been adopted by other companies such as the company Einhorn or reburbed.

Doing Both

CCBs shape their business models around attempting to improve social or ecological challenges as they combine non-profit and for-profit elements. “Hybridity” describes this idea of combining different business logics; different types of it are possible. For example, hybridity can combine different legal forms, use different organizational logics (such as pursuing profit maximization and public benefit), or join different institutional identities. Often described as social enterprises, hybrid organizations can have both non-profit and for-profit operations. Done successfully, they display an increasing interaction between traditional market-oriented activities and generally beneficial outcomes. One example of this is the textile producer manomama from Augsburg, Germany. Founded in 2011, manomama offers the mentally disabled or long-term unemployed full-time work at a regular wage of at least 10 euros per hour. The company’s textiles are made exclusively of ecologically and regionally produced raw materials.

Look Inside

Internalizing refers to organizing structures in a way that allows the hybrid brand identity of CCBs’ promises to be lived out. This means balancing the tensions and paradoxes of hybrid business operations while managing them. One example of this is seen with the story of entrepreneur Hans-Dietrich Reckhaus, the founder of the insect control products company Reckhaus. About eight years ago, Hans-Dietrich Reckhaus was asked “How much is a fly worth?” Reckhaus’ business had been killing insects for 60 years; he had never thought about their value. In turn, and together with the conceptual artists Frank and Patrik Riklin, he kicked off a campaign that came to symbolize his change in thinking: “Save flies in Deppendorf”. An organizational transformation commenced that continues to this day, with Reckhaus shifting from insect exterminator to the first lobbyist for insects and their habitat.

In this case, it appears that the identity of a (social) entrepreneur and/or their organization plays a significant role in leveraging conflicting thinking and the process of internalizing. An even simpler example of this involves the outdoor equipment retail co-operative REI, who last year 2020 closed all of its US stores on “Black Friday”, asking customers to go outside and enjoy nature instead of consuming more products. The outdoor clothing company Vaude based in Germany engages in a practice.

Their Two Cents – Stakeholders Co-Create

As an additional element, many stakeholders in the brand ecosystem not only enact and co-create the brand identity of CCBs, but push back against processes they might understand differently. Brand management is in this case no longer a completely controlled process of articulating values, but is instead defined as a social, interactive process in which stakeholders develop and convey values that might stand in opposition to the existing guiding principles, enacting their own idea of brand identity at the same time.

Stakeholders also elucidate to develop an evolving, shared understanding of the CCBs. They are often perceived as representatives of certain stakeholder groups or community interests, stand up for them, and can even be part of them. As such, CCBs try to preserve these interests through business activity, hoping to trigger social change towards the shared beliefs between a CCB and its participating communities or stakeholder groups. An attempt is made here by all stakeholders to try to meet societal needs that cannot be sufficiently met by governments or the market.

Keep It Real

CCBs are driven by ethical and moral issues anchored in their corporate brand identity, influence other companies and institutions that operate within their business realm, and are motivated to act by changing norms, property rights, governmental legislation, or societal interests. CCBs furthermore elucidate their co-creational processes, hoping to emerge as proactive members of a transformational, sustainable process as a result. But ultimately, CCBs can be seen as role models only when they act authentically.

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Research Handbook on Brand Co-Creation: Theory, Practice and Ethical Implications, by?Stefan Markovic?(Editor),?Richard Gyrd-Jones?(Editor),?Sylvia von Wallpach?(Editor),?Adam Lindgreen?(Editor), Edward Elgar Publishing?