As businesses and brands compete ever harder on sustainability, being joined-up and convincing in what they say and do about it has never mattered more. But setting out a consistent story for investors, regulators, staff, consumers, stakeholders or competitors is not easy. Differentiated brand and corporate stories, different market places, and different time frames seem to require such different responses that a simple core story can quickly fragment. As social media lay the inconsistencies bare for all to see, companies can end up leaving the impression they don’t have much conviction about what’s really important.

2. 1
NIGELSALTER
Director,
Salterbaxter
BENTUXWORTH
Head of Sustainability,
Salterbaxter
THEGOLDEN
FORMULABeing authentic sounds like a basic for a modern business or brand,
but it’s surprisingly hard to achieve. As stakeholder expectations
mount, and the business environment becomes ever more complex,
is there a simple formula for getting the action right, and getting
the message across?
THEGOLDEN
FORMULA
I
MEETTHE
AUTHENTICS
4
GOODPHARMA I0
#AUTHENTIC I2
COREVALUES I6
MAKESOME
NOISE
20
PLUGIN,TURN
ON,STANDOUT
24
STYLEWITH
SUBSTANCE
28
INNER
STRENGTH
30
HOWAUTHENTIC
AREYOU?
34
From horsemeat in burgers, to unpaid
corporation tax, to the Bangladesh
factory collapse, 2013 has been the year
in which the gulf widened between the
increasingly ambitious positions
companies are adopting on social
purpose and sustainability, and the all too
prosaicfailingsthatkeeptrippingthemup.
What could ethical fashion mean if
mainstream brands are sourcing goods
from lethal sweatshops? Why should
anyone believe a company is responsible
if it fails to pay a credible amount of tax?
How plausible could claims about
livestock chain of custody be, when the
final goods contain the wrong animal?
In commercial terms, these were not idle
questions: horsemeat fears drove down
Tesco’sprofitsinnineoftheir11global
markets. With the death toll at Rana Plaza
at over 1,000, many of the high street
brands that sourced clothes there are
being drawn into expensive
remedial action. The
discovery that Starbucks
had paid only £8.6 million in
UK corporation tax since
launching in 1998 and none
since 2009, while not being
illegal, didn’t match
customer expectations. Bowing to
consumer pressure, in June 2013
Starbucks acknowledged the need to “do
more to maintain and further build public
trust,” and paid £5 million in tax.
These big events made the news, but also
built the momentum of change already
underway in the relationship between
consumers, companies and brands,
driven by five years of financial crisis,
the impact of social media,
hypertransparency and declining trust.
The consequences for companies and
brands are dramatic – challenging some
long-held beliefs about the disconnection
between the actions of companies and
the value of brands.
As businesses and brands compete ever harder on sustainability,
being joined-up and convincing in what they say and do about it has
never mattered more. But setting out a consistent story for investors,
regulators, staff, consumers, stakeholders or competitors is not easy.
Differentiated brand and corporate stories, different market places,
and different time frames seem to require such different responses
that a simple core story can quickly fragment. As social media lay
the inconsistencies bare for all to see, companies can end up leaving
the impression they don’t have much conviction about what’s
really important.
Can a company really have a singular, authentic approach to
sustainable business? And what happens when it does? Directions 13:
Authentic? takes the temperature of this debate with companies and
commentators at the frontline of the quest for authenticity. We launch
new research on how the top companies perform against a new
definition of authentic, and get fresh insight on the bottom-line impact
of both actions and words. And for those looking for an action plan, we
map the path to authenticity in five steps.
Being authentic may not be easy, and we’re not setting out to point
the finger at inauthenticity because we know that’s just too simplistic.
But we do believe that attempts to be joined-up and authentic are a
feature of the businesses that are getting closer to their customers,
becoming the go-to partners for collaboration and innovation, and
most likely to succeed in the transition to sustainability.
For more on the authenticity challenge
visit: salterbaxter.com
As ever, we welcome your feedback.
Let us know what you think at:
btuxworth@salterbaxter.com
DIRECTIONSI3:
WHYBEING
CONSISTENT
MATTERS DIRECTIONS2013TEAM
NIGELSALTER
Director
BENTUXWORTH
Head of Sustainability
OLIVIASTANDISH
Sustainability Team
RICHARDWILSON
Design Director
PETECUTLER
Senior Designer
JEFFSUTTON
Business Development
Director
ANGELACONFEGGI
Account Manager
GARYMcCALL
Head of Production
LOUISEMOYNA
Production Manager

3. DIRECTIONS 2013 SALTERBAXTER
2 3
To ad-man Julian Borra,
we’re now living in an era
of ‘scratch-card’ brands when
“the average Jane and Joe can now easily
scrape the shiny surface of a brand to
reveal all manner of things beneath –
either the gold of product and service
experiences, rewards, community and a
purposeful and authentic conscience at
work to mutual benefit, or toxic shockers,
rights abuses, dodgy ingredients, shabby
operational impacts, abdication of
responsibility or, worst of all, corporate
indifference to the suffering or injustices
ofothersinvolvedintheirpursuitofprofit”.
The consensus is that consumers,
despite wanting to trust companies and
especially brands, now struggle to do so
in the face of a steady flow of damaging
revelations about corporate behaviour
– and need more reassurance than ever.
Ford, one of the companies performing
strongly in our survey of authenticity
(see page 4), has recognised the game
changing effect: “Increasingly, consumers
are looking beyond the traditional
benefits of a brand. These impulses have
created ‘forensic consumers’ who,
with a few clicks on a computer
or smartphone, investigate
whether a company
shares their values.”
Get it right, and
the commercial
benefits can be
significant.
Clothing brand
Patagonia’s
famous ‘don’t
buy this jacket’
campaign may
have seemedanoble
butuncommercial
gesture – true to the
company’s ethos but not a
credible business approach.
But in fact, Patagonia’s sales
increased almost a third during 2012,
nine months of which featured their buy
less marketing, offering hope that there
is a way to engage consumers on some of
the less palatable issues facing us all,
and still win.
Not surprisingly, lots of people are trying
to pin down the rules of success in this
new world. Indices abound – tracking
either the real sustainability performance
of companies, or the way that different
stakeholders perceive them, or some
combination of the two – identifying the
criteria that might define the deeds and
appearance of winning businesses.
Though they yield wildly different results,
what these surveys drive at in different
ways is the authenticity of the
sustainability work of the companies
concerned – the quality that somehow
brings together both action and its
appearance. Authenticity sounds good,
and everyone wants to be authentic, but
what are the rules? How will you know
when you get there?
‘Authentic’, from Greek ‘authentikós’
meaning ‘original’, is variously associated
with being transparent, consistent,
trustworthy, genuine, real, honest, true,
sincere, and having credibility. We believe
authentic companies are credible in
their actions, transparent in their
communications, open to challenge and
engagement, consistent in what they
say, and have something unique
to offer the world in the social
purpose they pursue:
a definition which
yields the ‘Golden
Formula’ we
explore in different
ways throughout
this report.
In ‘Meet the
Authentics’ on
page 4, we put
our thoughts about
authenticity to the
test in a new survey –
looking at how some of the
world’s leading companies
manage the challenge.
It’s a challenge that comes at companies
in different ways. For pharmaceutical
company Novo Nordisk, the big question
is how to be authentic in claiming to be
looking for a cure for diabetes when the
big commercial opportunity seems to
come from managing it.
Troels Børrild explores
this question with
Novo’s Susanne
Stormer on
page 10.
For
drinks
company
innocent,
authenticity starts
with values – as a filter
on the people they employ,
and a hard-edged measure of
performance, as Tansy Drake
explains on page 16.
SALTERBAXTER’S
GOLDENFORMULA
AUTHENTICITY=
CREDIBILITY+
TRANSPARENCY+
OPENNESS+
CONSISTENCY+
UNIQUENESS
CONSUMERSARELOOKING
BEYONDTHETRADITIONAL
BENEFITSOFABRAND.
THESEIMPULSESHAVE
CREATED‘FORENSIC
CONSUMERS’WHO,WITH
AFEWCLICKSONA
COMPUTERORSMARTPHONE,
INVESTIGATEWHETHER
ACOMPANYSHARES
THEIRVALUES
Authenticityisalsoa
long-termproject,and
forToyotacomesfrom
beingtruetoavision,and
thenlivinguptoitwhenahero
product–thePrius–makesyouthe
world’sgreenestbrand.Weexplorethe
challengesthisbringswithToyotaMotor
Europe’sJean-YvesJaultonpage24.
Meanwhile, the business schools are also
tuning into the authenticity debate, and
we showcase two new takes on the field:
Ashridge’s Kai Peters wonders what
makes authentic leaders, on page 30,
and LBS’s Ioannis Ioannou has some
surprising observations on when to act,
and when to talk about it for best
commercial effect, on page 20.
And for those companies whose forays
into social media make them feel like an
embarrassing dad dancing at a teenage
disco, Gemma Dodd and Matthew
Yeomans have some thoughts about
what it means to be authentically
sustainable online on page 12.
Ultimately, these different perspectives
confirm our view that authenticity
depends on a finely balanced
mix of strategic relevance,
good action and strong
communication.
For any company
wanting to stay
in the front rank
of sustainability
leaders, and gain
the commercial
advantages that
go with it, a focus
on being authentic
seems to be a
simple but
effective strategy.
If you are wondering where
this debate leaves your business,
why not take our authenticity test
on page 34, where we offer five steps to
authenticity based on our golden formula.
And if you’d like to learn more about
building an authentic approach, visit
salterbaxter.com

