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Why Adidas Earns Top Marks for Reputation

Adidas cracked the top 10 on a list of the world’s most reputable companies, which saw ESG play a larger role in how corporates protect and promote their brands amid a Covid-wracked year.

The German athleticwear titan, which exited the Dow Jones Sustainability Index last year, nabbed the No. 7 position on the 2021 Global RepTrak 100 list, beating out staunch rival Nike (No. 22) and earning the highest spot of any fashion purveyor. The Three Stripes company has taken meaningful steps to accelerate its use of sustainable materials, most notably with Parley for the Oceans, and has laid out a strategy to diversify its ranks, issues that have surged in importance over the past year.

Denim giant Levi Strauss landed at No. 14, while Under Armour (No. 45) made the top 100 for the first time, as did luxury leaders like Chanel (No. 33), Burberry (No. 83), Prada (No. 84) and Hermès (No. 88). Ralph Lauren, which has invested in a raft of eco-friendly and sustainable initiatives, came in at No. 91.

The Lego Group retained its No. 1 ranking from last year’s list, which encompassed several industry players, from Rolex (No. 2), Harley Davidson (No. 5) and Giorgio Armani (No. 61) to LVMH (No. 63) and newcomer Costco (No. 78). Walt Disney, which is closing dozens of stores and furloughed more than 100,000 workers during the pandemic, received the No. 8 spot. Overall, the consumer durables and apparel group earned the highest average sector score at 74.9, edging out tech hardware players at 74.1. Companies in the retailing sector, however, came in 11th out of 13 total sectors, scoring an average of 71.4.

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According to RepTrak, which ranks companies generating at least $2 billion from 0 to 100 based on perceptions of their products and services, innovation, citizenship, performance, governance, leadership and workplace, getting into the top 100 is harder than ever—and staying there is, too.

“Several companies that made the Global RepTrak 100 in 2020 achieved similar scores this year, but due to this increased competition, they saw drops in their ranking relative to last year,” the study showed. “What was considered ‘good’ in 2020 is only ‘average’ in 2021, so companies looking to leverage their reputation as a competitive advantage need to up their game, and they need to do it quickly. More than anything, this year has shown that companies must seize these pivotal moments—these times of high uncertainty—to demonstrate leadership and forge ahead.”

What’s more, the results illustrate how some companies were able to leverage “unexpected events and simmering issues” during Covid-19 as new sources of opportunity, RepTrak said. Plus, the newcomer apparel and retail honorees saw their scores surge five to 10 points above the firms they displaced, underscoring the work they’ve put it to earn their reputations.

“Even companies with established reputation strategies are at risk of losing ground due to seismic events or disruptive companies entering their space. Just because something has worked in the past is no guarantee it will work in the present,” RepTrak said. “In fact, younger and younger generations are expecting more from business leaders. As we see in this year’s data, companies had to do more just to maintain their ranking. Staying the same was equivalent to falling behind.”

Overall, the average score came in at nearly 75, the highest in 11 years, according to RepTrak, which noted that many of the top-ranking firms have embedded environmental, social and corporate governance, or ESG, policies into their global strategies.

“ESG is being used for the first time this year as a measurable component of reputation, and we can see firsthand why this is so important for 2021 and beyond,” RepTrak CEO Kylie Wright-Ford said in a statement, noting the “strong correlation” between corporates with “high standards” and a lofty perch atop the 2021 list.

“Stakeholders have access to more information than ever before, which is empowering them to make more informed decisions,” Wright-Ford added. “Companies must not only deliver a quality product, but also show that they are doing so in an ethical and globally considerate way.”

According to RepTrak, which evaluates firms with 20 percent or higher familiarity in the 15 countries under consideration, corporate reputations can influence purchasing behaviors. ESG emerged as a significant influencer for the covetable millennial and Gen Z cohort, whose 18- to 24-year-olds gave corporations “average” marks for their lackluster attempts to act as responsible stewards of the environment. This could be because companies tout their new initiatives but do little in the way of follow up, leaving the public largely in the dark about their true impact, RepTrak said, suggesting companies burnish their sustainable communiques.

During a year defined by Covid-19, many companies rejiggered their operations for workers, whether essential, remote, reporting to a workplace or unable to attend to their duties—to varying degrees of success. As such, RepTrak’s data “shows that companies still have a way to go when it comes to demonstrating concern for the health and well-being of their employees,” a finding it says “holds true across age groups.”

RepTrak advised companies striving to right any missteps on the workforce front to “clearly articulate key policies and procedures and also prioritize empathetic and personalized communications.”