The rise of social injustice brand activism in the wake of the social movements and protests sparked by police brutality in the United States, has led to many global brands committing to fight systemic racism. Even when sharing the same objective, these corporate brands have responded and supported the Black Lives Matter movement in very different ways. Some, more focused on statements and spots; others, on internal recruitment and training initiatives related to unconscious bias; and, a third group, on social action addressed at education or through support of black-owned businesses.
But do these initiatives and investments have a significant impact on brand value? Which specific measures related to inclusion and diversity seem to resonate the most with key stakeholders? Which specific initiatives, training related, community related or communication related seem to drive the most significant uplift in terms of brand value?
In order to answer these questions, Brand Finance conducted an analysis of our database of more of 5,000 brands, correlating perceived “Inclusion and Diversity” with our Brand Strength Index (BSI).
We found that the overall employee score (a metric informed by “Compensation & Benefits” scores, “Diversity & Labour Rights” scores and “Training, Health & Safety” scores) shows a correlation of 0.24 with overall BSI. Correlation does not imply causation, but it offers some hints. These two variables are related, and we may interpret this correlation as follows: 24% of the variation in the BSI could be explained by changes in the employee score.
But as we explained, the employee score has three subcategories, and therefore we analysed which one of them has a stronger correlation with BSI. In particular, the perceived diversity and inclusion by the general public shows a correlation of 0.17 with overall BSI globally. If we look at this correlation by geography, the importance of “Diversity” as a driver of brand strength is higher in the US (0.15) when we compare to Europe (0.11). In fact, in the US, during 2019, Diversity was a more relevant driver of brand strength than Compensation or Training aspects. This might be explained by the fact that the treatment of minorities has been at the forefront of public debate more prominently than in Europe over the last couple of years. Figure 1 shows the specific results of our analysis at global, American and European level.
In 2012, The Conference Board (Gidwani, 2013) conducted a multi-year study that compared brand strength and value, as measured by Brand Finance, and sustainability performance, as measured by CSRHub. The analysis revealed a strong connection between sustainability performance and brand value, but also, that the main aspects of sustainability that explained the overall correlation were, in this order: “Training, Health & Safety” with a correlation of 0.18, “Compensation & Benefits” with a correlation of 0.17, and finally, “Diversity and Labour Rights”, with a correlation of 0.15. Figure 2 shows the evolution of those correlations between 2012-2019. All correlations grew, but comparatively, “Compensation and Benefits” is the factor that grew the most in terms of relevance as a driver of brand strength, closely followed by “Diversity and Labour Rights”. It appears that in 2012, 15% of the variation in brand strength could be explained by changes in perceived “Diversity & Labour Rights”. In 2019, 17% of the variation in brand strength could be explained by changes in perceived “Diversity & Labour Rights”. This shows the increasing importance of this attribute in driving overall brand strength.
Brands have responded in a myriad of ways to the Black Lives Matter movement, with actions that are meant to “address the problem from within” or actions that are meant to “influence others”. Within the first group, we find brand management and talent management initiatives. Within the second group, we find communications and broader society driven initiatives which are meant to address the issue in society through influence or action. Let’s look at specific examples:
Morning Consult, a global data intelligence consultancy, conducted a survey between May 31st and June 1st 2020, among 1,990 U.S. adults, to explore reactions towards companies actions in the context of the current protest and demonstrations in US cities. Based on their research output (Cf. Figure 2), we can conclude that:
If we take these 3 findings together, we can conclude that:
Action speaks louder than words. Action to support the community show more impact than official statements. Mostly, people are neutral to BLM statements. Why? Probably, because words without action feel meaningless to many.
In view of these results, Brand Finance wanted to go beyond and use our research capabilities and database to explore the specific reactions of the specialist audience to the Diversity and Inclusion initiatives taken by some of the “champions” in the field.
We selected three brands, one in the B2B space and two in the B2C space, and asked a specialist audience of 50 respondents, what they thought about the initiatives of Nike, Ben & Jerry’s and Accenture around inclusion and diversity. We selected these three companies for the high scores they secure in terms of Diversity in our database, for their reputation of consistent commitment around this subject, and because of their diverse approach to communicating it.
We asked our respondents to mention the top 3 brands that came to their minds when they thought about inclusion and diversity before we exposed them to any names. The results are not surprising: more than half of the sample mentioned Nike (probably due to their famous Kaepernick campaign last year), followed by Dove (probably due to their long running Real Beauty campaign), Google (despite the criticism the technology giant has faced in this regard) and H&M (which following the controversy after releasing an ad with a black child wearing a T-shirt with the inscription “coolest monkey in the jungle”, hired a Head of Inclusion and Diversity who focused on internal training and education around unconscious bias in business decision making).
In Figure 4, you can see a word cloud with the results.
Out of these three champions, the most admired overall was Nike (with an average of 5.63 out of 7, vs. Ben & Jerry’s with 4.12 and Accenture, with 4.00). The admiration for Nike and Ben & Jerry’s was higher in the female segment, denoting probably that their own stakes are at play. Surprisingly, those respondents that categorise themselves as conservative or progressive, showed higher and similar levels of admiration for these brands than those that “sit on the fence”, showing that there might be an audience that is rather neutral to these issues (mostly young women). Ben & Jerry’s do better in terms of admiration among Gen Z (25 or younger) and Gen X (45 and older) versus Millennials, but they trail Nike with all audiences.
