Businesses that score above average on environmental performance are outcompeting their peers in terms of financial performance by up to 6%, according to a new report issued by purposed-focused creative consultancy Revolt.  

The report also found that perceptions of environmental action account for a significant share of the reputational advantage held by market leaders.     

The study, titled The Cost of Silence, analyzed over 500 public companies across 16 industries, using three years of global data. By combining environmental performance indicators, financial data and AI-driven reputation analysis, the study highlights two key findings showing that sustainability and business performance are linked:   

The research shows that certain environmental issues consistently shape how leading brands are perceived, regardless of sector. The biggest drivers of reputation accounting for the gap between leading businesses and the average are:  

The issues that matter most from a business performance perspective vary by industry. In most sectors, there are one or two key environmental priorities that, when addressed, deliver the greatest financial returns. For example:   

The findings also highlight what the report calls the “significant risk” for businesses that fail to communicate their environmental efforts. Financial performance peaks when a company’s actions and communications are aligned. However, less than a quarter (21%) of companies communicate effectively when it comes to their environmental performance, with over three quarters (79%) risking undermining trust by either “greenwashing” (overstating efforts) or “greenhushing” (staying silent on the environment).   

Kirsten Flanik, CEO of Revolt North America, said: “ESG (environmental, social and governance) has increasingly been drawn into the so-called culture wars, and it’s understandable that many business leaders feel less comfortable engaging on the issue. But the data shows there is a clear financial and reputational benefit to doing so. A 6% increase in operational earnings is not something any business can afford to ignore, especially in today’s climate.”   

Most companies risk leaving money on the table by failing to communicate actions they take related to the environment, added Flanik. “The fear of the consequence of speaking out must be measured against the cost to your reputation of saying nothing. Companies need to focus on the issues that shape reputation, reframe how they communicate them, and get back out there to maintain trust, re-engage customers and show stakeholders they’re equipped to handle the risks and opportunities ahead.”  

The agency, part of Anthesis Group, partnered on the report with MAHA Global, an AI-driven SaaS platform that helps companies track and predict corporate reputation and business outcomes.  

MAHA’s platform collects data to assess over 200 variables contributing to environmental performance by aggregating data from websites and other publicly available sources like SEC filings and other materials. Financial performance data is gleaned largely from corporate annual reports. Environmental perceptions are determined by the firm’s proprietary sentiment analysis based on data collected from online sources including social media. Reputation metrics are aggregated from nearly two dozen public indices including BrandZ, Fortune and Interbrand.   

The full report can be found here.