Evidence Behind Communicating Circular Economy and Sustainability Initiatives Effectively

November 5, 2018
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Director, Research and Issue Networks

In partnership with IBM, over the past three years CCC has conducted an analysis of how a company’s corporate social responsibility (CSR) efforts are viewed by users of social media. By conducting a textual analysis of how individuals speak about a company’s CSR work, particularly in relation to their general business practices, we have been able to analyze what sorts of CSR projects have the most impact on a company’s brand.

Each year, IBM and CCC analyze roughly 700,000 total mentions of 30 different companies on social media. We then track whether those snippets have anything to do with a company’s community outreach, by building dictionaries that can determine if a mention is about a company’s work in either sustainability and the circular economy, economic empowerment, disaster response, community health, philanthropy, or education.

The textual analysis tools that IBM uses can determine whether those snippets are positive, negative, or neutral. We are then able to sort which companies and which types of CSR activities elicit what type of response from social media users. A vast majority, more than 90%, of these snippets do not come from company-based URLs, and none are advertisements, so we are not looking at how companies present their own work, but how consumers are talking about them.

By analyzing 30 companies over that time frame across six different CSR initiatives (sustainability and the circular economy, economic empowerment, disaster response, community health, philanthropy, and education) we have consistently found that out of these major CSR themes, sustainability and the circular economy has the most volatile impact, both positive and negative, on a company’s brand.

The reasons for that are varied. Across all the six initiatives we’ve tracked, a company tends to do comparatively worse in areas that are within their business focus. For example, health companies tend not to get as large of a lift as other companies when engaging in community health efforts. Based on some of the responses we’ve seen in social media, most consumers believe that community work of their type is their responsibility anyway. Of course, almost every company has some type of environmental footprint, so consumers might have higher standards for what a company should be doing in the circular economy and sustainability space.

Especially for companies in the manufacturing industry that are not consumer facing, communicating about a company’s work in sustainability and the circular economy, either inside or outside the auspices of a CSR activity, tends to have more negative consumer responses than any other type of activity we’ve tracked over the past three years.

Some of this can be attributed to companies being called out for “greenwashing.” Consumers who already have a negative view of a company because of its perceived environmental impact are likely to point out what they see as hypocrisy regardless of support to the contrary. This holds even if the sustainability and circular economy work is seen as unrelated to a perceived negative impact the company has on the environment—for example, a company that has high water usage but installs solar panels doesn’t see great returns on that announcement.

But greenwashing is not the entire reason that efforts in sustainability and the circular economy are challenging for companies to communicate. Unlike most other initiatives in the CSR or corporate citizenship space, engaging in circular economy and sustainability efforts almost always requires a strong mix of internal and external efforts. When efforts are internal, such as reducing greenhouse gas emissions, sending less waste to landfill, or repurposing materials, it complicates what parts of a project are public facing, how they are audited, and how the audience can be educated.

In spite of the challenges to presenting these initiatives, talking about a company’s work in sustainability and the circular economy is not always a bad idea. There are ways for companies to encourage a more positive response to their work in the sustainability and circular economy space.

One of these is to promote and use goals for either sustainability or circular economy initiatives and hold onto them. While we did not have enough sources to track this outcome statistically, we saw that announcements of actual goals and then proof of meeting them tended to be more “viral” and more positive. It also allows for a variety of storytelling for consumers to react to, from hard quantitative discussion to broader qualitative analysis.

Another way is working in areas outside of the company’s main thread of business. For circular economy efforts, this may be difficult at the outset, but it is possible to frame a successful circular economy initiative as external. Showing the broader and long-term impacts of buying, selling, using, or donating manufacturing byproducts can elevate a conversation to look beyond a company’s physical footprint.

In this year’s forthcoming work, we were able to conduct a different level of analysis due to IBM’s improvements in how the analysis is conducted. Now, in addition to whether or not a mention was negative, positive, or neutral, we could also tell how strongly negative or positive it was, and how the sentiment of the individual snippet compared with the rest of the document or page.

What we found confirmed what we saw over the past three years. Sustainability and circular economy CSR efforts tended to be seen more negatively than other efforts. However, this new analysis showed that, compared with the page or document it was presented on, the corporate effort tended to be seen more positively than the surrounding material. The following table shows the average difference score of each CSR initiative type, from 1.000 (completely positive) to -1.000 (completely negative); the average score of each document that snippet came from; and the difference:

Sustainability and Circular Economy

Snippet Score

-0.013

Document Score

-0.029

Difference in Positivity

0.016

This means that even though individual snippets about a company’s CSR engagements may not be viewed positively, in the contexts in which they are presented, they outperform the surrounding chatter a majority of the time. In a subject area like sustainability and the circular economy, which had the second lowest document score ahead of disaster response, general conversations are often tagged as negative because users and commenters are concerned about the long-term health of the environment. Even in these contexts, when company work is talked about, it stands out in a comparatively positive light.

What we have found is that to gain more positive traction on corporate sustainability and circular economy activity, whether it is housed as a CSR initiative or not, is to make sure that there is a complete story around it. By presenting materials that offer a more complete evolution, with proof points and evidence of how the company is extending its presence in a positive and preemptive way, companies can grow the level of impact and sentiment they have in social media.