The actions a nation chooses to take (or doesn’t) on topics like climate change, social inequality, and overseeing digital transformation are a key part of what shapes its Soft Power.

Brand Finance’s Global Soft Power Index captures this link with the Sustainable Future pillar, which evaluates nation brands on four key aspects of environmental sustainability: cities and transport, support for global action on climate change, green energy and technologies, and environmental protection.

Once again, we observe a strong correlation between a nation’s performance in the Sustainable Future pillar and its Reputation score, at r=0.90. We also find a correlation of r=0.97 between a nation’s Sustainable Future pillar score and influence in Business and Trade, and a correlation of r=0.92 with strength in International Relations.

Sustainability goes beyond environmental concerns to encompass social and governance factors, too. In total, 12 attributes which contribute to sustainability (Table 1), are responsible for driving 37% of a nation’s Reputation in the 2025 Index according to regression analysis.

Sustainability perceptions leaders

Nordic nations and Western Europe feature heavily in the rankings on sustainability attributes, along with Japan, Canada, the United States, and the United Kingdom (Table 2).

Mapping perceptions against sustainability performance

A strong reputation for sustainability is not always matched by real action. For example, the nations listed above that have the strongest sustainability perceptions have disproportionately high carbon emissions relative to many less economically developed nations. This disparity can create a reputational risk. Conversely, national actions to address sustainability do not always translate into improved perception, which is a missed opportunity to generate Soft Power.

To illustrate this, we have conducted additional analysis using the UN Sustainable Development Goals Index to quantify the divergence between sustainability perceptions and performance. The analysis highlights that many nations are not currently receiving the recognition and Soft Power benefits that they deserve based on their progress against the UN Sustainable Development Goals (SDGs).

Central and Eastern Europe as well as the Caribbean countries outperform public perception in sustainability performance. Among the top 10 are Finland, Cuba, Ukraine, Croatia, Latvia, Slovenia, and Jamaica.

These nations collectively are making strides towards the ideals of the UN SDGs, particularly in social equality, educational attainment, environmental protection, and economic growth, relative to their levels of consumption. Effectively communicating a strong sustainability position presents a significant opportunity to enhance and leverage Soft Power.

Where sustainability performance lags perception, a reputational risk exists. This mismatch is common in the many of the most economically developed nations.

These are among the nations taking the most extensive, formal steps to address sustainability. They actively communicate these efforts and have big platforms to do so.

In addition, they tend to have larger budgets to communicate the natural beauty of their landscapes to promote tourism. This creates very strong sustainability perceptions, yet their high levels of consumption and only limited real progress on environmental SDGs means that perceptions outrun progress, leading to a reputational risk.

The outlook for sustainability and Soft Power

Nations and global businesses attend the annual UN Conference of Parties (COP) in attempt to make joint commitments, share their achievements, and project themselves to the world as key players in international sustainability.

COP29 was hosted in Baku, Azerbaijan in late 2024, and while it had a bold agenda for mobilising finance to developing nations and eliciting voluntary contributions from fossil fuel-producing countries, outcomes were incremental.

Overall, the appetite for productive COPs in the years after the 2015 Paris Agreement seems to have declined, against a backdrop of increased environmental degradation, carbon emissions, and damage to infrastructure and human health from climate change.

This comes as governmental change, most notably in the US, seems to be draining enthusiasm for multilateral cooperation on sustainability.

The United States’ exit from the Paris Agreement is likely to lessen public trust in its accountability and the strength of the agreement for the other signing parties. Similarly, intentions to repeal the Inflation Reduction Act would disincentivize investment into the nation’s renewable energy markets.

In contrast, the EU continues to lead the charge on sustainability data disclosure, carbon emissions trading, and human rights due diligence. Our research underlines the fact that European countries may receive a Soft Power dividend for this continued commitment.

However, as other major nations pull away, will Europe (and many other smaller and island states) sustain their support for sustainability?

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Though much attention is given to national sustainability policies, localized efforts are ultimately what translate legislation into tangible action. Given this, it comes as no surprise that sustainability is an important driver of consideration when deciding to visit, live, work, or study in a city.