4. DIRECTIONS 2013 SALTERBAXTER
4 5
So what’s going on? Different
methodologies, for a start. Some test
perceptions, some evaluate performance,
some do both, and all in different ways.
The differences and the volatility that
result are enough to make some
companies question the value of
engaging. But it’s also true that some
companies manage to perform pretty well
across the board in these surveys.
Unilever, for example, continues to be
ranked highly across a number of surveys
for their ‘Sustainable Living Plan’. This
includes a no.3 ranking within the
Globescan/SustainAbility Sustainable
Leaders for the third consecutive year,
and recognition as an industry leader
by Dow Jones in 2012.
Whilst any such recognition is positive,
the truth is that many companies manage
to present a convincing case for their
sustainability credentials to some
audiences, but not others. Whether
companies try to be consistent across
these audiences – and how well they do
– is not something the current slew of lists
and indices test. Some look at certain
stakeholder perceptions of company or
brand sustainability performance (Havas’
Meaningful Brands, and Globescan for
example), and Interbrand use such
perceptions to explore one dimension of
authenticity: ‘the perceived credibility of
the brand’s environmental claims’. But we
believe that authenticity is a more
complex proposition, built out of action
and communication with all of a
company’s stakeholders.
THE AUTHENTICS SURVEY
So just how authentic do ‘sustainability
leaders’ appear through their
communications? That’s the question the
Salterbaxter Authentics Survey set out to
answer. Using five dimensions that make
up our golden formula for authenticity
and we believe apply to every company or
brand: credibility, transparency,
openness, consistency and uniqueness,
we looked at the top 15 performers from
Corporate Knights’ ‘Global 100 Most
Sustainable Corporations in the World’ list
OLIVIASTANDISH
Sustainability Team, Salterbaxter
BENTUXWORTH
Head of Sustainability, Salterbaxter
Lots of lists rank companies for
their sustainability creds, but
which companies manage to tell
a consistent story through all
their channels? The Salterbaxter
Authentics Survey offers some
fresh insights.
The annual crop of sustainability rankings
yields some odd results. Toyota tops the
Interbrand green brand rankings, but is
nowhere to be found on Globescan and
SustainAbility’s Sustainability Leaders’
survey. Floor coverings company
Interface, ever the stakeholders’ darling
and at no.3 on the Globescan list, is
nowhere to be found amongst the
Corporate Knights most sustainable
corporations in the world. And Dow Jones
Supersector Leaders Air France don’t
make it into the top 50 anywhere else.
for 2013, and the top 15 performers
identified by Interbrand’s ‘Best Global
Green Brands’ for 2013.
For these 30 companies and brands, we
carried out a qualitative review of publicly
available information, including company
statements about strategy, their
sustainability/CR report, thought
leadership activity, and social media
presence. We focused on the global
websites and global profiles for each
company, rather than regional sources,
and we deliberately chose sources from
different parts of the business as a
means of checking consistency.
Though our survey was inevitably
subjective, it has thrown up some
surprising gaps on the authenticity
spectrum for some of the world’s
leading corporations.
MEET THE AUTHENTICS
Theeighttopscorers,thosewithascoreof
26ormoreoutofapossible30,included
threeautomotive;onefoodindustry;one
pharmaceutical;onetechnology;one
beautyproducts;andoneenergy
managementcompany.Soitseems
authenticitybythismeasureatleastis
notconfinedtoanyparticularindustry.
As you’d expect, integrating sustainability
into broader strategy and having a clear
purpose are becoming the norm for
companies that take sustainability
seriously, so almost all the companies
we surveyed scored well for ‘credibility’.
But for the other dimensions –
‘transparency’, ‘openness’, and
particularly ‘consistency’ and
‘uniqueness’ – results are much more
variable. Despite having done much
of the work to align their business with
sustainability many companies
struggle to convince across all their
communications. Some fail to engage
with stakeholders – or at least don’t
evidence it within their reporting. Others
can’t find a way of presenting their
approach that’s in any way memorable or
different. Others still have completely
different accounts in different channels,

5. DIRECTIONS 2013 SALTERBAXTER
6 7
THE SALTERBAXTER AUTHENTICITY SURVEY
We identified five dimensions of
authenticity: credibility, transparency,
openness, consistency, and uniqueness,
and two components for each dimension:
The dimensions and components were
weighted equally, and each component
was allocated a score from 1-3 (1 – vague
information/no alignment; 2 – some
detail included and some alignment;
and 3 – significant information/
complete alignment.)
To generate scores we reviewed publicly
available information for each company:
• Company statements about strategy
• Sustainability web pages
• The sustainability/CR report
• Thought leadership
• Social media presence
We looked only at activity that could
be found via global company web
pages, reports and social media as
a starting point.
Manycompanieshaveseparatesocial
mediaaccountsforsustainability.Where
linksortagsdirectedustotheappropriate
accounts,ortheaccountwasnamedafter
thesustainabilitystrategy,weincluded
themwithinresearch.Ifaccountswere
notobviouslylinkedtothebrand,these
werenotincluded.
making it difficult to determine where the
commitment really lies.
This kind of authenticity clearly isn’t easy.
We’ve taken a closer look at results for
three sectors and consider what the
scores mean for some of the companies
featured, and what kind of changes would
make a positive difference.
Automotive
Withhighlyvisibleeco-productsin
themarketplace,andambitious
commitmentsaroundeco-efficient
production,it’sperhapsnotsurprising
thatautomotivecompaniesoften
performwellingreenbrandassessments.
Butreviewingthesesamecompanies
withourapproachtoauthenticity
producedsomeinterestingresults.
Though Honda, Toyota, Ford and BMW
may have unique stories to tell about
their sustainability ambitions, we
struggled to find it on their global
websites and in their reports. They all
want to develop mobility opportunities,
add value to society or become
‘society’s choice’ – but we found little to
choose between their claims on these
channels. So for defined ambition, they
lost points in our analysis’.
Turning to thought leadership activity,
Ford, Volkswagen and BMW are all
working hard to differentiate themselves.
For ‘beyond reporting’ they were all
awarded full marks. BMW’s ‘Activate the
Future’, Volkswagen’s ‘Think Blue’ and
Ford’s ‘Greentopia’ campaigns have
an environmental focus, consistent
with their sustainability ambitions.
But Ford lead another campaign
focused on ‘Trust’ which stands out
for giving a different, broader platform
for engagement.
There’s also a sense that ‘more is more’
amongst the automotives: all producing
huge amounts of detail about their
sustainability work, making it harder to
determine what they think is important
– and affecting the ‘transparency’ and
‘openness’ scores in our research.
Honda for example present their actions
in a huge amount of detail in their five
reports, but don’t say much about
targets and their performance, or about
how they’ve engaged stakeholders, or
their approach to leadership, all of which
reduced their scores for transparency
and openness in our survey. Toyota,
Honda, Nissan and Volkswagen also
missed marks for ‘aligned strategy’
because we felt their messages got lost
within extensive discussion.
BMW gave more detail on targets, and
their presentation of ‘open leadership’
seems to us an example of best practice
online. Each pillar to their sustainability
strategy touts a relevant employee
video statement, drilling into how
sustainability is being practised at a
different level of the company and
building the sense that employees have
a voice and a clear sense of their role in
the delivery of sustainability action.
Ford
Ford came 2nd in Interbrand’s 2013
ranking and top in our authenticity
survey, with full marks for all but one
of our criteria. They made a clear case
for their open leadership, stakeholder
engagement, credible targets and
detailed plan of action seen throughout
publications. Sustainability is well
integrated into Ford’s broader strategy
which itself responds clearly to the
external risks and trends associated with
the industry.
But what makes Ford stand out are
their thought leadership campaigns
and use of social media. For example
the recent #FordTrust/ ‘Trust is the
New Black’ and #FordGreen/ ‘Greentopia’
campaigns consisted of thought-
provoking panel discussion and talks
focusing on the changing business
environment and consumer expectations.
Ford used the campaigns to demonstrate
their interest in wider issues affecting
global business and society, and
remind consumers of their values in
the process, with their Twitter feeds
supporting further debate online,
taking their approach well ‘beyond
reporting’ in our survey.
Ford 28 6 6 6 6 4 2
Nestlé 27 5 5 6 6 5 14
Schneider Electric SA 26 6 5 4 5 6 13
Natura Cosmeticos SA 26 6 6 4 6 4 2
HP 26 6 5 6 5 4 12
Novo Nordisk A/S 26 6 4 4 6 6 5
Volkswagen 26 6 5 5 4 6 7
Nissan 26 5 6 5 5 5 5
Dell 25 6 5 4 5 5 10
BMW 25 5 4 6 5 5 13
Panasonic 24 6 4 3 5 6 4
Johnson & Johnson 24 5 5 4 5 5 6
adidas 24 6 6 4 4 4 15
Konijke Phillips Electronics NV 24 6 5 4 4 5 7
Nokia 23 6 4 4 4 5 9
Neste Oil OYJ 23 6 4 5 4 4 4
Sony 23 6 5 2 5 5 11
Umicore SA 22 6 5 4 3 4 1
Danone 22 5 3 3 6 5 8
Toyota 21 5 4 6 3 3 1
Intel Corp 21 5 4 4 5 3 14
Westpac Banking Corp 20 6 4 5 3 2 10
Outotec OYJ 20 6 5 4 3 2 12
Biogen IDEC 19 6 3 3 4 3 8
Statoil ASA 19 6 2 3 5 3 3
ASML Holding NV 18 6 4 5 2 1 11
Sims Metal Management Ltd 17 6 2 2 4 3 15
Storebrand ASA 15 4 4 2 3 2 6
Dassault Systemes SA 14 3 2 4 2 3 9
Honda 12 2 4 2 2 2 2
Brand/Company
Credibility
Consistency
AuthenticityScore
Openness
Transparency
Uniqueness
CorporateKnights/
InterbrandRanking
Being
Authentic
Index
Aligned
strategy
Clear purpose
Honest
conversation
Aligned
statements
Open
leadership
Engagement
Credible
targets
Tangible
action
Defined
ambition
Beyond
reporting
Credibility
Consistency
Openness
Transparency
Uniqueness
Corporate Knights Global 100 Most Sustainable Corporations in the World 2013
Interbrand Best Global Green Brands 2013
MANYCOMPANIESMANAGE
TOPRESENTACONVINCING
CASEFORTHEIR
SUSTAINABILITY
CREDENTIALSTOSOME
AUDIENCES,BUTNOTOTHERS