Before exposing the sample to selected initiatives by these three brands, we asked them how familiar they were with communications actions launched recently around diversity and inclusion. Levels of familiarity were highest for Nike, followed by Ben & Jerry’s. This could be explained by two factors: Nike’s massive investment in advertising and marketing, and the nature of their communications, mostly based on above the line initiatives vs. Ben & Jerry’s more niche, “grassroots” type of initiatives.
After exposing the respondents to Nike’s “For Once, Don’t Do It”, as well as Ben & Jerry’s “Dismantle white supremacy” and Accenture’s “We Stand Together Against Racism,” we asked them to rate the campaigns in terms of authenticity and consistency.
Again, Nike fared best in terms of perceived authenticity and consistency, especially among those defining themselves as progressive. For everyone who knows the history and values of Ben & Jerry’s - the “honest brand” of Generation X - this came as a surprise. One hypothesis is that the tone and narrative of Nike has been, in the last month, more positive and more focused on what unites us rather than on actions and events contributing to the growing divide. The narrative of Ben & Jerry’s has been riskier, choosing “politically charged” words like “dismantling” and “white supremacy”. This may hint that the “activist role” for brands implies taking a stand, but not using the same tone and tactics often employed in political circles: uniting rather than dividing and fuelling the conflict (even if inadvertently), showing direction by showing action rather than words or symbolic micro-actions, and putting people above their own interest and agenda.
When it comes to judgement on how much all of these initiatives would promote actual change, again, Nike fares best.
All of these findings, indicate a strong correlation between consistent, well supported and executed campaigns around the subject, the creation of familiarity and a halo effect on the rest of the indicators.
But, how does all this translate into actual purchase behaviour? How important are inclusion and diversity when it comes to considering a purchase in these categories? When we compare inclusion and diversity considerations with price and quality, the latter appears a more important factor for most consumers. This is consistent with findings of other reputation studies, which show that product & services are the main driver of reputation. Still, diversity and inclusion, as well as sustainability, have become part of the agenda, and their importance for different stakeholders is increasing.
Diversity and Inclusion is increasingly important for different stakeholders globally, and in turn, as a driver of overall brand strength. The recent social conflicts sparked by the police brutality in the US, have renewed the relevance of this issue. This context, linked to the increasing demand for transparency and reporting, imposes a new mandate for global brands: design clear inclusion and diversity policies, implement them consistently, track their adoption, communicate them internally and externally in compelling, culturally sensitive and engaging ways, and report the impact of all these initiatives. For this, it is key to monitor sentiment. At Brand Finance, we have a global market research database that tracks perceived inclusion and diversity, among other sustainability aspects, paired with brand investment. We use it to help corporations and brands make informed decisions about the impact their inclusion and diversity initiatives have on their own brand strength, the competitive landscape, and key stakeholders.
At Brand Finance we believe that a brand is as strong on the outside as it is on the inside. Internal surveys, focus groups and conversations around these initiatives are also key to understand which one of them has the most impact on employees and students, helping brands deploy the most effective strategies to build a consistent “employer brand.”
We have reviewed throughout the article that some of the communications initiatives have been received with scepticism and criticism. But if they increase the awareness about the importance of the subject, and about our own unconscious bias, it is not wasted resources. Arguably, the most important outcome of this social movement is that multinationals have finally begun to take this subject seriously, incorporating inclusion and diversity into their management philosophy.
Last but not least, this situation and the varying reactions of stakeholders towards brand responses, are showing us that, at this juncture and when it comes to inclusion and diversity: facts are more important than words, the way you take a stand is as important as taking a stand – exemplifying unity and not agitation, and that you really care about people investing in what is important to them (black businesses, black education) rather in what is a purely cosmetic action. Brands whose actions are authentic and unifying will see disproportionate improvement in Brand Strength.
• Bensinger, G. (2020), “Corporate America Says Black Lives Matter. It Needs to Hold Up a Mirror.” New York Times. It can be downloaded from: https://www.nytimes.com/2020/06/15/opinion/ black-lives-matter-corporate-pledges.html
• Gidwani, Bahar (2013), “The Link Between Brand Value and Sustainability.” It can be downloaded from: https://brandfinance. com/images/upload/the_link_between_brand_value_and_ sustainability.pdf
• Morning Consult (2020), It can be consulted here: https://lnkd.in/ eTE2WhG Spain) and "The International Brand Valuation Manual" (2009, Wiley, United Kingdom).
Gabriela is a Global Managing Director of the Brand Finance Institute. She has a broad international experience, having worked for clients such as Bank of America, Repsol, YPF, Telefónica, Terra Networks, Bausch & Lomb, Johnson & Johnson, Roca, GM, Great Eastern Life.
In addition to her everyday work, she lectures on Brand Valuation, Management and Strategy at several business schools in Europe and Latin America. Gabriela has written numerous academic articles and books on brand valuation, among others: “Brand Valuation: a review of approaches, providers and methodologies” (2007, Deusto, Spain), “Brand Valuation: measuring to create value” (2008, Deusto, Spain) and "The International Brand Valuation Manual" (2009, Wiley, United Kingdom).