Is everything ‘brand news?’ What steps must you take to protect your company’s hard earned reputation?

Retail Financial Services

Retail Financial Services

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Moderator:  Colette Dunn - Milliman

Expert:  Sacha Sadan - Legal & General Investment Management

Sacha introduced the concept of ESG (environment, social and governance) and how it relates directly to the bottom line. It is not about ethics. It is about factors that are material to a particular company. We discussed the example of Sports Direct where there have been failures with tax payments, minimum wage policies and, outside the UK, a role in the deaths of 1,400 low paid workers. Not only have the failures in ESG in Sports Direct led to a media and customer backlash, its bottom line has also been significantly affected.

Organisations represented in the working session had a similar approach to ESG with formal structures in place for dealing with its implementation and management. Some said that all senior managers had elements of ESG, such as increasing sustainability, in their objectives. Smaller organisations had to work harder at ESG due to fewer resources. However, some of the small, start up brands in the session felt they ‘flew under the radar’ to some extent, although they were all keenly pursuing good ESG policies.

Most of the organisations represented in the working session had established partnerships and due diligence in selecting partners was vigorous. Brand association with partners needed to be closely managed. One of the benefits to larger organisations was the removal of emotion from the process of partnership selection. Often different parts of the business selected partners, ran the partnership process and implemented the ESG policy. 

It was accepted that, for very large global organisations, there may be something happening in some part of the world which does not measure up in ESG terms. In these cases, it is important that the global organisation can demonstrate that steps are being taken to remedy the situation. The view was that this would not exclude them as a potential partner. 

One of the most fundamental themes in partner selection, to ensure a good brand experience, was the cultural fit. Everyone admitted that there was an element of ‘gut feel’ involved too.

Brand association was good news for larger brands and is of significant value to smaller, newer brands. It was widely agreed that a good disaster recovery plan was needed in case there was a major problem with your own organisation or with a partner brand.