Touch Points: Good Things Come To Brands That Give

More from the “Giving is becoming Cool” files. SR

by Kenneth Hein
Brandweek - March 19, 2007

Kenya

, Coca-Cola is helping teach children how to test drinking water for contamination. The company also is providing water-purification systems for some of the country's most poverty-stricken areas.

India

, Starbucks is addressing sanitation-related health problems by donating $1 million to WaterAid. On World Water Day (March 22), Coca-Cola and Starbucks took the opportunity to illustrate the good they are doing for the 1.1 billion people who lack access to clean drinking water.

Such efforts are applauded not only from a humanitarian standpoint, but also from a branding perspective. Sixty percent of U.S. adults over the age of 18 said "knowing a company is mindful of its impact on the environment and society makes me more likely to buy their products and services," according to findings in the Lifestyles of Health & Sustainability (LOHAS) Consumer Trends Database released this week by the Natural Marketing Institute, Harleysville, Pa.

The company surveyed 2,000 adults via the Web to gauge their perceptions of how companies are dealing with social and environmental issues as well as how those perceptions impact their buying decisions.

Fifty-seven percent of consumers said they feel more loyal to companies that are socially responsible and about half (52%) said they were more likely to talk to their friends and families about such mindful corporations.

More than a third (38%) said they'd be willing to pay extra for products produced by socially responsible companies and 35% said they were more likely to buy stock in such corporations.

"Consumers are more likely to be brand loyal and less likely to be price sensitive," said Steve French, managing partner at the Natural Marketing Institute, which was founded in 1990.

Despite that, the study found that many companies who do good, do a bad job of promoting the fact. "There's a big disconnect between what companies are doing and what consumer perceptions are," said French.

The NMI combined its findings with investment analyst rankings, provided by KLD,

Boston

, to create the inaugural LOHAS Index of top 50 companies that are both socially responsible and do a good job communicating it. Of the companies they were familiar with, 50% of consumers surveyed weren't aware of their social or environmental practices. Wal-Mart fared the worst as 62% of respondents were unaware of its recent green initiatives. The mass retailer, which came in at No. 40, has done a poor job touting its green efforts while also battling past workplace diversity and human rights issues, said French.

Microsoft topped the rankings, thanks to the Bill and Melinda Gates Foundation's efforts to enhance healthcare and reduce poverty. No. 4 was McDonald's. Said global CMO Mary Dillon: "We have a long history of social responsibility. It's part of our corporate DNA."

The index divides the top companies into three tiers. At No. 15, Target rounds out the first tier of companies. The second begins with Ford at No. 16 and ends with

Avon

at No 29. Dell, which ranked No. 18, could do better in terms of creating more environmentally friendly products, said French.

General Electric (No. 25), despite its green-tinged "Ecomagination" campaign, is suffering the ills of its environmental legacy—like the "issue they had with PCBs in the

Hudson River

," said French. No. 39 Intel, meanwhile, "has the right elements for a corporate responsibility story; the challenge is to relate it in some sort of meaningful fashion."