Sustainability as a Driver of Consideration

Brand Finance’s latest Global City Index data assesses sustainability themes comprehensively. Environmental sustainability and governance have their own explicit pillars, and for this analysis we combine aspects of the People and Values and Liveability pillars to assess social sustainability.

Sustainability-related drivers of consideration for living in a city are shown in Figure 1. Among environmental attributes, a city’s cleanliness and care for the environment was the top-ranking driver, at 3.8%. On social sustainability attributes, the appeal of a city’s lifestyle was highest, at 3.7%.

Access to healthcare and the affordability of the city were less prominent social attributes, though arguably these factors contribute to an appealing lifestyle.

Altogether, sustainability-related attributes drive 37.2% of consideration to live in a city.

Best-Perceived Cities for Sustainability

The best-perceived cities on sustainability tend to rank highly on more than one pillar across Environmental Sustainability, People and Values, Liveability, and Governance. The top cities for each pillar are depicted in Figure 2.

Eight cities around the world rank in the top 20 on all four pillars: Copenhagen, Geneva, Melbourne, Sydney, Toronto, Vancouver, Vienna, and Zurich. Cities with top 20 ranks on three of the pillars include Amsterdam, Edinburgh, Luxembourg, Oslo, Singapore, and Stockholm.

This list of leaders highlights the dominance of Western Europe in sustainability perceptions, with Asia Pacific and North America also well-represented. European cities occupying top perceptual ranks may be in part because they exist within the most rigorous policy landscapes for sustainability action.

The most sustainably perceived European cities—Copenhagen, Geneva, Vienna, and Zurich—share a prioritisation of green spaces, abundant renewable energy sourcing, and large uptake of cycling and public transport modes. The nations they sit within all have either 2040 or 2050 net zero carbon emissions targets; in fact, Copenhagen set its own 2025 net zero target back in 2012 and continues to progress against it.

More broadly, cities across Europe and the rest of the globe have been vocal in their battles against over-tourism, on the grounds that high tourism is simply unsustainable. Cities like Amsterdam, Barcelona, and those across the Greek islands have instituted levies and seasonal bans to control crowds and preserve the integrity of neighbourhoods for residents.

Perceptual leaders in the Cities Index, however, have taken a different approach. Geneva spotlights sustainability for tourists with its own sustainability certification system, labelling venues that sell local products and products made from local premium agriculture practices.

Copenhagen piloted a rewards program that gamifies sustainability for tourists who opt into activities like biking or cleaning up the city, getting free entry into attractions, tours, or refreshments in exchange.

Do Perceptions Translate to Performance?

City-level sustainability commitments and initiatives often differ from greater national attitudes. In the United States, for example, cities are better positioned to set their own climate targets or incorporate more green spaces than the state or national government.

However, higher levels of government can issue mandates on topics like clean transportation or affordable housing, which cities are expected to deliver on.

Cities within nations that have strong sustainability associations tend to be subject to a ‘halo effect;’ that is, perceptions of a state, nation, or region as sustainable can positively influence city-level perceptions. Given these dynamics, perceptions and performance often become entangled.

In reality, cities around the world—sustainability leaders and laggards alike—share the challenge of acting to meet the aims of wider international agreements, like the 2015 Paris Agreement or the 2030 United Nations Sustainable Development Goals. Each city has its own constraints, from budgets to infrastructure to political gridlock, which affect its capacity to deliver on sustainability ideals.

Advice for City Brand Leaders

For city brands, demonstrating a commitment to sustainability is a delicate task. A city brand needs to carefully manage the associations it may have, for better or for worse, with the greater state, nation, or region it sits within.

When done right, sustainability-related communications can help support tourism, relocation, and talent attraction for study or work, so long as the messaging is accurate and relevant.

At a minimum, sustainability communications must be accurate to mitigate reputational risk and greenwashing accusations. Accuracy covers not exaggerating or misrepresenting actions taken, as well as not over-emphasizing achievements and positive highlights.

City brand leaders must balance accuracy with relevance: engaging stakeholders helps ensure that the city brand’s messaging resonates by focusing on the sustainability themes that matter most.

