When the firm is perceived as being genuinely eco-friendly by the media

When companies announce their environmental policies, they can only garner favorable media coverage if their narrative carefully articulates signals of compliance (actions intended to comply with existing standards) and excellence (the adoption of recognized uncommon behavior).

A paper by Anne Jacquemenet of Bocconi’s Department of Management and Technology, Emanuele Pettinazzi of USI (University della Svizzera Italiana, Switzerland), Kersten Neumann of the University of Innsbruck, and Peter Snoren of the University of Amsterdam proposes a framework that seeks to explain the combinations of cues that can generate positive coverage and which Fail it.

In the background of how companies communicate their environmental policies lies what might be described as a trade-off, or at least some tension, between conformity and excellence. This tension reflects the fact that companies struggle to describe themselves as “conforming” and “distinctive” at the same time.

Therefore, balancing these two characteristics is essential to be seen by the media as convincingly committed to environmentally sound policies, but can also prove to be quite challenging. The authors identified three different types of signals on a scale of increasing validity that indicate agreement and three types that indicate distinctiveness.

The previous group (signals of conformity) includes donations, associations, and testimonials. The latter (signals of distinction) include transformational actions (i.e., changes to products, processes, and structures intended to reduce a company’s environmental footprint), business-to-business partnerships, and ratings. Its diversity of credibility is a result of its nature: the first and least credible element in each group is generated by the company itself, the second by association with other actors and the third and most credible is provided by outside parties.

Given that the media naturally sees such cues in combination with each other rather than separately, Jacqueminet and her colleagues wanted to understand which of these combinations were most likely to elicit positive reactions in media coverage. By processing data on electric utilities between 2008 and 2013 and more than 11,000 articles that looked at their environmental initiatives, the authors identified three main favorable patterns.

Matching signals are companies that display their environmental behavior in a consistent manner (i.e. matching or distinctive) around a highly credible signal; “Balance signals” associate a highly credible signal of conformity (attestation) with less credible signals of excellence (such as transformative actions) or vice versa; and “jamming signals” that use a range of less credible signals for both matching and differentiation and can only hope to get positive media coverage for a limited time.

All other combinations, it seems, are either too unconvincing or too confusing and inconsistent to attract admiration in the media.

“We see that the presence or absence of highly credible third-party signals within signal groups determines the way the media perceives the inconsistency and, therefore, the way they react to the level of conformity versus differentiation represented by signal groups,” Anne Jacqueminet explains.

“Highly credible third-party signals seem to play a complex role in media assessments of environmental companies’ behavior. They are, from a company’s perspective, a double-edged sword with regard to the outcome of media coverage, as their mere presence does not guarantee the positive media assessment that some might expect.”

“The main issue is whether third-party signals are conveying one identical message. If this is not the case, and the media encounters a mixture of highly reliable signals with opposite messages of excellence and conformity, they are not giving positive coverage.”

The work was published in Academy of Management Journal.