6. DIRECTIONS 2013 SALTERBAXTER
8 9
Technology
Both Interbrand and Corporate Knights
have identified technology companies
positively for their development of
sustainable manufacture and design, and
generally they do well in both lists. We
also found several technology companies
doing well, but for different reasons.
One is their competence and visibility
online. One impressive example is Intel’s
sustainability Twitter account,
@intelinvolved, which boasts a following
of 275,000 (and growing) and which
they’ve used to raise the profile and
engage on issues from forced marriage to
water scarcity. Though Intel seem to have
the edge, all the other technology
companies in our survey are
strengthening their social media
presence, reminding people of their
company values and promoting their
achievements, but also showing they are
more open to engagement.
All of the technology brands also appear
to have understood the importance of
tangible and visible action, with five out of
the nine companies scoring five out of six
for transparency. They’re also good at
defining their ambition and
communicating it beyond their reports,
with most doing well in our ‘beyond
reporting’ category. Panasonic, Intel and
Sony all present their vision for the future
as part of their thought leadership. Sony’s
social media presence showcases their
‘FutureScapes’ project, exploring how
technology could be part of sustainable
living in the future, and helping to position
them as an ambitious player in the
changes ahead, but Sony’s global website
doesn’t provide a link to the venture,
which seems a missed opportunity.
The technology companies surveyed tell a
good story about contributing to social
good by harnessing their innovation
capacity. For example Nokia have
donated technology to field workers in the
Amazon so they can track Dengue Fever
breeding hot spots and curb numbers
affected by the disease. In doing so they
are capitalising on their strengths,
leveraging what the business does well to
do good, and making their efforts more
authentic in the process.
Panasonic
Panasonic are differentiating themselves
from their competitors through thought
leadership. Panasonic’s development of
‘Smart Towns’ showcase their innovative
safety and environmentally friendly
technologies: from LED street lights, to
invisible security, to solar systems for
homes. The buzz around Panasonic’s
plans for Fujisawa Smart Town, and plans
for public housing with the government of
Singapore, has helped them connect with
stakeholders and make their Smart Town
agenda seem action-oriented and
different. As a result they perform well
though they have yet to do much to
integrate sustainability into their online
profile and social media presence.
But Panasonic’s report doesn’t say much
about their targets, how they approach
leadership and stakeholder
engagement, and the voices of either
staff and external are largely absent.
We felt Panasonic could do more to
demonstrate their sustainability
commitment by simply adapting the
content of reporting, and increase
coverage of sustainability reporting,
achievements and debate, via
social media.
ExtractiveandMaterials
Corporate Knights awarded many of its
top positions to corporations from the
extractive and materials industries. By
their criteria, these corporations have
clear, purpose-driven sustainability
strategies. They clearly understood
the benefits of using their corporate
websites to show how sustainability is
integrated in the business, giving an
immediate sense that sustainability
is a part of their broader strategy, and
helping them score well for credibility
in our research.
But from there the scores decline. On
‘transparency’, Sims Metal Management
lost marks as their website and integrated
report list achievements for water use,
waste generation and energy and carbon,
but give no future targets or reflect on
previous successes and failures. Statoil’s
website and reporting is inconsistent in
the way it deals with progress on
environmental and other targets, giving
the impression of wavering commitment.
Four of the six extractive companies had
weaker scores for ‘openness’, failing to
offer much evidence of open leadership
and stakeholder engagement. Even
Schneider Electric, third overall in our list,
lost marks for stakeholder engagement,
consistently stating its importance, but
offering little supportive detail.
Lower scores for consistency in the sector
were mainly a result of underdeveloped
social media presence. Umicore and
Neste Oil have tweeted some
sustainability updates but, with limited
followings (both around 900), the
companies aren’t reaching a significant
audience. Other companies in the sector
have done little, perhaps feeling there is
less pressure to be present than for
consumer brands. We believe the growing
scrutiny of all corporations in social media
– driven in part by their performance in
league tables such as Interbrand and
Corporate Knights – will make this
omission increasingly risky.
Sims Metal Management
It ought to be easy to talk a good
sustainability story if your main business
is recycling. So Sims Metal Management’s
score of 17 is surprising. We found that
Sims provided little for stakeholders to
get hold of: within the sustainability web
pages and the integrated annual report,
there’s not much on targets, stakeholder
engagement or leadership approach.
Social media presence is negligible:
sustainability tweets aren’t regular and
the small following limits the reach of
Sims’ sustainability message.
Finding a way to define and articulate
their strategy and become more
transparent and open about their
progress could be good starting points for
Sims to engage more people and manage
stakeholder risk in the coming years.
THECOMPANIESDOINGWELL
INOURSURVEYSEEMTO
HAVEFOUNDAWAYTOBE
CONSISTENTINTHEIR
ACTIONSANDHOWTHEY
COMMUNICATETHEM–TOA
WIDERANGEOFAUDIENCES
GETTING TO AUTHENTIC
This qualitative assessment of some of
‘sustainability leaders’ picked out by
Interbrand and Corporate Knights has
identified some of the reasons why
their sustainability commitments
and achievements are not coming
across consistently.
Those scoring well in our survey get the
basics right, but they also understand the
added value of ‘uniqueness’ and are
making the most of digital media. The
best performers are evidencing relevant
thought leadership, and building a vibrant
social media presence – though we also
found that in general social media is still
an underdeveloped means for brands and
companies to engage their stakeholders.
Though high positions in sustainability
leadership rankings are no bad thing, the
value of being authentic is not about
moving up the league table. The
companies doing well in our survey seem
to have found a way to be consistent in
their actions and how they communicate
them to a wide range of audiences.
What benefit do they get from
authenticity? As the boundaries between
different stakeholder groups, and
between brands and the companies
behind them are eroded by digital and
social media, one advantage is that it’s
simpler to have one approach and one
story – that’s as true and relevant for
investors as it is for consumers. It may
sound obvious, but it’s a demanding path
and one that few companies yet follow.
Those that do, look well positioned to reap
the benefits that looking – and being –
authentic can bring.
How authentic is your business? Take our
test on page 34.
IT’SSIMPLERTOHAVEONE
APPROACHANDONESTORY
–THAT’SASTRUEAND
RELEVANTFORINVESTORSAS
ITISFORCONSUMERS

7. DIRECTIONS 2013 SALTERBAXTER
10 11
TROELSBØRRILD
Head of Nordic Office, Salterbaxter
SUSANNESTORMER
Vice President, Corporate Sustainability, Novo Nordisk
GOOD
PHARMANovo Nordisk has been amongst the sustainability stakeholders’
favourite companies for 20 years or more, with countless accolades
including Corporate Knights’ ‘the world’s most sustainable
corporation’ in 2012. No small achievement when it’s part
of an industry regularly rocked by scandal and allegations
of corrupt practice. So how does Novo Nordisk stay true
to its mission of ultimately ‘defeating diabetes’ in the midst
of a lucrative global diabetes epidemic and eroding trust
in Big Pharma? Troels Børrild talks to
Novo Nordisk’s Susanne Stormer,
Vice President,
Corporate Sustainability.
TB: Novo Nordisk’s mission is nothing
short of ‘changing’ and ultimately
‘defeating’ diabetes. What do you
mean by this brand promise?
SS:Forourpart,thereisnodoubt:we’re
genuinelycommittedto‘Changing
Diabetes’asagloballeaderindiabetes
care,butit’simportanttounderstandthat
there’salong-andshort-termperspective
tothis.Forthelongtermwe’reworkingon
acurefordiabetes–probablytheonly
pharmacompanyintheworldthat’sdoing
so–andfortheshortterm‘Changing
Diabetes’meansmakinglifewithdiabetes
manageableforthosepeoplewhoget
diagnosedandmustlivewiththis
conditionfortherestoftheirlives.Italso
meansprovidingbetteraccesstocarefor
thosewhoneeditandcurrentlydon’thave
it,anditmeansadvocatingforhealthier
lifestylestopreventdiabetes.
TB: How do you prove to the world that
your commitment is authentic?
SS:Ourmissionisevidentasadeep-felt
commitmentandfrequentdiscussion
topicinourglobalorganisation.Givenour
globalpresence,howthatmission
translatesintoabrandpromisetakes
differentformsindifferentmarketplaces,
buttheessenceiswhatinspiresand
motivatesuseverywherewework.It’sthe
startingpointforeverythingwedo,butour
missionalsohelpsustotakea
long-termapproachtovaluecreation.
Ifweweretosimplymaximiseshort-term
profits,weprobablywouldn’tinvestas
muchinresearchanddevelopmentaswe
do,butratherfocusonsellingasmany
unitsofwhatwe’vealreadygotinstore.Our
missionandourbrandpromisechallenges
ustoalwaysaimhigherthanthat.
When we ask our customers what the
best thing we could do for them would be,
their first priority is a cure for diabetes, so
it can’t affect their families. But they also
ask us to make it easier for them to live
with diabetes, which is why we’re always
looking for ways to make treatment more
convenient, such as aiming to develop
insulin medicine in tablet form. We know
injections are a key factor deterring
patients from getting started on effective
diabetes treatment, so it would have a
massive impact if we manage to
successfully develop a tablet treatment.
When we first set out on that research
investment we expected that it could take
decades to develop, which would scare off
some companies, but for Novo Nordisk
this is part of our brand promise. It’s also
an integral part of our strategy to remain a
global leader. So it’s not just about doing
good, but about staying in business for
the long term. And the interesting part
about that kind of blue-skies research is
that it doesn’t just follow a linear and
predictable trajectory; with our latest
advances we may be able to develop the
treatment in just 20-25 years. That would
be a real game changer.
TB: Some stakeholders claim that you
and your peers are not doing enough to
ensure access to medicines for people in
low-income groups and countries. How do
you address this concern?
SS: Access to medicines is the key
question that we and the industry are
faced with. Often the debate is about
affordable pricing, but it also has to do
with market strategy for entry to, and
expansion in, low-income countries.
On the issue of pricing, medical treatment
for diabetes is in fact not expensive – on
the contrary, it is much more costly to not
treat it. We completely understand
stakeholder concerns and appreciate that
it can be difficult to accept at first glance
that we have a gross margin at around
80 per cent. But our sales prices need to
reflect the huge R&D investments made
in getting the treatments developed and
ready for the market. This investment
needs to be recovered at a later stage if
we are to remain in business and help
patients not just in the short term.
On the second issue, we’ve for years
followed a strategy to expand access to
effective treatments that can address
unmet medical needs, also for people in
low-income countries. It’s one of the
reasons why we maintain a preferential
pricing policy and have a portfolio of
products. However, we wanted to take up
the challenge and set ourselves an
ambitious target to show our commitment
to patients and other stakeholders to this
important issue. So, last year we
announced our target to reach 40 million
patients a year by 2020, almost doubling
our current reach. This can only be
achieved by reaching out to more people
in those parts of the world where diabetes
is growing at epidemic rates. We’re
confident that we’ll meet the target,
because when we set out towards a goal,
our entire organisation is behind it.
TB: How have the critical voices
responded to your new, big target?
SS: They’ve actually responded very
positively. The stakeholders who have
been most vocal about the need to close
this gap appreciate a commitment with
concrete and measurable targets with a
deadline. They can then name and shame
you if you fail to deliver on the target.
Some stakeholders will always want you
to do more and aim higher, but the most
important ones have been very positive.
TB: A recent challenge to Novo Nordisk’s
position as the stakeholders’ friend came
when the public healthcare sector in
Greece announced that it was no longer
able to pay your bills due to the debt crisis
in the country. You replied that you would
then not be able to supply your most
effective treatments any more. How did
this go down with stakeholders – and
how do you balance your brand promise
with profitability?
SS:Yes,thatwasseentoconflictwithour
brandpromisebysomestakeholders.But
notinourview.Inthespecificcasewe
madesurethattherewasalwaysan
effectivetreatmentavailabletopatients
whilenegotiatingwiththepublic
authoritiesinGreece.Wehadtowithdraw
ournewesttreatmentsforawhile.We
needtocareforpatientsintheshortterm,
butwealsoneedtomakesurewemake
enoughprofitstobeabletoinvestinthe
researchanddevelopmentthatwillallow
ustohopefullymeetthediabetes
challengesofthefutureandnotjustthe
present.AndourCEOveryclearly
explainedthispositioninthemedia
andwhywedidwhatwedid.Peopleare
freetodisagreewithus,butwehaveto
standourground.
Overall, I think we’re actually quite
consistent in our messaging from
different parts of the organisation – and
I agree with you that it is key to be – and
be seen – as a company with an authentic
social purpose. But I’d prefer to earn it
rather than claim it. And if we were to
come across as not being true to our
purpose, I am certain that our
stakeholders would hold us to account
and voice their expectations. That,
in fact, is an obligation, but also a
great motivation.