To communicate confidently, city brand leaders must also strive to build their sustainability literacy. Those responsible for communications can become well-informed about the city brand’s sustainability progress and goals by learning from those responsible for driving sustainability action.

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European consumers are far more discerning than the rest of the world when it comes to a brand’s commitment to sustainability.

Brand Finance’s annual research consistently demonstrates that perceptions of corporate brands differ around the world. Given the regional variation, this data is valuable to guide the brand management and communications strategies of international and expanding companies.

In Brand Finance’s annual market research study, the Global Brand Equity Monitor, over 150,000 respondents indicate which attributes they associate with familiar brands. As part of this, respondents are asked the extent to which they believe that a brand is committed to each pillar of ESG: environmental sustainability, social sustainability, and governance.

There are statistically significant differences between the proportion of disagreement and agreement scores issued by respondents of European countries, compared to non-European markets, in all three categories (Figure 1).

European respondents are 25% less likely than people living outside of Europe to believe that a brand is committed to environmental sustainability. Compared to non-European respondents, Europeans are 26% less likely to agree that a brand is commitment to social sustainability, and 22% less likely on governance.

Brand Finance research coverage includes 16 European markets and 24 non-European markets.

Additional analysis determines how sustainability perceptions differ between markets within Europe. Respondents from Switzerland were the most likely to disagree that a brand is committed to environmental sustainability, with 23% indicating disagreement. This was followed by respondents from the Netherlands (21%), Denmark (20%) and Norway (20%).

Europeans’ more discerning views on brands’ commitment to sustainability can be attributed to several factors, from regulation to progressing norms.

Overall, the strong European embrace of sustainability as part of lifestyles appears as part of public norms and behaviours. This informal education extends from heightened local and national commitments to sustainability, and together makes for a European public very attuned to sustainability-related claims and practices.

The European Union (EU) is at the forefront of establishing rigorous, standardized corporate sustainability reporting. Its Corporate Sustainability Reporting Directive (CSRD) provides a legal basis for mandatory sustainability reporting, aiming to integrate it with financial reporting. Although EU-originated legislation, CSRD has a wide scope and applies to over 50,000 companies based on their headcount, revenue, and assets in EU markets.

The EU’s efforts are commendable and indicate where the global landscape is headed. As multinational corporations are in scope of CSRD, it is intended to have cascading effects on other markets. Though commendable, recent pushback on the EU’s green agriculture regulations and the recent release of the Draghi report—by the former head of the European Central Bank on EU competitiveness—complicate the picture.

In the report, Draghi warns of the regulatory burden posed by increased sustainability reporting legislation. Overly stringent regulation may reduce the scope for brands to meaningfully differentiate themselves on sustainability. The danger here would be that brands become less imaginative and ambitious in their sustainability communications in favour of a safer, compliance-based approaches to updating stakeholders.

With more regulations and higher stakeholder expectations, greenwashing is increasingly a reputational risk, and hopefully less likely—but greenhushing is taking its place as brands roll back their sustainability communications out of fear of criticism and backlash. In the short term, there is anecdotal evidence to suggest an increase in greenhushing as firms become even more cautious about unintentionally over-claiming their sustainability credentials. Ideally, businesses should respond to regulations and stakeholder expectations with more consistent, effective, and authentic ESG communication, while also meeting their compliance asks.

Increased scepticism from European respondents highlights the importance of being attuned to the variation in stakeholder perceptions and expectations across geographies. Sustainability perceptions are important to monitor, as these insights are applicable to growth strategies regardless of how strongly an organization considers sustainability as part of its brand identity.

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The world’s attention was on the athletes and action of the 2024 Paris Olympics, but the organisers’ commitments to sustainability at this year’s Games deserve recognition too.

Few amongst the global general public perceive a strong commitment to sustainability at this year’s Olympiad. According to Brand Finance research (Figure 1), 35% see the games as having a positive impact on the community, 25% see the games as well managed and ethically governed, and just 18% associate the games with a commitment to environmental sustainability. However, Paris arguably was an inflection point, setting an expectation for sustainability to be integrated in all future Games.

The sustainable structures, policies, and practices at this year’s Olympics were the most ambitious yet, and Paris was the first host to align with the International Olympic Committee’s (IOC) 2020 agenda¹ for sustainability.

