I don’t usually publish agency or client-related content on Sustainability Conversations, but I found that the video here (and published today) is particularly relevant and insightful.

Some key takeaways from the interview:

• Companies do not have “an appointment for life”

Private-sector diplomacy refers to a different role for business in society: it refers to a kind of diplomatic role in which companies (or other organizations) speak to multiple  stakeholders in (and this is very important) an ongoing manner. It’s not a transaction or a one-off only. Companies are also expected to be much more transparent about how they are doing and what they are doing. It is the same as running for office, in a certain way. Companies don’t have appointment for life.

• An increasing coalescence of brand and corporate reputation

Both are now interlinked.  Consumers are questioning existing brand behavior and asking whether they believe in companies’ overall practices themselves (which comes down to corporate DNA, values and strategic priorities). A coherent story must be told between that which is the umbrella image and the actions of the various operating companies and/or brands.

• Every company is a media company

Companies have the opportunity to become their own media company in a sense—creating their own content, pointing people to it, hosting conversations and, most importantly, be willing to put up the good, the bad, and the ugly – in a transparent and authentic way.

• Act in a democratic and decentralized way

In the world of social media, we have  moved from an authority-driven society (authority of the elites) to an experience-driven society, from peers-to peers. It is critical to give a voice to the people, and let them be part of the solution.

• Be present and consistent

According to the Edelman Trust Barometer, the average person uses eight sources of media each day. That same person needs to hear or see something three-to-five times to believe it. So organizations need to involve audiences consistently across all media, adapting the discussion and style to the specific medium.

According to the survey, consumers in both developed and developing markets ‘buy green’ not only because of  eco-friendly product features but mostly because green credentials relate to corporate reputation and are another proof of companies’ and/or brands’ honesty and trustworthiness (i.e. transparency, accountability).

This shows pretty well that corporate reputation and brand reputation are now inextricably linked. For consumers, it is less about the products and more about the brands. Consumers are questioning existing brand behaviour and asking whether they believe in brands and/or companies’ overall practices (which comes down to corporate DNA, values and strategic priorities).

The advantages of going green are not in increasing sales but rather in reinforcing corporate reptuation, enhancing relationships and/or rebuilding trust with key stakeholders such as employees, etc.

Therefore, I believe the graphic below can be understood as an assessment of the some of the most trusted  corporations as well as the greenest brands in each given market.

And you, what do you think?

Greenwashing, says Adam Werbach, is now on the verge of finally dying off and will be over in few years, for two main reasons:

• Firstly, the death of greenwashing comes with the rise of radical transparency and external community pressure, fueled by the transparency and immediacy of the web: “Transparency is not a choice anymore, either your become transparent or transparency will be done to you,” says Werbach. The GoodGuide (see one of my previous posts here) or one of the several greenwashing indexes (here) are compelling examples that no one can hide or distort information about its products or organization.

• Secondly, greenwashing will disappear because it is simply bad marketing and does not help grow sales. Just because your product will supposedly save the world (because it is green) will not make it popular. Consumers always think: “ok, this product is good for the earth, but what does it do for me?”. There is confusion around eco-labels, and also mounting problems of trust and transparency and consumer fatigue as consumers constantly get exposed to green messages and advertising. For Werbach, only approaches like “this product will help you saving money because it saves energy” or “a product that is easier to use because it has less packaging” can work.

I agree with Werbach’s points, however I also want to highlight that green should not only be seen as a marketing tool. It is also a reputation management tool that help brands and companies get involved on issues that matter to their key stakeholders. A strong value proposition. A higher purpose that people want to engage with, through which they can feel empowered, through which they can make a difference and build a better, greener world. Consumers should not only be seen as ‘wallets’, they are citizens/netizens, they can also be your employees, etc.. . We just need to look at the Obama campaign to understand how leadership and greater purpose helped make a difference.

But then, in order to create trust and enhance reputation / relationships with stakeholders, companies or brands have to go beyond nice green messages, and show their true commitment to green through their corporate values and priorities.

* You can listen to the podcast of this interview via iTunes, or just click here to listen, right-click to download. You can also find part one of TreeHugger’s interview with Adam here, and follow @TreeHugger on Twitter & get their headlines and news with @TH_rss!

:: What is it?

Developed by a “For Benefit” startup and with the contribution of a team of experts (i.e scientists, consumers researchers, technologists from diverse organizations such as the MIT or the University of California), this website rates consumer products based on their health, environmental and social impacts.

