Corporate Governance | Brand Scandals

Are brand owners cleaning up their act or just their appearance?

Brand owners don't care about the environment or social issues. The only thing that matters is the bottomline. Sorry to be so negative and cynical but it's the truth.

Joseph McMullen, Teacher - March 9, 2001

Even though I've never been able to forgive Exxon for the oil spill (and I haven't stopped at an Exxon once since!), I know that I'm being selective in my activism. There are many other brands that have encountered similar disasters but for some reason, this one stuck with me. The Exxon name was easy to remember. If a brand that was not as well known as Exxon had been responsible for the spill, I don't think it would have had such a great impact on me. I guess what I'm saying is that we all know brand-owner's environmental and social ethics are a front but that well known brands are absolutely held more accountable by the public.

Tara Reilly, Program Manager - March 9, 2001

To say that ALL companies use corpoarate responsibility as a front is an insult to people working in corporations that are committed to making a difference. I would like to make 3 points. Firstly, large annual profits does NOT automatically imply a disregard for the environment or society. Financial success can be compatible with social and environemental responsibility. Shareholder value is increasingly being influenced by the ability to be sustainable both now and in the future. Secondly, the behaviour of large corporations should not be generalised. Each have their own values and will behave differently. Thirdly, actions are the true test for what a company stands for. Brand owners that truly believe in social and environmental ethics overtime will be able to position themselves in the hearts and minds of consumers. This is not due to any ‘greenwashing’ but based upon a reputation built upon actions over time. Actions reflect the values of a company and its culture – what employees live and breathe. Stop making generalisations about large global companies. Judge companies individually on their actions and stop using their financial success as an indication of how ethical they are. Thanks.

Rhonda Liu, Marketing Strategist - March 11, 2001

Counter to Joseph McMullen's viewpoint, I believe the future bottom line of large - and small - businesses will be decided upon by the consumers ability to vote with their feet and their money. A smart brand with attributes of environmental and social concern will maintain and build loyalty with their audience. Public conscience will become the hardest brand value for money hungry corporations to achieve. I believe the successful future business will achieve a strong bottom line through smart branding.

Mark Halton, Senior Designer, Banner Corporation - March 13, 2001

I think most large corporations are waking up to the need to be more broadly accountable, but what they're putting back (in terms of charitable ventures, recycling etc) is still only a drop in the ocean. But I don't think we can blame corporations, when, frankly, most of us don't take enough action in our personal lives either. Extracting and transporting oil, for example, is a risky business and if we want to drive cars and have central heating we're all party to it.

Glenda Tibbell, Student Sustainable Development - March 13, 2001

The companies cited by the article were reacting to accidents or accusations that could not possibly be anticipated by brand initiatives. What if Exxon had been donating to "The Wildlife Fund" as part of their brand program before the infamous disaster? Would they have been spared the fines and the brand shattering publicity? Not when you see the video clips of birds struggling to move under oil saturated feathers. This compelling image condemned them and threw their brand image into crisis. We don't remember that they paid over a billion dollars in reparations. That should have bought their brand loads of eco-friendly credibility. But it didn't.

Speaking of how brands suffer from notorious accidents, I'm reminded of how USAir changed its name to U.S. Airways after a tragic crash blighted their name and reputation. ValueJet did the same. I'd venture to say it's now standard practice. They made the smart choice to rebrand their identity (though some of U.S. Airways' baggage trailers still bear USAir logos). They remain functionally the same company (I'm guessing), but they couldn't stand for "safety" after such traumatic evidence to the contrary. Why didn't Exxon rebrand? They might have been able to keep Tara's business and make the Valdez the debacle of a deservedly defunct brand.

Brian Gibbs, VP of Hindsight, 20/20 Corporation - March 14, 2001

Brand ethics have traditionally been "hot air," flimsy attempts to assuage consumer worries before sales go down. Take Phillip Morris or any of the other tobacco companies back in the day: all those scientific commercials, "no irritation to essential organs," etc. (See Moore's US and British TV series - TV Nation, and/or The Awful Truth for more on these and other corporate ethical disasters.) Especially with G.W. Bush in office, it is true that big players in energy can lobby to change policies. There's an article in Salon.com today about how Bush reneged on his promises to reduce C02 emissions. He was either supposed to pass a bill, or help Christine Todd Whitman (his EPA chief) get a bill passed that requires energy and utilities companies, and other polluters to have to reduce their CO2 output. (CO2 contributes to global warming.) With VP Cheney pandering to the right-wing energy interest, Bush proved himself a liar. I agree with "POINT" brand ethics is a joke. Brands only care about profit. When the profit is in danger, they may effect changes that appear to be about social good. That's why you have to make your consumer voices heard! Use your wallet and your e-mail account. Use forums like this one. Get into focus groups if you can. If they hear that we want environmentally responsible power, and we want energy companies to leave habitat alone, they just might do it. (Thanks Interbrand for this thoughtful topic.)