SO, WHAT DOES SUSTAINABILITY LOOK LIKE AT PARIS 2024?

Hosting an Olympic Games has a large carbon footprint, and so Paris organisers focused on environmental sustainability. They put proactive measures in place for spectators, construction crews, athletes, and the city at-large. The organizers reported² that 95% of its sporting venues were existing or lighter, temporary structures, reducing the embedded emissions of builds.

More significant new constructions, such as the Olympic Village residences, were constructed with an afterlife in mind, with plans to convert them into workspaces and housing³, mitigating emissions associated with demolition and new construction. Whether new or a retrofit, organisers prioritised incorporating recycled materials or those with a lower environmental footprint and procuring renewable sources of electricity and cooling⁴.

Resource re-use also extended to sporting and media equipment, which was largely rented in the first place and will be offered for rent after the Games. Meanwhile, the food that fuelled Olympic athletes was markedly⁵ more plant-based than at past games and was sourced largely from local producers.

Moving so many people from place to place to participate and spectate at the games is also a large source of emissions. Paris made use of its European rail linkages to encourage public transport modes where possible. Within the city, all sporting venues were accessible by public transport, completely excluding access for motorized vehicles⁶.

UNINTENDED BENEFITS

Some of the sustainability-related benefits of the Olympics are not necessarily intentional. Whilst there may have been some embarrassment that poor water quality in the Seine led to delays in the triathlon events, this created considerable coverage and discussion of the issue of water pollution, a global problem. Hopefully this will translate into more concerted efforts by French water authorities and Parisian officials to resolve the issue and reinforce calls for action elsewhere.

While the integration of sustainability into the Paris Games is pioneering, the communications around the efforts, as well as labels used for the event itself, are also noteworthy.

In 2023, French outlets noted that the organizers had redacted7 messaging that declared the 2024 Summer Games to be ‘climate positive’ and later, ‘carbon neutral.’ This gap between expectation and reality was labelled8 as greenwashing by some scholars and environmental watchdogs, but the criticism is an oversimplification of the complex decisions and continuous adjustments required in these communications.

As plans shifted, whether scaling back was due to funding gaps, scientific challenges, or other factors, Paris Olympics organisers updated their messaging, such as when they responded to community concerns by releasing additional9 details on the offsetting projects tied to renewable energy claims. And when Tahitian residents stood10 their ground on the risks to coral reefs from surfing tower construction after being left out of earlier consultations, Paris organisers shifted plans and communications accordingly.

Paris 2024 may have fallen short of its ambitious sustainability goals set at the start of planning, but there is still much to celebrate. Every Olympic Games is an unmatched opportunity to reach a global audience. The prioritisation of sustainability at this year’s Summer Games—with demonstrated improvements from Games past—should inspire greater commitment in Games to come. Our verdict on sustainability at Paris 2024: a well-deserved silver medal.

¹https://stillmed.olympics.com/media/Document%20Library/OlympicOrg/IOC/What-We-Do/celebrate-olympic-games/Sustainability/IOC-Sustainability-Report-2019-2.pdf
²https://olympics.com/ioc/news/all-you-need-to-know-about-paris-2024-sustainability
³https://www.ft.com/content/5147ad91-bbe0-4c00-abfa-020239453d26
⁴https://www.edie.net/how-sustainable-is-the-paris-olympics-2024/
⁵https://www.countryliving.com/uk/news/a61764317/environmental-director-paris-olympics/
⁶https://olympics.com/en/paris-2024/spectator/get-to-the-competition-venues
⁷https://www.lemonde.fr/en/sports/article/2023/05/31/paris-2024-the-untenable-promise-of-climate-positive-games_6028569_9.html#
⁸https://www.scientificamerican.com/article/the-paris-olympics-are-a-lesson-in-greenwashing/
⁹https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/072324-feature-paris-olympics-to-lean-heavily-on-offsets-clean-power-to-hit-carbon-targets
¹⁰https://www.bbc.com/future/article/20240731-how-tahiti-locals-fought-back-against-olympic-surfing

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Despite a proven market for green goods, companies may be unable to translate this demand into profit.