8. DIRECTIONS 2013 SALTERBAXTER
12 13
GemmaDodd@SalterbaxterLotsofcompaniesareplayinginthesocial
mediaspacewiththeirsustainability
messages,andafairproportionofthem
seemlessthanclearwhatitisthey’re
doingthere.Soasimplequestiontostart
with:whyissocialmediasuchan
importantpartofsustainability
communications?
MatthewYeomans@Custom Communication
Socialmediaandsustainabilitymake
perfectbedfellows.Whenyoustripthem
down,authenticityiscentraltoboth
sustainabilityandworthwhilesocial
media.Whensocialmediafirstarrivedit
changedtherulesontransparency–
demandingauthenticactionandholding
companiestoaccountveryquicklyforany
perceivedfailures.Inthesameway,that’s
whatsustainabilityismeanttotest–how
authenticcompaniesareinpursuingtheir
socialandenvironmentalgoals.GemmaDodd@SalterbaxterSowhatdoesthatmeanforcompanies
moreusedtobrandcommunicationinthe
socialspace?Cantheysimplyadapthow
theycommunicate?
MatthewYeomans@Custom Communication
Transparencyhasbecomeabitofacliché,
butbothsocialmediaandthe
sustainabilityagendadrivecompanies
towardsit.Theycutthroughtheway
companieshavetraditionallylookedat
brandmarketingandbrandcommunicationsandasksomemuch
deeperquestionsaboutwhatthe
businessisactuallydoing–andso
transparencybecomesveryimportant.Communityalsobecomesvital.While
previouslycompaniesandbrands
preacheddownatpeople,thatkindof
messagingdoesn’tworkanymore–
becausethecompaniesarenolongerup
onthehill,theareactuallydownamong
theregularpeople,andtheyarehavingto
buildcommunitywiththeverypeople
fromwhom,formanyyears,theysoughtto
distancethemselves.
Andfinallycreativityandcollaboration
becomeessential,becausewhenyou
lookattheamountofnoiseoutthere,
theamountofcontentbeinggenerated,findingawaytocut
throughiscruciallyimportant.GemmaDodd@SalterbaxterCreativityfeelsalongwayofffromthe
‘pressreleasefeedonTwitter’approach
thatalotofcompaniestaketotheir
sustainabilityeffortsonsocialchannels.
MatthewYeomans@Custom Communication
That’strue,butitseemstomeamassive
missedopportunity.What’sreally
interestingaboutsustainabilitywhen
broughttogetherwithsocialmediaisthat
itgivesyoutheopportunityforvery
powerfulcreativecontentandstory
telling.Socombinetransparency,
authenticity,community,collaboration
andcreativityandI’darguethatyou
probablyhavetheperfectcombinationfor
successfulsocialmedia.GemmaDodd@SalterbaxterSodoesitmakesenseforcompaniesto
treattheirsocialmediapresencefor
sustainabilityseparatelyfromtheirother
conversations?Orshouldtheybelooking
forintegrationintothesocialmainstream?
MatthewYeomans@Custom Communication
Idon’tthinkthere’sarightorwronganswer
tothat.Ithinkit’sgoodthatsustainability
istakenseriouslyenoughbycompanies
thattheyarededicatingsomeresourceto
communicatingitviadedicatedsocial
mediaplatforms.
Search iPad
#AUTHENTICIf it’s not just about likes and retweets, how do you do
sustainability in the social world? And how do you get some
real return for your efforts? Salterbaxter’s Gemma Dodd
talks to Matthew Yeomans.
GemmaDoddis Head of Digital
at Salterbaxter
MatthewYeomans is Founder of
Custom Communication and lead
author of the SMI-Wizness Social
Media Sustainability Index
AccountAccount

9. DIRECTIONS 2013 SALTERBAXTER
14 15
Search iPad
MatthewYeomans@Custom Communication
We need to see more companies actually
getting out there and producing the
sustainable work and products that give
them the stories to tell. It’s those stories
that will be the basis of more compelling
conversations, for any kind of audience
– whether that’s academics looking for
case studies or the Facebook and Twitter
audiences who want to get sneak peeks
and insights without a deep dive on
sustainability. If you’re actually doing
something good then it’s much easier to
use creativity to tell different stories to
different stakeholders.
GemmaDodd@Salterbaxter
Agreed – but I do think there is a role for
social media to be used to involve people
on their sustainability journey. But also
there’s an opportunity and a need to be
transparent about the journey itself.
Nobody has completely cracked it yet and
to an extent we are all learning how we
can get there. So to my mind it isn’t just
about creating social platforms, which
showcase the stories and the
achievements. Of course, there is a role
for that, especially to engage consumers
and drive brand equity and perception
around the sustainable merits of
products. However, there is also a crucial
role for corporates to create social
platforms which invite collaboration with
subject specific communities so that
they can generate new insights and
avenues which they couldn’t otherwise
do alone. Some of our clients are working
with us in this way and it is creating
huge opportunity for them. Social media
seems the very best place for that kind
of engagement and collaboration.
MatthewYeomans@Custom Communication
We’re talking about major corporations
that have built their DNA to make money
first and worry about everything else
second. So turning that super tanker
around – into companies that want to be
profitable but understand that
profitability comes from being energy
efficient, sustainable resource users,
good to their employees and communities
– it’s a big job. There is no company that
has really achieved it yet – I’d say even the
best companies are only 15 per cent along
that journey, and that makes the kind of
open engagement you’re describing very
challenging for them.
GemmaDodd@Salterbaxter
Exactly, it’s about looking at the different
ways that we can use social platforms.
Sure there is an essential role for social to
act as another communications channel,
providing you get your storytelling
approach right and create the right
exchange with your audience. But I think
there are other roles that social can play
for corporates – not least as a
collaboration tool, and a place to engage
with different communities and make
change happen. We are just beginning to
understand these different roles for
social – and tapping that potential is going
to be a big part of the coming years.
The SMI-Wizness Social Media
Sustainability Index is available at
socialmediainfluence.com/SMI-Wizness/
Talk to us about activating your online
community via salterbaxter.com
“If you’re actually doing something
good then it’s much easier to use
creativity to tell different stories
to different stakeholders.”
AccountAccount
Search iPad
their chosen issue and they use a very
different language to the sustainability
generalists. We’re trying to find ways to
unlock these micro-communities – to
open up corporate teams to different
people and different perspectives, and
to find ways of engaging that will
deliver change.
MatthewYeomans@Custom Communication
To me, the bottom line to do that is that
you have to be useful. So the question is:
are you actually saying something that
conveys value to the people you want to
connect with. Beyond the jargon and the
buzzwords, what content can you create?
And how can you use it to connect with
real communities that are interested in
specific issues?
GemmaDodd@Salterbaxter
Are there any companies doing this really
well yet, in your opinion?
MatthewYeomans@Custom Communication
It’s changing fast – three years ago there
were just a handful of companies who
even understood the importance of
communicating sustainability via social
media, and realised it was more than a
limited set of issues for a niche group of
stakeholders. Now there are lots of them
– realising that sustainability could
become a brand proposition if it can be
done in the right, authentic, transparent
way. But the telling thing is that there are
very few companies who are actually
doing what they say they would like to do.
The 15 companies that head the SMI
index stand out largely because they’re
talking about things they actually do,
rather than things they would like or hope
to be doing.
GemmaDodd@Salterbaxter
So the action has to come before the
conversation?
GemmaDodd@Salterbaxter
Your recent SMI report cites a lot of
organisations for their efforts to engage
consumers on sustainability issues.
Engaging consumers is crucially
important but there is also a role for
corporates to engage different audiences
as well, don’t you think? Sustainability-
aware stakeholders, opinion formers,
academics and so on, all have interesting
roles to play with corporates too –
especially given the innovation challenge
that many companies need collaborators
to tackle. These people are just as
important as consumers but they might
need a very different kind of conversation
and community.
MatthewYeomans@Custom Communication
Well it’s worth pointing out that social
media isn’t just about consumers or any
particular big audience, it’s about the
ability to reach niche audiences, to cherry
pick, to create communications and
interactions based on what people care
about. Social media have blown away the
idea that only particular stakeholders
care about sustainability – and opened
companies’ eyes to the fact that – guess
what? – there are regular folk out there
who wanted to know about it as well.
GemmaDodd@Salterbaxter
Yes, and we have found lots of evidence to
prove that the sustainability audiences on
social platforms are made up of lots of
different micro-communities. There are of
course your sustainability generalists who
are crucially important people for
consulting with corporates and
evangelising on issues. But we’re finding
really interesting data on very active
communities centred on specific issues
– like building skills in communities or
water. They are subject-specific, and
involved in making change happen on
AccountAccount

10. DIRECTIONS 2013 SALTERBAXTER
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CORE
VALUES
TANSYDRAKE
innocent
innocentisoftencitedasanexemplarfor
itscommitmenttosustainability.Andwhile
it’ssomethingwe’vebeenhotonsincewe
startedwearefarfromperfect,justatthe
startofourjourneyinfact.Whatweare
proudofhowever,isthatitisaninbuilt
considerationofallthatwedo–beitinthe
office,thesupplychainorthefinaldrinkon
theshelf.We’dliketogettoaplacewhere
it’snotcelebratedasananomalyinthe
industry,butcommontoallbusinesses
andtheiremployees’attitudes.
VALUES FROM THE START
To ensure that’s the case at Fruit Towers
we ensure everyone joining the team
shares the innocent values. We have five,
which are at the core of the business.
We’ve structured our recruitment around
them and our first round interviews are
purely to filter out those who might not
prioritise the same things we do.
As Apple’s head of hiring once put it,
By focusing on sustainability
from the start, innocent has made
authenticity part of its culture
and its offer to consumers.
It’s a good place to be, argues
innocent’s Tansy Drake.