Lora Kolodny, Sr. Copywriter, Luminant Worldwide - March 15, 2001

We must require companies to account for more that their financial bottom line and publish reports on social and environmental capital expenditure as well, triple bottom line theory. Risks such as oil spills must be acknowledged up front and be a part of the insurance package for the company, just like the tanker itself. If the risk is too great then the insurance will be prohibitive. Brand owners must become closer to the critical decisions of the business, so that brand is integral to the business values and activities, rather than one of many company products. Nike fell fowl of seeing their brand as something above and beyond their more mundane shoe production activities. If the brand was closer to the values of the business then it would audit the business activity in relation to brand values.

Ben Reason, Art Director, Oyster Partners - March 27, 2001

I'll take issue with Mr. McMullen's comment. While there are certainly brand managers lacking social conscience and responsibility, a blanket accusation is unfair to those of us who believe that our reach as brand managers provides us with avenues to improve social conditions, such as in education, technology, or medicine.

Hewlett, founder of HP, said that your profit is only a measure of your contribution to society, not an end to your business mission. I keep that in mind when developing and promoting a new product. In other words, when I take my socks off at night, I want to think about who I helped that day, not who I exploited.

Jim O'Neill, Marketing Manager - April 6, 2001

Brand owners do care about the environment and social issues if it concerns their image and therefore their profits. No “good” business would be concerned with environmental and social issues if it loses money, we are afterall in the business of making money. It is up to the consumers in some ways, to direct these corporations into the “green” image. When consumers begin to differentiate that they prefer a product over another because they are “environmentally-friendly”, regardless of the price, then the company has succeed in their branding, and therefore increase their profit, and therefore do more events to promote their environmental and social issues. It’s a cycle, if that is what the consumer wants, then it will happen.

Sometimes, we are too attached to one specific piece of news, and forget what we really want. For example, sweatshops, there are always two sides in an argument. Most people know one side already. The other side is in defense of these “cheap labors”, who could be unemployed, and die of malnutrition because there is no other source of income. I am not trying to justify actions of corporations, but the fact remains that not the whole world is like the US, people are living in conditions where it is unimaginable to the consumers. What do we want? Do we want these people to live in better conditions, and we, as consumers, are willing to pay for it? Do we want to put all our blame on big corporations?

Wei Ling Chao, Memphis, TN - April 6, 2001

Social and environmental issues should not be categorized as ethical issues for brand owners; more productively these issues should be categorized as outlets for communication like television or radio - look at what Nike did by branding inter-city basketball. For the price of a print ad, a brand owner could build a little league baseball park in Yankton, SD. For the price of a television spot they could build a homeless shelter in Elizabeth, NJ. Brand owners are guilty of missing opportunity. The missed opportunity is a chance to gain long-term loyalty with inexpensive communication at the local level. Putting money into a community is tangible, visable, and emotionally binding (if this effort is proactive, not reactive to damage done like Exxon/Valdez). Brand owners that fail to see social issue as a means of brand communication are practicing poor marketing, not poor ethics.

Clayton, Account Planner - April 6, 2001

Take a look at the tobacco industry if you want to see a negative brand fast talking its way towards respectability. For years they fought tooth and nail in the courts about how they weren't responsible for cancer causing carcinigens in cigarette smoke. Now they have agreed to a multi billion dollar settlement on that very issue. They have agreed to a ban on advertising yet we see their names on tv all the time. Selling cig's? ---Nooo. they are selling a message about how wonderful they are. Bottomline on branding with all who engage in it is P R O F I T S. if you don't have it advertising may get it for you. Most consumers are smart enough to see through the glitz of it and those that aren't---who cares???

jay w andrews, truckdriver, mclane distribution - April 6, 2001

Brands are promises made and kept. They are made to the individual, society as a whole and even to the environment. If you don't keep your promise to the environment or society how can I expect you to keep your promise to me. I don't buy brands that don't keep their promises.

Anonymous - April 7, 2001

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