New data from Brand Finance helps to bridge this gap by revealing which sustainability topics are most important to UK consumers, why brand activity in this space matters, and what prevents customers from making sustainable choices. AI-assisted technology gathered consumer views, resulting in insights into the trade-offs people make when weighing the importance of sustainability against cost, convenience, quality, and trust.

Top-of-Mind Sustainability Issues

When asked about the sustainability issues most important to them (Figure 1), respondents focused on topics relevant to Food and Apparel. This is intuitive, given that these brands and products tend to be highly visibile to consumers. Respondents mentioned low-and no-waste packaging, locally made products, and organic items when discussing food, and when talking about apparel, they name-checked circularity, sustainable materials, and secondhand shopping.

Sustainable Brands

Naturally, customers perceive brands that promote iniatives related those those themes as committed to sustainability and aligned with their own values. Although Food and Apparel brands were mentioned in this context (Figure 2), customers also cited personal care and household product brands. Sustainability is central to Lush’s messaging and the company has a track record of activisim that is tied to the products they sell, including but not limited to animal rights, reduced packaging, and transparent product formulas. Household cleander brand  Ecover also leverages messaging focused on clean product ingredients by touting associated health benefits, while Smol echos the call for less plastic waste and packaging. All three brands notably use the term ‘revolutionary’ to describe themselves and the role they champion towards mainstreaming lower-waste, health-conscious products and raising consumer awareness.

Research respondents also recognised food brands, most frequently citing plant-based offerings, certifications of their sustainability credentials, and/or being UK-based and local to the consumers. Brands mentioned that touch on one or more of these themes included Alpro, DuchyOrganic, Linda McCartney, Quorn, and Totally Wild Food.

Why Sustainability Matters

When prompted to think about sustainable brands, respondents were also asked the extent to which a brand’s sustainability commitment matters to them (Figure 3). There was widespread acknowledgement of the power brands have to lead in sustainable transformation and communicate their progress to customers. Respondents also expressed interest in ways to expand their sustainability awareness and knowledge as it relates to purchases and living habits, as well as a desire to see authentic and merited sustainability claims, rather than what they might describe as “greenwashing.”

Greenhushing is an emerging trend, defined as brands under-communicating on their sustainability achievements for fear of being accused of greenwashing. Based on the research, appetite for greater sustainability knowledge and awareness suggests that brands should remain committed to communicating confidently about their meaningful, impactful sustainability initiatives.

Barriers to Sustainable Choices

Though the research indicates that UK consumers are lamindful of sustainability as it relates to product options and brand positioning, there are inevitable trade-offs that affect how strongly it translates into purchases.

Respondents indicated that time-sensitivity of a purchase and convenience crowd out their consideration of a product’s sustainability (Figure 4). The reverse is true, as well – when they’re not under time pressure to make a purchase, respondents indicated they’re more likely to consider sustainability in their research. However, there are factors that can outrank sustainability even when time pressure is not a factor, such as durability and price. Respondents also signified that loyalty to their brand of choice may prevent them from considering more sustainble brands for purchases.

Sustainable brands in impulse or high-speed purchase categories should aim to provide simple, compelling messages to consumers to drive sustainable choices, while brands in low-frequency purchase categories should be mindful of tying sustainability to other key purchase criteria.

While this new data provides a useful look at how UK customers consider sustainability when making purchases, one takeaway that remains consisent is that brand sustainability claims must be authentic. Once that is assured, when brands so have a sustainabilty story to tell, they should tell it confidently.

The Brand Finance Sustainability Index is a flagship study that places a financial value on sustainability perceptions for the first time. Its second iteration launched earlier this month, quantifying the value of sustainability perceptions and the gap between perceptions and actual sustainability performance.

As part of its analysis, Brand Finance evaluates the role that sustainability plays in driving choice in each industry. The firm researches the attitudes of over 150,000 members of the general public from over 40 countries about over 6,000 brands. Respondents are asked a wide range of questions, including marketing funnel questions about awareness, familiarity and consideration. They are also asked the following question: “Which of these statements, if any, do you think apply to Brand X?” The list of statements varies by sector, but typically includes attributes such as ‘value for money’, ‘reliable’, etc.