11. DIRECTIONS 2013 SALTERBAXTER
18 19
‘We’dratherhaveaholethananarsehole
workinghere’.Weagreewholeheartedly
andsoifwecan’tfindacandidatewiththe
rightinitialattitudethenwe’llwaituntilwe
do.Appropriateskillscomesecond.
innocent’s values were written by the
company when it stood at 45 people and
there was a fear we were growing too big
to guarantee we were all pulling in the
same direction. But while there was some
finessing, they came pretty easily and are
genuinely something everyone buys into.
As well as coming naturally (having been
recruited against them) they are upheld
with both carrot and stick. They are
empowering – giving every one of us
permission to improve things (leaving
things a little better than you find them is
our shorthand), but we also know we will
be measured twice a year against how
well we are ‘living the values’. So alongside
our personal objectives, staying true to
innocent’s values affects performance-
related pay.
We believe this three-pronged attention
on our values – recruiting the right people,
empowering employees to go beyond their
day-to-day remit to improve things and
placing an emotional as well as financial
expectation to work to them – has gone a
long way to ensuring our business
intentions are genuine. We also believe it’s
an important part of why they are also
seen as authentic by our customers
and consumers.
Careful recruitment and a focus on values
take us a long way towards a
sustainability culture, but they aren’t
enough on their own. So on top of our
company-wide commitment to
responsibility, we have a team of three
committed to driving longer-term projects
and strategy. They are supported by
champions planted in each bit of the
business who have a fifth of their role
devoted to sustainability – from the way
we source our fruit to the way we pack
presents for consumers. All in all, our
commitment to making things a little
better than we found them is strong at
innocent. It flows from left to right,
bottom to top.
ENGAGING THE CONSUMER
We’vealwaysbeenopen,honestand
transparentaboutwhatwe’reupto.
FromourrPET(recycledpolyethylene
terephtalate)journeytogeneralstories
aboutsustainabilitywehavenotshied
awayfromsharingourthoughtsor
worryingthatitdidn’tinterestourdrinkers.
Butlikeourvalues,thishascomenaturally
tous.Wesetthebusinessupmaking
thingsthatwewantedtodrink.Sowe
spoketopeoplelikewe’dspeaktoour
friends.OrMum.Orthemaninthe
newsagent.Wetalkedaboutthethingswe
wereuptoandwhatwasimportanttous.
And that included our impact on the
world. We want to tread as lightly as we
can. The consistency of that message and
that it flows through everything we do has
helped make what we say credible, I think.
It’s not a campaign or a bit of greenwash
designed to ingratiate ourselves with
ethically-aware consumers (which rarely
works – gladly people are pretty savvy
and can see through ‘marketing’ quickly).
Instead it is part of our DNA; we are
spiritually aligned as innocent Founder
Richard Reed would say.
STAYING INNOCENT WITH COKE
In May we sold the majority of our shares
to the Coca-Cola Company. As expected,
our drinkers and the press picked up on
the story and some began to question
whether we would lose our distinctive
values and approach as a result. But
nothing has changed at Fruit Towers. We
don’t plan to alter our commitment to
sustainability – we’re pleased that, as
promised, Coke trust us to run our
company and brand in the way that
makes it a success. And having the best
people, which to us means folks that live
our values and champion being
responsible, remains the cornerstone.
In fact we have bigger ambitions for
projectssincewejoinedtheCokeportfolio.
They have helped to enhance our
sustainabilityworkbysupportinguson
two major agriculture projects in Europe.
And in turn, we’re already sharing our
expertise with them. We see it as a great
opportunitytomakeabiggerimpactrather
than working in silos. Two sustainability
heads are better than one as they say.
We still have a long way to go until we will
be satisfied with our efforts – in fact I
don’t think that journey will ever end.
There are always things that can be
bettered. But that being responsible is a
central commitment, backed up with
passion and resource, is something that
fills me with confidence that we will
continue to reduce our impact on the
planet as we grow as a company. And with
scale, you hope we might be able to
trigger some industry-wide focus and
commitments.
For 10 years innocent has run its big knit campaign –
with woolly hats knitted by the public raising
money for Age UK (and their European equivalents).
So far over four million hats have been popped on
bottles and £1 million raised.

12. IOANNISIOANNOU
London Business School, www.ioannou.us
business as usual. A substantive action
would be that the company also trains
their managers on using the Code of
Conduct in their day-to-day decisions, or
has a certain percentage of women on the
Board of Directors, or actually uses
renewable energy rather than setting a
target to use it, or that the company
pursues third-party auditing of their
sustainability report.
To assess the different impact of those
two types of actions on business
Greenwash has become a byword
for the worst kind of sustainability
strategy – all talk and no action.
But have we thrown the baby out
with the green bathwater? There
may be some commercial value in
talking up your sustainability
plans, as long as the real action
follows, argues Ioannis Ioannou.
One of the most common complaints
I hear from sustainability teams in
business is how frustrating it is to see a
competitor getting lots of credit for their
sustainability programme, despite having
done little in practice – and certainly less
than they have. The accusations of
greenwash fly, but at the same time, the
frustration is in part a realisation that
these competitors are getting some real
value from their better profile – perhaps a
positive reputational hit that can have all
sorts of knock-on effects, both inside and
outside the business, including more
momentum for some real action.
CANITBEAMOREEFFECTIVE
INVESTMENTTOTALKABOUT
WHATYOURSUSTAINABILITY
PROGRAMMEMIGHTDO,
THANTOACTUALLYDO
SOMETHING?
All of which raises the question – can it be
a more effective investment to talk about
what your sustainability programme
might do, than to actually do something?
I’ve been exploring this question with my
colleague Professor Olga Hawn of Boston
University, through the lens of what we
term ‘symbolic’ and ‘substantive’ action. It
sounds complex, but in fact it’s quite
simple. A lot of companies out there
pursue what we call symbolic
sustainability action. Mostly that consists
of public reporting of intent to do
something. For instance, company X
might report that they favour promotion
from within, or that they have a CSR
committee, or even that they now have a
Code of Conduct. These are symbolic
actions in that they create the sense and
perception of action predominantly in
external audiences, despite the fact that
– generally – not much changes from
performance, we developed a new
empirical methodology that characterises
a firm’s market value as a function of its
existing tangible assets and intangible
resources in combination with its current
CSR actions, whether symbolic or
substantive. We then identified two sets
of policies – one symbolic and the other
substantive, and checked the impact on
the market value for companies that
undertake symbolic, substantive or both
types of actions conditional on the level of
their existing intangible resources. We
looked at 2,261 firms in 43 countries over
seven years (2002 to 2008).
REPUTATION CREATES MOMENTUM
What we found is that if you are a
company that has already established a
high level of intangible resources in terms
of sustainability – for example, a good
reputation – then chances are that the
symbolic action will be more beneficial
because it is a lower cost way of
maintaining the underlying resources –
by confirming and re-enforcing existing
expectations. The larger the stock of
existing resources, then the higher the
DIRECTIONS 2013 SALTERBAXTER
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13. DIRECTIONS 2013 SALTERBAXTER
22 23
purchasing decision, the large majority
does not. Certification schemes are in
reality relatively less significant for
consumers than they are to the supply
chain. If you certify you’ll probably have a
more stable supply chain with less risk. It
is not the communications of the
certification to the consumer that
generates the value but the reduction of
the risk and the increase of the quality of
the underlying product. Effectively, a
certification scheme becomes a valuable
engagement tool for companies through
which to build long-term relationships,
based on trust and collaboration, with
their suppliers.
So if telling the consumer about your
certification is not likely to drive big
shifts in purchases, why bother?
The supply chain knows, so why
communicate further if the
benefit is more likely to be
realised through a different
key stakeholder? There
may be more value in
communicating product
quality, or other CSR
strategies that might resonate
or deliver value to consumers
more than a supply chain
certification. The symbolic claim
is not really adding any value to
the substantive action.
REACHING OUT TO INVESTORS
Investors, on the other hand, need a
different approach where alignment of
symbol and substance is vital, but
strategic relevance is the real test.
Investors don’t only care if companies tell
the truth. It’s important but it only
matters if that truth actually makes
sense in the broader strategic context
and if it’s truly integrated in the
company’s business model. And very
often it isn’t.
Investors are often grouped and
discussed together as stakeholders, but
not all investors are the same. Investors
focused on sustainability are more likely
to be looking for the things we know drive
outperformance: transparency,
impact that symbolic actions have on
performance. And the reverse is also true
– a company that has already established
strong environmental capabilities for
example, will likely generate less marginal
return from undertaking additional
environmental action than a firm that has
yet to do much. But if you are a company
still relatively new to sustainability, with
little action under your belt (i.e. low levels
of intangible resources), symbolic action
is less effective because you have more to
gain by undertaking substantive actions
– by actually walking the walk.
What’s also interesting is the effect of
doing both. Both making and acting
upon your declarations is the most
beneficial strategy in terms of
market value, and the more the
two are linked the better the
outcome. Markets are willing to
reward you when you announce
something and then reward
you more when you follow up.
The critical corollary is of
course that if you declare
something without later
backing it up with actions,
then risks open up from
scrutiny and accountability.
COMMUNICATING FOR ROI
What does all this mean for
companies wanting to get better at
managing perceptions and finding a
return from their sustainability work?
Since CSR is such a broad and diverse
area, and corporate communications
resources are scarce, our work suggests
that companies need to evaluate when
it is worth communicating what they
are doing, and to whom, in terms of
the likely return.
Ecolabels make an interesting example.
We know from consumer research that
ecolabels – certification on coffee or tea
for example – have an effect on consumer
purchasing behaviour, but only a small
one. Lots of consumers say in surveys
that they would buy a certified product
but when it comes to the actual
THEREISALOTOFNOISEIN
THESYSTEM,ANDLOTSOF
COMPANIESDOING
SUBSTANTIVETHINGS
BECAUSEOTHERCOMPANIES
ARE,RATHERTHANFORANY
SOLIDSTRATEGICREASON
accountability, third party assurance and
so on. As I found in another study with
Professor Bob Eccles and George
Serafeim, of Harvard Business School,
such investors tend to have much more
focused portfolios and they trade less
often, whereas investors with diversified
portfolios, trading more often, are more
likely to be found in the investor base of
more short-term oriented companies.
So there is a growing percentage of
investors who are strongly taking into
account the long-term thinking of the
company, their transparency, and their
accountability. But there is of course a
significant portion that are not. In the
longer term, as more evidence
accumulates around the outperformance
of sustainable companies, the market will
hopefully correct; with the help, of course,
of institutional changes, and
governmental policies. But we are in a
transitional phase where investors are
trying to make sense of all of this, with
lots of companies making lots of
disclosures, and no universal reporting or
auditing standards. As a result, there is a
lot of noise in the system, and lots of
companies doing substantive things
because other companies are, rather
than for any solid strategic reason.
They might be authentic in reporting
what it is that they are doing, but true
authenticity would also mean deep
strategic understanding of the
activities they are engaging in.
Where does this leave companies trying
to communicate a long-term view? From
an investor perspective, the Unilever
example is interesting. CEO Paul Polman
actually discouraged hedge funds from
having ownership of Unilever, and sure
enough their share went from 15 per cent
in 2009 to 5 per cent in 2012. Making such
a choice inevitably requires trade-offs,
but the trade-offs may not be as bad as
you think. Short-term investors need
share volatility to make money. By losing
them the volatility reduces, giving the
company a bit more of the flexibility
needed for long-term strategy to work.
BRINGING SUBSTANCE AND SYMBOL
TOGETHER IN REPORTING
There are lots of barriers to transparency:
it’s both challenging and expensive to put
the metrics in place for environmental
and social performance, particularly with
the quality and accuracy that is typical for
financial data. In a downturn most
companies revert to being focused on
more traditional elements of financial
performance. Sustainability is also
something that companies are only
beginning to understand and requires
levels of transparency and accountability
way beyond what they were used to
in the past.
That’s why I believe integrated reporting
is going to become an increasingly
significant test of how well companies
are aligning strategy, substance and
symbol, and an increasingly valuable
tool in the hands of investors. Integrated
reports represent a step change in
transparency: cutting through the
narrative and pictures of sustainability
reporting with a much harder test of
performance: disclosure that truly
integrates a company’s financial
performance with its environmental and
social performance. A form of reporting
that requires a deep understanding of the
company’s strategy within the economic
context but also within the social and
environmental context, in a holistic way.
This approach signals to an investor that
the business really understands the risks
and the potential opportunities that arise
from ESG factors but also communicates
the ways in which ESG factors are
integrated into the business model.
Together with a more rigorous approach
to materiality, integrated reports set a
much higher bar than sustainability
reports. And if a firm aims to reach this
bar, this is already a signal that there is a
substance there.
Ioannis Ioannou’s paper ‘Do Actions Speak
Louder than Words? The Case of Corporate
Social Responsibility (CSR)’ is available at
papers.ssrn.com
BOTHMAKINGANDACTING
UPONYOURDECLARATIONSIS
THEMOSTBENEFICIAL
STRATEGYINTERMSOF
MARKETVALUE,ANDTHE
MORETHETWOARELINKED
THEBETTERTHEOUTCOME