More than 70,000 food, household and personal care products and even toys are ranked on the website, from the shower gel you use everyday to the latest toy you were planning to get for your kids at Christmas. At home on your PC or in the stores on your mobile, you can get the information that is most important to you about any kind of product your are planning to buy.

:: Bluring lines between brand reputation and corporate reputation

Very interestingly, I noticed that GoodGuide not only provides product-related information (ingredients, toxicity with carcinogens for instance) but also analyzes data on company’s performance (i.e. climate change policies, labour concerns, etc.).

This demonstrates that brand reputation and corporate reputation are now inextricably linked. How you operate as a company is as important as what you do and what kind of product or service you sell. Product and service quality are still important, but now the definition of what constitutes “quality” also includes social and environmental-related corporate performance.

Therefore GoodGuide is raising issues and challenges not just for marketers, but also has important implications for corporate behavior and corporate communications. I am especially thinking about the risk of greenwashing, for instance if a company is commercializing an eco-friendly product while other products in the same catergory and the company’s operations as a whole are not up to the same standards.

:: Hypertransparency

GoodGuide’s core mission is to provide the world’s largest and most reliable source of information on the health, environmental and social impacts of products and companies. It is another example that brands have lost control. Enabled with the transparency and immediacy of the web, brasnds are dealing with empowered consumers.

And no brand can now ignore this: “Increasingly discerning, well-informed consumer consumers are moving outside the purchasing funnel—changing the way they research and buy your products, resulting from the explosion of product choices and digital channels. Two-thirds of the touch points during the active-evaluation phase of a product or service involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family” (McKinsey Quarterly, The Consumer Decision Journey, June 2009)

:: What to do then? Some general principles to protect corporate reputation and enhance brand equity

• Never presume that you can hide or distort information about your company or products – there will always be someone to find it out and expose your potential misconduct to a greater audience. Same goes for greenwashing or ‘fake’ CSR

• Consumers expect transparency from the companies they buy from, so be transparent and be ready to constantly question your practices.

• Be ready to rethink your marketing & communications model. Now marketing is about directly connecting with your consumers through dialogue, openess, relationships, shared experience & engagement.

You can also follow GoodGuide on Twitter

PS: Goodguide.com is a member of bcorporation.net, a consortium of nearly 200 for-profit companies that, according to its Web site, uses “the power of business to solve social and environmental problems.” The B stands for ‘benefit’, a new kind of hybrid between for-profit and nonprofit that we are seeing more and more of today.

What a very timely talk he has given there as the Twitterized protests were just starting up in Iran. (Actually, he later gave a short interview to the TED team about it, that is now posted on TED’s blog).

Beyond these political implications, I immediately thought about how social media has changed ‘CSR‘, and how it has changed it for the better (even if there is still a long way to go).

With the rise of new social media technologies, power has clearly passed to the people forcing the emergence of a new approach to CSR: CSR 2.0 (or now 4.0).  Especially with citizens-consumers that are now extremely informed and aware, talking to eachother on online communities almost instantaneously about what you do whenever you decide to talk about it or not, and with an audience of millions on the web.

The 2.0 has really put the ’social’ back into CSR, by this I mean the stakeholders. And this is a great thing. Now CSR is finally about stakeholder engagement and about meaningful conversations and change. Because if done otherwise, huge reputational risks are at stake.

Rather than being a big scary thing, CSR 2.0 has to be seen as a great opportunity to join forces with the new empowered stakeholders and rebuild the ’social contract’, especially now that the recession has resulted in a dramatic decline of trust in business worldwide.

A very good paper written by Mikkel H. Sørensen & Nicolai Peitersen from Antics.com lists the 10 changes to the CSR landscape that we are and that we will be seeing because of social media. Here are the eight ones I clearly agree with:

1. Inclusiveness – Involving stakeholders directly from beginning to end

2. Innovation – Winners turn market pressure into stakeholder led innovation

3. Sincerity – Be real

4. Co-ownership – A truly embedded value-based culture happens through involvement

5. Dynamics – Standards being replaced by 24/7 engagement

6. Quality – CSR as immersive business strategy

7. Trust your values – Move first, move alone

8. Proximity – Local impact is global

And to conclude on why Shirky and CSR 2.0, I would highly recommend this book: Here Comes Everybody: The Power of Organizing Without Organizations by Clay Shirky, which makes sense of the way people are using internet, how it creates new group dynamics, and how it puts the people back at the center stage.

It is basic, but so useful to understand why locally-relevant and stakeholder-inclusive CSR strategies are so important today.