Using the response data, Brand Finance evaluates the role that each attribute plays in driving choice using an analytical technique known as brand drivers’ analysis. Drivers analysis involves running multiple correlation analyses between the consideration of usage of a brand, and the various brand attributes to determine how much explanatory value each attribute has. 

The results showed a varying role for sustainability across sectors. For example, a lower role for sustainability in consideration is observed in Airlines  (6.5%) and Technology (6.6%), where attributes like trustworthiness and customer service are relatively more important. In contrast, sectors like Supermarkets (11.1%) and Apparel (9.6%) have a more powerful role for sustainability. 

Further, the research indicates a significantly enhanced role for sustainability in driving choice in the luxury or premium market segment. This was evaluated in the Auto, Apparel, and Cosmetics sectors, where sustainability driver scores are over 1.5 times higher than for the sector overall.

There may be multiple effects at play here. A brand’s sustainability commitments may imply a slight cost increase that necessitates more premium positioning. Premium-segment consumers also have less price sensitivity, enabling them to seek improvements on other attributes, including sustainability. Lastly, at the premium end of many markets, brands become more than just a guarantee of attributes to the consumer—their products also signal the purchaser’s status, taste, identity, or ethics to others.

This variation in the role of sustainability has significant implications for the financial returns brands can hope to gain from their sustainability action and communication.

Brand Finance also determined the relative importance of the environmental, social and governance (ESG) aspects of sustainability, which revealed significant variation across sectors. For example, the environmental dimension contributes most to the sustainability driver in Oil & Gas, as one might expect from the growing urgency of action on climate change and the energy transition. In a sector like Insurance where fair dealing and prudent management are paramount, ‘governance’ is the most important dimension.

Despite a spectrum of values for all ESG attributes, social sustainability had the smallest effect on consumer consideration across all sectors this year. Emphasis on climate action has steered ESG efforts and hiring practices of many businesses, to the point where many stakeholders view sustainability as exclusively environmental. This comes despite the UN Sustainable Development Goals clearly spanning many social and governance topics. Governance to combat financial misdeeds has been a priority for many years, and the emergence of generative AI and its potential for misuse further enhances the dimension’s importance. The resulting ‘crowding out’ of social sustainability is a concern of both sustainability professionals and community-related stakeholder groups.

Find the full results of the Brand Finance 2024 Sustainability Perceptions Index here.

A commitment to sustainability is increasingly seen as a business imperative, with stakeholders expecting environmental, social, and governance (ESG) action. Brand Finance's Sustainability Perceptions Index quantifies the value of sustainability perceptions and the risks that can arise from a gap between those perceptions and actual performance.

Sustainability as a Driver of Consideration

In retail banking, our research shows that sustainability drives 6.8% of brand consideration, relative to other attributes. Globally, it is the eighth most important attribute, as shown in Figure 1.

Though not the most important factor, this clearly underscores that sustainability plays a powerful role that can make the difference to consumer choice on the margin for most, and in a fundamental way for many. When there are millions of customers in the market, the 6.8% choice driver can amount to hundreds of millions of dollars of revenue at stake. In addition, trustworthiness, which reflects perceptions of the governance dimension of sustainability, was ranked third at 9.7%.

Regionally, sustainability’s importance in driving consideration ranges from 3.3% up to nearly 10% in regions like Middle East and North Africa and Oceania.

Certain aspects of sustainability matter more to some stakeholder groups than others. For example, banking brands generally communicate to business-to-business audiences about how they enable achievement of client ESG goals. Climate tends to be a top priority. Banks therefore may dedicate a proportion of their portfolios to climate-focused ventures. BMO (Canada) is viewed as a pioneer in this space for its client partnerships to advance net-zero transitions (World Benchmarking Alliance). By 2025, it plans to channel $239 billion in capital to clients pursuing sustainable outcomes, through a mix of environmentally and socially sustainable lending, underwriting, advisory services, and investment.

