Sustainability, emerging as defining factor for great brands
Brand Finance, the world’s leading brand valuation consultancy, released its annual 2023 report on the world’s 500 most valuable brands at Davos recently. It is a well researched report. Here are some facts and insights that stood out for me.
Global top 10 brands
The top brands, both globally and in India, were not much of a surprise. Amazon is the world’s most valuable brand, reclaiming that position from Apple, which held top spot last year but has now fallen to Rank No. 2. Tata continues to occupy the top slot in India. These top ranked brands have demonstrated rapid growth even as they have stayed true to their core purpose.
Apart from Amazon and Apple, other brands in the global top 10 include Google, Microsoft, Walmart, Samsung, ICBC of China, Verizon, Tesla and Tik Tok. Tech brands dominate this top list like last year. Clearly, brands that have leveraged technology to offer great value to consumers have also added great value to themselves. Brands from the US continue to lead the pack, but Chinese brands are not far behind.
Sustainability stands out
The most significant trend that stood out for me in this year’s report was the growing focus on sustainability amongst great brands worldwide. The importance of doing good to the planet and the community is even more emphatically visible than ever. While Amazon has reinforced its leadership in online retail and online cloud computing services, it has also become the world’s largest corporate purchaser of renewable energy. Its website states that “it is on a path to powering operations with 100 per cent renewable energy by 2025”. It also claims to have reduced per-shipment packaging weight by 38 per cent since 2015, eliminating more than 1.5 million tons of packaging. This is impressive progress for a brand and category that not many people associate with sustainability.
What the giants Apple and Google do
Similarly, Apple has doubled down on its sustainability commitments, by announcing its goal of creating carbon neutral products by 2030, and also working towards reducing the adverse environmental impact of its products. In addition, the report highlights the pioneering work that Apple has done in protecting customer privacy and security, including introduction of new security measures and end-to-end encryption of iCloud storage, to reduce the risk of unauthorised information access and theft. This resonated with me personally, because Apple’s consistent commitment to customer privacy was one of the key reasons why I shifted from an Android phone to an Apple iPhone.
Google, the world’s third most valuable brand, has launched many relevant new products (such as Google Wallet and Google Cloud) but has also simultaneously accelerated its initiatives to mitigate climate change. One of these projects revolves around climate-conscious data centre cooling. Google is working with the objective of operating entirely on carbon free energy by 2030. The brand is thus forging ahead on two different axes which are important to its stakeholders – technological capability and commitment to sustainability.
EV brands race ahead
Yet another striking illustration of the importance of sustainability is the rapid rise in value of electric vehicle brands, as consumers gravitate towards EVs which are perceived as being far better for the planet than conventional cars with internal combustion engines. In fact, the fastest growing brand in this year’s Brand Finance report is BYD, an electric vehicle brand which is growing fast in the world’s biggest EV market, China. Its brand value has grown 57 per cent in a single year, and now stands at US$10.1 billion.
Tesla, the world’s best known electric vehicles brand, has also grown its brand value by a handsome 44 per cent compared to last year. The brand is now valued at $66.2 billion and ranked as the ninth most valuable brand in the world. The Brand Finance report also points out that Tesla continues to be seen as a very innovative and sustainable brand, notwithstanding all the recent headlines centred around its maverick CEO, Elon Musk. Clearly, the combination of technology, sustainability and cool have provided Tesla a strong foundation.
In conclusion, the Brand Finance report serves to emphasise how important sustainability has become in the construct of brands that aspire to greatness. Sustainability influences consumer choice and it drives brand value.