14. DIRECTIONS 2013 SALTERBAXTER
BENTUXWORTH
Head of Sustainability, Salterbaxter
JEAN-YVESJAULT
General Manager, Corporate Communication, Toyota Motor Europe
PLUGIN,TURNON,
STANDOUTOn the one hand, it means things can get
tougher in theory. On the other, the more
other brands communicate on hybrids
and other green technology, the more
customers become educated and
attracted to this new mobility. In fact, the
hybrid market in Europe grew by 45 per
cent between 2012 and 2013. Last year,
we had a 65 per cent share, and so far in
2013 our share has grown to 75 per cent.
So, having more players doesn’t mean
less business for Toyota. We have a
considerable lead in creating, developing,
selling and servicing vehicles with petrol-
hybrid technology. We have sold more
than 5.5 million hybrids worldwide since
1997. That’s a long experience. You don’t
How did Toyota become the
world’s greenest brand with the
world’s best selling green car – and
how does the company live up to
its sustainability credentials? Ben
Tuxworth talks to Jean-Yves Jault
of Toyota Motor Europe.
BT: You’re just back from the Frankfurt
Motorshow. BMW launched the i8, and
others are taking some bold positions
on their eco-credentials. What does it
mean for you?
JJ: We fully respect our competitors, and
what we say is “Welcome to the club.”
24 25

15. DIRECTIONS 2013 SALTERBAXTER
26 27
market a hybrid like a conventional
vehicle. The sales process is also
different. And you need the credibility that
comes with customers’ recognition that
your hybrid cars are just as reliable, if not
more, than your ‘normal’ cars. We’re now
focused on bringing more emotion to our
hybrid offering, playing not just the
rational card but putting forward the
peace of mind, the enjoyment of a
different way of driving – and the fun,
through our engagement in the World
Endurance Championship with a hybrid.
BT: Consumers identify Toyota as green
mainly because of the Prius. Does such a
hero product make it harder or easier to
position the rest of the business?
JJ: The Prius is a tremendous brand
asset. For many people, it is ‘the’ green
car. It has a long history, excellent brand
recognition, and symbolises our early
realisation that developing a car for the
21st century that would be 50 per cent
more fuel efficient than a conventional
car at the time, was one of the keys to our
long-term success as a company. But
Prius was only the beginning for us. Since
then, we have developed our hybrid
portfolio, aiming to have our Hybrid
Synergy Drive powertrain available in
every vehicle by 2020. To date, we have
more than 23 hybrids for sale in 80
countries and regions worldwide. And
between now and 2015, an additional 15
new or redesigned hybrids will be added,
including a Fuel Cell hybrid car. So, hybrid
is becoming synonymous with ‘the
alternative way to drive’, whether it’s a
B-segment Yaris, a C-segment Auris, or
any of our Lexus vehicles. At the same
time, we have improved our hybrid
technology, following our principle of
continuous improvement or kaizen. We
are working on our fourth generation
hybrid system, and with each of the
previous generations, we’ve improved fuel
economy and emissions by 10 per cent,
improved output by 30 per cent, and
decreased cost by more than two-thirds.
Finally, we also brought hybrid to the
World Endurance Championship last year,
where we competed head-to-head with
Audi – we finished a very respectable 2nd
and 4th at this year’s Le Mans 24 Hours
race. Our hybrid technology is the basis
for our entire map of the mobility of the
future. In this map, you have small, pure
electric vehicles for short distance driving
in urban centres. In the middle are hybrids
and plug-in hybrids, which offer excellent
fuel economy and versatility of use,
without any range anxiety. And at the
other end will be hydrogen fuel-cell
vehicles – they will ultimately offer the
same range as conventional cars today,
around 500 to 700 km, quick refuelling,
and no emissions other than water
vapour. Our hybrid technology underpins
all these different solutions.
BT: Prius is a remarkable story – not least
because you knew it would be a 20-year
investment before seeing any return. Do
you think Prius happened because of
something fundamental about Toyota?
Or could it have happened anywhere?
JJ: I’ve been working at Toyota for close to
18 years now, in various functions. Much
has been written about, ‘The Toyota Way’,
and our Toyota Production System.
I would pick three elements, which make
this company somewhat different:
‘Long-Term View’, ‘Challenge’ and
‘Perseverance’. I remember reading an
interview with former Toyota Chairman
Hiroshi Okuda in the French newspaper
Libération, in 2002. He was answering a
question about shareholder value and
whether it was relevant for Toyota. He said
“one has to give back returns to
shareholders, but also to employees and
society as a whole. I would like for
shareholders to obtain happiness, but
long-term happiness. That is, for me, the
only true corporate governance.” In other
words, as manufacturers, we must focus
on the long term and not be subject to the
diktat of quarterly earnings reports. In
everything I have ever done at Toyota, my
peers, my bosses, my Japanese
colleagues have always asked me:
“what is your long-term plan?”
Challenge is equally important. It means
“don’t be afraid to give yourself an
ambitious target”. It’s OK if you miss that
target ultimately – what matters is that by
setting yourself such a difficult, almost
‘impossible to attain’ objective, you will
move mountains in the process and
achieve much more. It’s OK to fail, as long
as your goals were worth it and you learnt
something in the process. I think the Prius
story is such a story: the leaders of the
time had a vision – a fuel efficient car for
the 21st century. They started working on
Prius around 1993. They had many trials
and tribulations, but they persevered with
the challenge and eventually came out
with the first Prius. Then, they did not
stop: they kept on refining it, and with a bit
of luck (Leonardo Di Caprio and Cameron
Diaz’s appearance at the Oscar ceremony
in a Prius did help a bit), it became a
market success.
BT: Does Prius raise consumer and
stakeholder expectations of Toyota
across the board? Do you have to be
the greenest company for everyone,
in everything?
JJ: Today, customers are not just
customers but also citizens. So when you
make decisions, take actions or
communicate, it’s important to be
coherent. Toyota’s environmental focus is
not just on developing and making cars
with lower tailpipe emissions. We take a
360-degree approach, from design to
purchasing to logistics and production, all
the way to sales and after sales. Our
environmental charter applies to all areas
of the company. But it’s important not to
be ‘green’ just for the sake of it. Our true
focus is on green growth. Without a sound
business model, any green initiative won’t
be sustainable. Take the example of EV.
We’re ready with the technology, but the
market doesn’t seem to be mature yet. In
the current state of battery technology
development, there are still many
constraints such as high cost and low
efficiency, which means limited range or
increased weight and price. Customers
aren’t prepared for that trade-off. So, we
keep working on advanced battery
technology. Meanwhile, we believe the
plug-in hybrid is probably the most
sensible solution for the next few decades
if we want to make a significant positive
environmental impact in the short term.
We think it’s better for the planet to sell
millions of hybrids and plug-ins than a few
EVs, even if those are zero emission.
BT: Does the relentless consumer focus
on cost make it harder to position
what’s valuable about Prius and the
eco-credentials of your vehicles?
JJ: The early adopters generally spend
more to get the best environmental
technology available. But you’re right, the
average customer is only prepared to
spend so much on a car. That’s a given.
Brand value can help bring that up – the
more desirable a brand is, the bigger the
potential to reach a good sales price.
Brand is about emotion – what kind of
benefit, beyond the rational, does one get
from the brand. The other component is
cost – and it’s our job to bring it down. At
the start of a new technology, incentives
can and do help. But our business model
cannot be based on them. So we work on
bringing down the cost of our technology
so that we can offer it at a competitive
price – this is especially critical for a
mainstream brand like Toyota. Today, you
can buy a Yaris Hybrid for roughly the
same price as a diesel equivalent, at a
comparable level of equipment. We’ve
reached a hybrid tipping point in Europe.
Around 40 per cent of our sales of Yaris
and Auris are hybrids, and one in four cars
we sold in Western Europe so far this year
is a hybrid. We believe that innovation,
together with emotion, is a good recipe.
BT: How does the sustainability
proposition you make to consumers and
others vary across different markets? Can
you be consistent?
JJ: It’s more a question of timing. Around
the world we are recognised for two
strengths – quality and reliability; and
environmental technology. In developed
markets, such as Japan, the US and
Europe, environmental aspects are much
more important societal issues and
drivers of customer behaviour. In
emerging markets, we still lean more on
our quality and reliability reputation. But
that will change – probably faster than we
think – and when it does, we will be ready
to deploy a range of environmentally-
friendly vehicles in these markets. China
is already signalling that it intends to
encourage green mobility. We believe it is
part of our responsibility as a global
corporate citizen to provide clean mobility
to the millions of future customers who
will soon have access to mobility –
otherwise, the environmental impact of
the growth of automobile sales in the next
20 to 30 years will outweigh the benefits
to those societies. We’re already
producing Prius in China and we’ve
recently opened and expanded an R&D
centre there to develop vehicles for that
market – even if at present, Chinese
customers prefer conventional cars.
BT: With concepts like the Toyota home
energy management system in
development, it feels like there will be a
big communications challenge in
positioning Toyota as a provider of energy
solutions rather than a car maker.
JJ: Viewed from Europe, Toyota is known
mainly as an automotive company. But
in Japan, Toyota is involved in several
non-automotive businesses – housing,
financial services, e-commerce, marine,
biotechnology, robotics and afforestation.
The home energy management system is
a natural evolution of two areas of
Toyota’s business: the upcoming rise in
plug-in vehicles, and our housing
business, which provides prefabricated
homes equipped with solar panels. With
the rise of pure electric or plug-in hybrid
vehicle sales, the problem of managing
peak power demand will be significant. So
we’ve started developing smart homes,
vehicle-to-home communication, and a
smart data centre to monitor energy
consumption and usage, weather
conditions, and pick the best time to
charge vehicles or using the energy stored
in the car’s battery to power your
dishwasher. Car companies will have to
become providers of mobility in a broader
sense in the future, and the demands on
us will go beyond the pure automotive
product. Partnerships will be an
important part of tackling these
technological challenges: helping us
set-up new charging standards, as we are
doing in Japan with other car companies;
or helping us envisage how private and
public transport will work together, as we
will start doing in Grenoble next year; and
helping us share the tremendous
investments necessary to develop future
technologies, as illustrated in our new
partnership with BMW.
BT: You’re the world’s greenest brand, with
the world’s best-selling hybrid vehicle.
Where do you see Toyota in 10 to
20 years’ time?
JJ: We hope that we will be able to
continue bringing smiles to our
customers’ faces – this will be the result
of many other things going right, and it will
be our biggest reward. Whether we are
Number 1 or not, is not our focus. That
should be the result of being the best in
quality, customer satisfaction,
environmental technologies, and bringing
value to our stakeholders.
PRIUSWASONLYTHE
BEGINNINGFORUS.SINCE
THEN,WEHAVE
CONSIDERABLYDEVELOPED
OURHYBRIDPORTFOLIO,
WITHTHEAIMOFHAVINGOUR
HYBRIDSYNERGYDRIVE
POWERTRAINAVAILABLEIN
EVERYVEHICLEBY2020
WETAKEA360-DEGREE
APPROACH,FROMDESIGN
TOPURCHASINGTO
LOGISTICSANDPRODUCTION,
ALLTHEWAYTOSALES
ANDAFTERSALES