In retail banking, the link between a bank’s day to day operations and social sustainability may be easier to communicate. For example, Santander (Spain) and Scotiabank (Canada) are among banks working to remove barriers to service access, entrepreneurship, and credit. Whilst this is positioned as a sustainability/CSR initiative, these programmes assist in building a larger and loyal customer base.

Leaders in Perceived Sustainability

The leaders in our perceptual results above have developed a clear brand positioning around aspects of sustainability. DZ Bank (Germany) anchors its messaging on sustainability as an extension of trust and transparency with its corporate and institutional clients.

Banco Valencia, now merged with Caixabank (Spain) is similarly positioned as stakeholder-centric, stating a vision to offer “banking at the service of social challenges.” NH Bank (South Korea) builds its perceptions through business touchpoints linked to environmental sustainability as an agricultural bank. It works to increase the welfare of agricultural areas and reach underserved low-income and rural segments. Connecting environmental sustainability to livelihood and economic outcomes demonstrates an integrative approach to sustainability communications.

Worth noting in these results is the presence of digital banking platforms, emerging to offer a seamless and accessible banking experience to all. These platforms—such as Nubank (Brazil), Lydia (France), Hello bank! (France), Cetelem (France), Isybank (Italy), and Monzo (UK)— take top ranks in all dimensions of sustainability perceptions.

On environment, perhaps the lack of physical presence shapes consumer perceptions of a digital bank’s lower climate impact. Social sustainability is most apparent from the business model that uses digitisation to remove barriers to financial services. Perceptions of adequate data security through online platforms would support the governance dimension.

The Sustainability Perception-Performance Gap

Perceptions need to be backed by actual sustainability performance if a brand hopes to maintain credibility. In quantifying both, we place a financial value on the value to gain or value at risk—a gap—based on relative brand sustainability perceptions and performance. When performance exceeds perception, there is an opportunity to capture value by improved sustainability-related communication. Conversely, perception exceeding performance indicates a reputational risk as observed with greenwashing, where value is at risk without sufficient action to manage performance. A positive sustainability gap value indicates that there is still room to communicate more consistently and clearly about brand sustainability efforts.

Figure 2 depicts the top 10 largest positive gap values for banking brands in the latest Sustainability Perceptions Index.

On environmental sustainability, Bank of America (US) is notable for its above-average performance, but perceptions in this dimension are below average. The company’s net-zero target for 2050 reflects best practice by encompassing not only its operational emissions, but its financing and supply chain. Bank of America also has committed to deploy $1.5 trillion of sustainable finance by 2030 jointly addressing environment and inclusive social development. The bank is also among national corporate leaders in issuing ESG-themed bonds. It may be the case that, perceptually, these efforts are less visible or relevant to a consumer audience.

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Sustainability encompasses issues that are truly global in scope, from topics like climate change and ocean pollution, to human rights in supply chains that span multiple countries. For this reason, the sustainability-related actions of countries have significant scope to shape their international reputation and Soft Power. 

Brand Finance’s Global Soft Power Index reflects the complex linkages between sustainability and Soft Power. Within the Sustainable Future pillar, nation brands are evaluated on four aspects of environmental sustainability: cities and transport, support for global action on climate change, green energy and technologies, and environmental protection.  

Beyond this, sustainability is reflected in many other Soft Power attributes – nearly half of the attributes that drive national Soft Power (44%) relate to environmental, social, and governance (ESG) themes. Our data points to a clear relationship between sustainability and Soft Power. Figure 1 plots national Global Soft Power Index (GSPI) scores against scores on the United Nations Sustainable Development Goal (SDG) Index, an aggregate measure of overall national performance against the UN SDGs. The correlation coefficient of r=0.65, whilst not perfect, demonstrates a clear relationship between national action on key sustainability challenges and Soft Power.

This is supported by the finding that a nation’s Sustainable Future pillar score is highly correlated with national Reputation. Here, we see a strong correlation of r = 0.93. The sustainability perceptions that nations build fit within broader national activities: here we focus on Diplomacy and Business & Trade.

Diplomacy

Diplomatic settings must place sustainability in a Soft Power context through dual relationships. National governments exercise diplomatic Soft Power to persuade others to make commitments at major conferences, like the annual UN Conference of the Parties (COP). Simultaneously, these events are an opportunity for nations, particularly the host, to present themselves as key actors at the heart of negotiations and leaders in sustainability.

