Gabriela Salinas

Stand Up to Stand Out? How Brands Are Impacting the Debate on Social Justice

Gabriela Salinas
Gabriela Salinas | 26 June 2020
  • The rise of social injustice brand activism poses new challenges for brands – how and what should they be communicating on this topic?  
  • Diversity and inclusion is an increasingly important driver of brand strength.
  • Action to support the black community shows more impact than official statements.
  • Mostly, people are neutral to BLM statements. Why? Probably because words without action feel meaningless to many.
  • A new mandate for global brands: design inclusion and diversity policies; implement them consistently; track their options; communicate them internally and externally in compelling, culturally sensitive and engaging ways; and report the impact.

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?

The importance of Diversity and Inclusion as a driver 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.

Figure 1. Internal brand perception as driver of brand strength
Source: Brand Finance analysis

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.

Figure 2. Evolution of correlations of Employee Score Subcategories 2012-2019
Source: Brand Finance analysis, Gidwani (2013)

How are brands building their perceptions around inclusion and diversity?

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:

  1. Communication-driven initiatives: Many companies have published statements to express solidarity with the black community, including: Twitter, Netflix, Disney, Nike, Adidas, Amazon, Spotify, Microsoft and Accenture. P&G has launched a spot, “The Choice” which implores white Americans to do more against racism. The main criticism to all these “statements” or communication initiatives is that they do little to change the realities of those who are suffering from systemic racism.
  2. Society-oriented initiatives: Airbnb, Adidas, Apple, Amazon, Coca-Cola, Facebook, Nike, Uber, Warby Parker and YouTube announced during this month they will be donating significant amounts to organisations and initiatives fighting inequality and systemic racism, or have committed to award grants to black-owned businesses. These initiatives have been criticized by some experts as “corporate PR, because it transfers the responsibility of solving the problem to outside organisations” (Bensinger, 2020). Therefore, many brands have also focused on the internal organisation. Ben & Jerry’s is mixing, as usual, brand-driven initiatives with social impact. The company names their products and their narratives around specific social or political causes. In 2019, in partnership with Advancement Project, they launched a new flavour called “Justice ReMix’d” that hoped to support grassroots organisations fighting for justice all over the country and ensuring that “everyone enjoys the sweet taste of justice.” Some brands are focusing on a key issue too, education. Adidas announced that it would cover 50 annual university scholarships for outstanding black students over the next five years. Nike seemed to suggest that part of the $40 million it will invest over the next four years to support social justice, will also be funnelled to education initiatives. Tomás Bulat, an Argentinian economist, on said “when you are born poor, studying is the greatest act of rebellion against the system. Knowledge breaks the chains of slavery.” Spot on. Investing in the education of marginalised sectors of society, through scholarships, funding and grants, is one of the main initiatives a global corporation can undertake to achieve social justice in the long run.
  3. Brand management-driven initiatives: Within these, we find two specific clusters, some companies are conducting reviews of their brand identities or brand portfolios to evolve or remove some “brands with racist origins”, as well as some brands that have reviewed their association with social media platforms. In the first cluster, we find brands like PepsiCo, which is now removing the Aunt Jemima brand, originated on a racial stereotype. Mars has decided to evolve its Uncle Ben´s brand for similar reasons. This type of review has reached Latin American countries too, with retailer Alicorp changing the name and image of its iconic brand, “Negrita” (little black in Spanish). The objective, in all these cases, is that the brand identity and portfolio reflect the corporate values and changing consumer expectations around equality, equity and social justice. Looking for consistency in terms of not only identity or portfolio management, some brands are looking for “partners that share corporate views and values on this subject.” Patagonia has recently announced they will pull ads from Facebook and Instagram as part of the Stop Hate for Profit campaign, which asks all businesses to “stand in solidarity with [America´s] most deeply held values of freedom, equality and justice and not advertise on Facebook´s services in July.” The Stop Hate for Profit Campaign is a recently formed coalition that alleges that Facebook is “complicit in spreading disinformation and fomenting fear and hatred.”
  4. Talent management-driven initiatives: Nike CEO John Donahoe explained in an internal memo to employees that “while we strive to help shape a better society, our most important priority is to get our own house in order.” The value of your corporate brand is at risk if your internal brand is weak and lacks credibility. It’s like a pyramid brand: big at the top but sustained by a “lie”. Therefore, as Donahoe mentioned, it is of utmost importance to work on your internal brand as hard as you work on your corporate and product brand. This was also understood by Adidas, that announced a series of talent-related measures, promising to hire black and Latino professionals for 30% of all new positions in the US.

How are stakeholders reacting to these initiatives?

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:

  • The single action that has most impact on favourability is to “set up a fund to support small businesses or retailers impacted by the looting” (with 56% of respondents seeing companies doing this more favourably, 7% less favourably and 36% being indifferent).
  • All communications-related actions have far less impact on the percentage of people that see the company more favourably (official statements supporting protesters, police or both).
  • The percentage of people that state that companies
    around the subject had no impact either way range from 46% to 63%
Figure 3. Thinking about the current protests and demonstrations in dozens of U.S. cities, how would you view companies that did the following?

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.

What are the “champions of diversity and inclusion” doing?

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.

Figure 4. Top three brands that come to mind when specialists think of Inclusion and Diversity

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.

The future of Inclusion and Diversity: what’s ahead?

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.

Sources:

• 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).

About the Author

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).

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