16. DIRECTIONS 2013 SALTERBAXTER
28 29
DIANAVERDENIETO
Founder, Positive Luxury
Sustainability and luxury may
sound like opposites, but the
fashion industry is finding ways to
make them complement each
other, argues Diana Verde Nieto.
Fashion, with its connotations of high
consumption, novelty and rapid turnover
may sound like the last place you’d look
for true sustainability, particularly at the
luxury end of the market where excess
has been a major part of the offer. But like
other industries, the brands behind luxury
are facing up to the challenge of
sustainability and the changing values of
their customers. Luxury is being
redefined. The ‘new’ luxury is a paired-
down, less conspicuous version of its
elder, lavish, bling incarnation. And along
the way, it is reacquainting itself with its
traditional values of timelessness,
durability and exquisite craftsmanship –
the new rules of luxury that any advocate
of sustainability could get behind.
CSR has been a good start for their
sustainability journey, but to reap the
rewards of using sustainable methods,
the luxury industry needs to
communicate these efforts to the
consumer in ways that suggest
transparency and added value.
BADGES OF TRUST
For luxury goods brands, finding ways to
bring sustainability into the proposition is
still challenging, and as with other
sectors, trustmarks are playing an
increasingly important role. They are a
way of letting the consumer know, at a
glance, that a product comes from a
brand they can trust, and an immediate
way of communicating a company’s
environmental and ethical standards.
There are of course hundreds of labels
and accreditation programmes for
sustainability, but they still tend to focus
on limited aspects of how a brand
operates. Fair Trade or the Rainforest
Alliance focus on aspects of the supply
chain and business model; other badges
relate to energy performance or
recyclability. My aim when setting-up
Positive Luxury and our Blue Butterfly
was to create an interactive trust mark
that looks at a brand’s overall
performance. The Blue Butterfly is
awarded to brands that have a positive
impact on both people and the planet,
and we aim to guide the consumer away
from inadvertently funding companies
with poor sustainability performance
towards more positive purchases.
The future for luxury brands is bound up
in sustainability. They will not be
described as ‘ethical brands’ as these
characteristics will be inherent within
every brand that survives. The choices
made now by the luxury industry will
determine who it is that sinks or swims.
Diana Verde Nieto is the Founder and CEO
of Positive Luxury, positiveluxury.com
Under these new rules, two types of
consumer are emerging and changing the
way fashion works. One is the wealthy
consumer who might previously have
commissioned three £30,000 bespoke
outfits per season, and who is now only
requesting one, and making it work hard
throughout the season by recycling it for
different occasions, albeit with some new
accessories. The idea of wearing the
same outfit twice might have filled the
contemporary fashionista with horror ten
years ago, but now the taboo has lifted
and it is becoming unsavoury to show
such excess.
The second consumer profile is the
Generation Y shopper: recession-riddled
eco-educated young people who see
thriftiness as their greatest asset.
Flagrantly mixing high street with haute
couture, these millennials are more likely
to shop in sales and only drop large sums
of money on statement pieces that boast
versatility. They are also creating a new
trend in consumer purchase in which
heritage brands are disregarded for newer
‘clean-slate’ brands that are sustainable
from the outset, use simple consumer-
facing dialogue and because of their
authenticity on digital platforms are seen
as far more accessible and engaging.
COMMUNICATING THE NEW LUXURY
Despite these changes under way in the
fashion industry, and the many initiatives
focused on improving the social and
environmental performance of supply
chains, there is still surprisingly little
information available to consumers on
where their money goes and where the
product comes from. But consumers are
catching on, and recent incidents such as
the collapse of the Bangladeshi garment
factory have brought issues of
transparency to the fore. As a result, we’re
beginning to see higher consumer
demand for products that are transparent
and traceable. Companies such as
De Beers diamonds are pioneering
transparency that is as clear as their
stones. With an entire website dedicated
to their sustainability credentials,
managing their mining environment, their
work ethic and maximising the value of
diamonds to producer nations,
consumers can purchase their diamonds
knowing exactly where they have come
from, the processes they go through and
that their environmental impact is
minimised. No blood-diamonds here.
With companies such as De Beers leading
the way, others in the luxury sector are
bringing their sustainability programmes
out from the store room and into the shop
window, and the consumer is being
encouraged to dissect the product.
Stella McCartney is innovating
eco-products for the 2013 collection,
including biodegradable shoes that
decompose when composted, and faux
fur made with over 50 per cent vegetable
oil. Watchmaker IWC is launching its own
corporate social responsibility website
as an addition to its retail site. Fashion
house Jaida Hay has a ‘Follow Your
Garment’ feature online.

17. DIRECTIONS 2013 SALTERBAXTER
30 31
KAIPETERS
Chief Executive of Ashridge Business School
What’s the connection
between personal
and organisational
authenticity? Kai
Peters explores.
As companies pursue
purpose-based
strategies for
sustainability, they face
the very real challenge of
how to create working
environments in which these
values are actually
manifested. In seeking to create
shared sustainable value across an
entire corporate eco-system, the
interests of the entire supply chain and of
all other stakeholders must be aligned.
This challenge is real and recognised. We
have conducted a number of studies at
Ashridge over the past five years in which
we have surveyed chief executives around
the world. In one survey of 200 CEOs,
76 per cent stated emphatically that it
was important for leaders in their own
organisations to have the skills, mindsets
and capabilities to lead in a holistic
manner, but that only 8 per cent believed
that these attributes presently existed in
their own organisations. In a follow-up
study with 800 CEOs, 88 per cent
indicated that developing the required
skills and abilities necessitated role
modelling the desired behaviours and
educating everyone in the stakeholder
community appropriately.
The CEOs involved identified three broad
clusters of skills needs. The first was
context, including an understanding of
customer needs, legislation, resources
scarcity and competitive behaviour. The
second was complexity – coping with
ambiguity and trade-offs, learning from
mistakes, and developing the capacities
to deal with ethical dilemmas. The third
cluster, connectedness, was about
understanding diversity, developing a
shared vision with stakeholders, and
raising issues of responsible
management with staff.
Identifying needs such as these is
relatively simple, but meeting them is of
course much more challenging. In a series
of articles and most recently in the book,
Steward Leadership, we have set out to
identify both the enablers and stumbling
blocks for achieving authentic,
sustainable leadership.