At these annual conferences where all voices are heard on the world stage, smaller nations have also built a Soft Power platform around sustainability. This is particularly important for island states, which stand to be hit first by the worst effects of climate change, and Indigenous peoples, who have long been sustainable custodians of their land and fight displacement and degradation.

In our data, there is a correlation of r=0.89 between national Sustainable Future pillar scores and influence in International Relations.

Business & Trade

National reputation-building for sustainability is pronounced during the ongoing green energy shift. Denmark’s strong sustainability reputation is based on its swift adoption and scale of renewable energy industry infrastructure. Its endeavours have made zero-fossil power days possible in recent years, alongside new partnerships forged with other nations like Japan. For this reason, Denmark has developed an association with the wind energy industry that can be likened to Germany and the auto industry. Such a perception of national expertise continues to help its brands such as Vestas to export around the world.

In overseeing commerce activities, national governments increasingly monitor greenwashing and oversee sustainability reporting. The European Union continues to set the tone in this space with its Corporate Sustainability Reporting Directive (CSRD) and new anti-greenwashing directive.

At the Global Soft Power Summit 2022, former Danish Prime Minister Helle Thorning-Schmidt made the key point that nations—like corporate brands—should be careful to ensure that their communication and applications of Soft Power are backed up by substance. Further, the enduring power of nation brands must be emphasised; media ‘noise’ rarely appears to register at an international level in the short term, which is why nation branding campaigns must be linked to real substance and supported by long-term financial investment to have the desired effect.

In our data, there is a correlation of r=0.96 between national Sustainable Future pillar scores and influence in Business & Trade.

Perceived Sustainability Highlights

Turning to the nation brand-level results from this year’s Global Soft Power Index, repeat players have filled the top five ranks on many measures of sustainability (Figure 2). For ‘high ethical standards and low corruption’ Japan receives the highest score, just ahead of Switzerland. Nordic countries, regular top performers on a wide range of Soft Power metrics, also score well, with Norway 3rd, Finland 4th, and Sweden 5th.

For ‘tolerant and inclusive’ society, we see a similar group of countries. Canada tops the list, followed by the Netherlands, Sweden, Norway, and the United Kingdom.

The United States once again has the highest perceived score for ‘helpful to countries in need.’ The US’ strong support for Ukraine may help to explain this performance, supported by the country’s enduring support for international institutions and development programs.

As much as the US is a magnet for criticism, the global public recognises and (in Soft Power terms) rewards the country for its generosity, alongside Canada, Germany, the UK, and Sweden. On measures of environmental sustainability, Nordic countries again perform well. Rated on ‘acts to protect the environment,’ Norway is first, followed by Switzerland, Sweden, Canada, and Finland. ‘Sustainable cities and transport’ are one the most important sustainability-linked drivers of Soft Power. On this metric Japan leads for the second year.

Germany, Sweden, and Switzerland follow Japan. The UK makes it into the top five, likely attributed to its increased efforts on low-emissions transport.

The final sustainability statement is ‘supports global efforts to counter climate change.’ Here, our research indicates a misalignment between public perception and reality. The US is ranked at the top, closely followed by the UK in 4th. However, the contributions of the US and UK to historical carbon emissions and associated climate change are amongst the highest in the world.

Given this, stakeholders rightly question both national intentions and their ability to execute. The UK’s recent steps back from its declared net zero plan in autumn 2023 were widely taken up in the media, and its climate leadership positioning was questioned. In a more extreme case, the US and China were not even invited to the UN Climate Ambition Summit held the month prior.

Conversely, countries with far lower historic emissions and a lower ongoing per capita impact today are arguably not getting the recognition that they deserve as stores of natural capital. There could be an opportunity for the likes of Sri Lanka, Zambia, Jamaica, Mozambique, and many more to convey the critical role they play in the sustainable development dynamics of all nations.

Global Soft Power Index 2024

Explore the findings of the world's most comprehensive research study on perceptions of nation brands, presented in a downloadable report and an interactive dashboard.