Opinion: Are there any real repercussions for false promises?

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TODAY, the bare minimum that consumers, employees and stakeholders expect from businesses and organisations extend far beyond the expectations of the past, writes Sadhbh Sullivan. We don’t just want sustainability, diversity, equity, inclusion and positive working conditions, we demand it. With that comes a lot of pressure to perform well in all aspects of business, so many set targets for the changes they need to make to reach society’s standards. What happens when organisation’s fail to deliver a brighter future? 

Regardless of the changes an organisation is attempting to implement, the general consensus is that many of the programmes designed for implementing change are based on the business of the past or the ambitions for the future rather than the organisation’s current state. For example, diversity and inclusion programmes based on tools that worked in the sixties and projections based on wild ambitions that appease consumers. It seems as though most spend the majority of their time and resources investing in how society views the changes they promise to make rather than the change itself, creating a future that looks very similar to the current day. What does it really mean when organisations don’t deliver on their promises of change? 

Diversity and inclusion

From a diversity and inclusion point of view, society’s marginalised have long been fighting for a voice in the boardroom. It’s no secret that diverse and inclusive teams create better business results, so why is it so difficult to build a C-suite that isn’t just male, pale and stale? 

According to Frank Dobbin and Alexandra Kalev in an August 2016 article from the Harvard Business Review, the answer is somewhat simple. Organisations focus on reducing bias using the same tools and programmes they’ve used since the 1960s. Ironically, those systems designed to create a more inclusive workforce typically do the complete opposite. In fact, in terms of gender diversity, the analysis of 829 firms over three decades has shown that existing tools have actually decreased the proportion of women and minorities in management. 

Instead, tools that promise inclusion are actually designed to preempt lawsuits by policing the actions and decisions of leaders. Organisations who lack transparency across diversity and inclusion are less likely to make more ethical decisions, while those who publish discrepancies are forced to hold themselves accountable as the public scrutinises their every move.

What happens when organisations make diversity and inclusion promises they can’t keep? This is not an uncommon problem across organisations. In fact, when a lack of accountability, focus or intent to change, or poor measures for tracking performance prevail, organisations are likely to make promises they just can’t keep. When organisations fail to even share their progress, it’s difficult to expect the public to shun them into change, so any real change is very unlikely. 

To even begin to make a real difference, governments must consider evaluating how they expect companies to report on their promises. Even reporting on a lack of improvement drives accountability, willingness to change and transparency to the public about the organisations they are supporting. 

ESG 

When it comes to delivering on ESG promises, the same appears to be true. In fact, according to a 2017 report by Bain and Company, only 2 per cent of organisations achieve or exceed their corporate sustainability goals to begin with. Despite many of our favourite brands opting for ethical and sustainable production and packaging, this figure seems unsurprisingly shocking as consumers continue to buy-in to products and services which disguise themselves in promises of changing the world. 

What sets organisations back to begin with? According to the Environmental and Energy Leader, a lack of resources and competing priorities are amongst the top obstacles that employees say threaten to derail sustainability programmes. 

It’s not uncommon for organisations to favour profit over greener solutions, but false promises of better futures to consumers seems entirely unethical. The most common approach organisations take to disguising their lack of commitment to sustainability goals is greenwashing. 

Although consumers are constantly bombarded by eco-friendly messaging from businesses bidding to raise profit from their environmental concern, it seems as though this concern isn’t even real to begin with. In fact, research conducted in Europe suggests that 42 per cent of green claims were either exaggerated, false, or deceptive.

The repercussion for this is again somewhat disappointing. While greenwashing may bring with it an amount of reputational damage, according to Ioannis Ioannou, George Kassinis, and Giorgos Papagiannakis, in an article for the Harvard Business Review, a company’s reputation for innovation or product quality may mitigate some part of this reputational damage. While some organisations may suffer at the hands of their own policies, others are destined to survive amidst their strong reputation.

Working conditions 

When we consider working conditions, it seems as though we all, as a society, should really care about how businesses treat their people. After all, the majority of us spend most of our time working, so we can relate to the need for a positive and productive work environment.

This element of business seems to play a greater role in a person’s willingness to support an organisation. According to a report by Edelman, 29 per cent of people say that how a company treats its employees is the most important factor in deciding to become a loyal customer, while 27 per cent say that how a company treats employees is their primary factor in choosing whether to try a brand in the first place. 

Do these figures really check out in reality? To me, this seems unclear, with some of the world’s most popular and beloved brands being built on the exploitation of others. 

The reality

False claims and promises made by organisations shouldn’t be entirely surprising to us as consumers. Although deceptive in many ways, the repercussions organisations face as a result of their false promises largely varies depending on whatever trust they held to begin with, and the extent of the promises made. 

For some, it’s easy to maintain a positive reputation amidst a crisis created entirely internally, while others might struggle to regain support. As consumers, it’s important to exercise caution when it comes to believing in the figures of the future. Instead, individuals should focus on what they already know about the organisation’s successes and shortcomings to make real, informed decisions. 

Sadhbh Sullivan is content manager at Fresh Strategy in Zurich. Originally from Ireland, she has experience in the public relations and digital media industries. An award-winning writer and blogger, she is a successful recipient of university and national awards for academic achievement, website and social media platforms and entrepreneurialism.