18. DIRECTIONS 2013 SALTERBAXTER
32 33
and biological processes, but through
internal reflection and insight, and
the rate of change is not predictable.
As psychologist Angela Pfaffenberger
puts it: “a certain type of person appears
to be more likely to progress in
development. Individuals who achieve
higher ego states are likely to have higher
intelligence, socioeconomic status and
education. They are resilient, flexible, and
more liberal. They show an inclination
towards self-exploration, curiosity and
experimentation, and they value novelty”.
From our work, these latter individuals
are more able to engage on a journey in
which critical information is noticed,
questioned, validated and utilised to
challenge and ultimately change
assumptions. This leads to ethical
decision making, and true engagement
with authenticity and sustainability.
So what does the research about
personal authenticity mean for corporate
or organisational level authenticity? First,
it means that making sweeping
statements about corporate level values
without engaging with the leadership and
staff throughout the organisation is a sure
path to failure. Second, it means that
while many people within an organisation
can develop their levels of maturity and
achieve higher levels of development,
others will always struggle with more
complex and sophisticated ethical and
sustainability challenges. Lastly, and
conclusively, it means that ongoing
education, engagement and reflection
with staff as well as with the critical
organisational stakeholders and
customers is critical to the development
of sustainable, authentic organisational
leadership and brand level
communications. To be believed, the
stories organisations tell must be true,
consistent and authentic.
Kai Peters is the Chief Executive of
Ashridge Business School in Hertfordshire.
He is co-author, together with Kurt April
and Julia Kukard, of Steward Leadership:
A Maturational Perspective published by
the University of Cape Town Press (2013).
He also writes extensively on strategy,
leadership and learning.
UNILEVER SUSTAINABLE
LIVING PLAN
Unilever is pursuing authentic and
steward leadership to create shared
valuefortheorganisationandsociety.An
annual Sustainable Living Plan progress
report sets out progress toward their
10-year strategy which aims to improve
the health and well-being of a billion
people and source 100 per cent of raw
materials sustainably. Since these
initiatives are driven both by a moral
duty and a business opportunity,
management development at Unilever is
working hard on integrating shared
value creation and sustainability
throughouttheorganisationby, for
example, encouraging R&D to innovate,
and all employees to understand
sustainability and to engage with their
stakeholder communities including
suppliers and consumers. A central
component in this endeavour is the
sustainable living lab, an initiative to
build the debate and action both within
and outside Unilever on the key
challenges to sustainable living.
INTERFACE FAST FORWARD TO 2020
Interface designs, produces and sells
modular flooring systems, with
manufacturing locations on four
continents and offices in more than 100
countries, and a vision to become ‘the
world’s first environmentally restorative
company’ by 2020. Supporting this
ambitious endeavour, Interface’s ‘Fast
Forward to 2020’ is a comprehensive
education programme which has been
running since 2004. Employees must
have participated in certain levels of the
programme, and where appropriate
passed a graded assessment, to be
eligible to be considered for promotion
to more senior roles.
Interface facilitates a network of
sustainability champions called
Ambassadors, drawn from across all
business functions and regions.
Ambassadors act as a network of
change agents within the organisation.
They are offered regular inspirational
sessions through the year, and are
expected to develop their own
sustainability projects, supported by an
internal communications platform.
Level 1 is for all employees, embedded
in the induction process and covering
key issues around sustainability and
Interface’s strategy and approach.
Level 2 is a one-day programme with
customised content for marketers,
sales, operations, human resources and
other functions. The focus of the
programme is on building knowledge
around sustainable development and
what it means for the business.
Participants focus on the personal
question: ‘How do I contribute to
Interface’s vision of being the world’s
first environmentally restorative
company by 2020 as an individual? What
does this mean for my part of the
business and my role?’ Participants
must pass a test and complete an
assignment, developing a proposal for a
sustainability project, many of which
have been implemented by the
company. Around 50 per cent of staff
have participated in Level 2, including all
team leaders, all senior management,
all sales, marketing and
communications executives and all
sustainability ‘Ambassadors’.
Level 3 is a two-day course for selected
individuals, mostly from amongst senior
staff and Ambassadors. Alongside
further skill development, participants
undertake their own research into future
trends that will impact the business,
and debate the complex choices that
come from issues such as nuclear
power or the role of business in
alleviating poverty. Assessment is via an
assignment and an assessed mock
television interview, carried out and
filmed by a tv journalist.
In Steward Leadership, we’ve set
out a nine-component
framework to provide a definitive
perspective on what authentic,
steward leadership looks like:
1. Personal Mastery: creating
what you want from your life
and work
2. Personal Vision: the
purposefulness of personal
direction and commitment to
getting things done
3. Mentoring: paying attention
to, and acting on, the needs
and development of others
4. Valuing Diversity: seeking out
and working with varied voices
5. Shared Vision: creating shared
value with stakeholders
6. Risk-taking and Experimentation:
openness to new ideas
7. Vulnerability and Maturity:
understanding the limits of your
knowledge and perspectives
8. Raising Awareness: communicating
the centrality of sustainability
9. Delivering Results: action and not
only talk
Different leaders and managers fall onto
different points on a steward leadership
maturity scale. A number of factors
appear to be key to achieving greater
maturity and a more holistic and
authentic perspective. The educational
theorist Jean Piaget developed a
framework which investigates these
issues. He found that as individuals
mature in their understanding of their
own internal worlds, their outlook with the
external world matures as well.
Research suggests that the combination
of normal life experience and biological
maturational processes such as brain
development and hormone development
are very important, but plateau at a
relatively conventional level.
Achieving significant levels of authenticity
are driven not by external life experience
The authenticity literature has
its conceptual roots in philosophy,
humanistic psychology and
positivepsychology.Twoimportant
elements need to be highlighted
from this body of work. First, while
frameworks and policies are, of
course, important, what gets done
in organisations is something that
is decided upon by managers –
thus by individuals in the actual
organisation. This means that
corporate authenticity can only be
built by developing a whole host of
individuals who embody
a holistic perspective. Secondly,
authentic leadership or steward
leadership means placing
community and society ahead
of the self. This is philosophically
the exact opposite of so much of
Western economic philosophy,whichputs
the pursuit of enlightened self-interest
front and centre.
At a granular level, many factors that
support authenticity and a sustainable
perspective are inherently human. In
another Ashridge study, this time of 210
MBA students who were asked to write
about authenticity from their own
experience, self-knowledge and
reflection emerged as key. It appears that
we simply know what the right thing to do
is when we think about it. Respondents
spontaneously identified confidence,
compassion and trust, and openness
and honesty as the preferred approach
to the ethical situations in which they
find themselves.
But the flipside of this simple recognition
of the right thing is the tendency to
‘conform to the expectation of others’.
Other significant stumbling blocks
included the pursuit of material wealth,
fear, and the influence of organisations
and of the workplace. As individuals we
seem to think the right thoughts and want
to make the ethical decisions, but the
workplace and the social environment of
the organisation can be the primary
blocks to authenticity.

19. 35
DIRECTIONS 2013 SALTERBAXTER
CREDIBILITY
Aligned strategy: is your
sustainability strategy fully
integrated into your business
strategy? Do you publish an
integrated annual report,
and/or make direct reference
to sustainability commitments
within your core company
profile, to underline that
impression?
Clear purpose: does your
sustainability strategy have a
clear social purpose? Do
short- and long-term targets
support the strategy? Do you
refer back to your overall
purpose and vision across all
platforms?
TRANSPARENCY
Credible targets: do you set
out detailed targets for
delivering your sustainability
promises? Do you simply state
performance or do you
evaluate your achievements
against previous targets?
Tangible action: do you set
out a convincing action plan
for achieving the targets
you have set?
HOW
AUTHENTIC
AREYOU?With increasingly complex value chains, growing pressure on
resources and shifting stakeholder expectations, it may not even be
clear what the right thing is from day to day. But some companies
seem to navigate the difficult waters of authenticity with relative
ease. To us, they do so by focusing on five key dimensions of both
action and communication. But how does your business check out?
OPENNESS
Open leadership: is
sustainability being driven at
different levels of your
company? Do your reports and
online communications carry
the voices of employees
explaining how your
sustainability strategy is
part of their job, not just
something for a CEO or
presidential statement?
Engagement with
stakeholders: does
stakeholder engagement
come across as a priority? Are
there detailed examples of
stakeholder engagement
given? Do you give evidence of
how you’ve responded to
issues raised?
CONSISTENCY
Open conversation: are you
using different media to reach
out and share objectives
and aims, experiences
and achievements?
Aligned statements: is there a
consistent message across all
platforms? Are the same
themes prioritised in your
sustainability report, online, in
social media and in your
thought leadership activity?
UNIQUENESS
Defined ambition: is your
stated aim unique,
memorable, compelling? Is
your aim to lead on a specific
issue? Do the commitments
you set out and your
performance make
a unique contribution?
Beyond reporting: reporting
helpstrackperformance.But
areyouhelpingtosetthe
futureagendaaroundyour
socialpurposebydeveloping
thoughtleadership?Areyou
campaigningorraising
awarenessofspecificissues,
collaboratingwithNGOsor
academicstoadvancethinking
ontheissuesatstake?
No company is getting all this
right, all the time, and as
Directions 13 has explored,
some of the companies that
lead the world on
sustainability still have some
authenticity blind spots. But
we believe more focus on the
hallmarks of authenticity can
help any company manage its
real and reputational risk,
improve its relationship with
stakeholders, employees
and consumers, and
ultimately position it for
commercial success.
To learn more about
being authentic, visit
salterbaxter.com
34

20. DIRECTIONS 2013 SALTERBAXTER
36
Our clients include:
Absolut
adidas Group
Allianz
Anglo American
ArcelorMittal
BP
BSkyB
BUPA
C&A
Coca-Cola Enterprises
DMGT
De Beers
Friesland Campina
GlaxoSmithKline
Harrods
Interface
Laing O’Rourke
L’Oréal
LEGO Group
Maersk Group
Marks & Spencer
Mondelez International
Morrisons
Nokia
O2 / Telefónica
Philips
Reckitt Benckiser
RSA
Standard Chartered
Toyota Europe
About us:
Salterbaxter works where business
strategy, sustainability and creative
communications meet, creating
strategies and stories for some of the
world’s leading businesses and brands.
We help business perform better,
communicate better and deliver better
long-term outcomes. We call this
Ideas for Better Business.
Contact us:
Jeff Sutton
Director of Business Development
jsutton@salterbaxter.com
Tel +44 (0)20 7229 5720
salterbaxter.com
@salterbaxter
Salterbaxter
The Dome, Level 4 Whiteleys Centre
151 Queensway
London W2 4YN
Tel +44 (0)20 7229 5720
Salterbaxter Nordic Aps
Havnegade 39
1058 København K
Tel +45 33 43 63 76
2001
Trends in CSR
reporting
2007
Cutting through
the noise of
the climate
change debate
2003
Trends in CSR
reporting
2009
Mapping the
landscape of
European CR
2006
Is CR in
your blood?
2004
Trends in CSR
reporting
2005
Best in show of
this year’s crop
2002
Trends in CSR
reporting
2008
Sustainability
gets tough
2012
Profits from
purpose
2011
Opportunity in
the new age of
uncertainty
2010
The Innovation
Edition
About Directions
Directions is in its thirteenth year. It is
widely viewed as the leading annual
publication on trends in sustainability and
communications. Salterbaxter also
produces regular Directions supplements
on key topics throughout the year.
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