Ever woken up to the news that a recently disgraced company is donating millions to an orphanage? It sounds generous, almost redemptive. But when you dig deeper, kindness is just a facade, and their true purpose is to repaint a damaged brand image.
That’s called reputation laundering, a practice where companies try to clean up or rewrite their public image after unethical or controversial actions. And this is often achieved through rebranding, sometimes with financial paddings in the form of investments.
While laundering changes the publicly perceived image of a business, it might not necessarily result in a genuine reform.
In this article, we’ll break down how reputation laundering works, the tactics companies use to pull it off, and whether such image-cleaning strategies can ever be considered ethical.
What reputation laundering looks like
Jeffrey Zhou, CEO and Founder of Fig Loans, takes money laundering as a good comparison. “In money laundering, criminals move illicit funds through legal channels to make them appear legitimate. The money is still dirty at its core. However, it’s clean on paper.”
“Likewise, with reputation laundering, a company with a history of unethical behavior or controversial acts tries to appear responsible and trustworthy without truly changing. It might donate to charities, sponsor community events, or launch glossy rebranding campaigns that highlight its positive impact”, Jeffrey continues.
The goal is to make the bad look good, and most businesses simply embrace this approach in order to:
- To attract investors or customers.
- To regain trust after a scandal
- To enter new markets or political landscapes.
A perfect case study is ADNOC, a Saudi Arabian oil company, which allegedly planned a “green rebrand” ahead of the COP28 climate summit. The plan involves dropping or downplaying “oil” in its name, so as to promote itself as a “low carbon energy” provider
In contrast to the rebrand, ADNOC, at the time, projected a $150 billion expansion plan and drove approximately 5 million barrels in production per day.
4 common tactics companies use
Reputational damage costs businesses millions of dollars. So it’s unsurprising that many will resort to laundering in order to mitigate the consequences. Here’s what these companies do:
1. Strategic Philanthropy and Sponsorships
Nicolas Breedlove, CEO at PlaygroundEquipment.com, says, “The most prominent approach is to single out high-profile, emotionally charged social and environmental causes such as climate change, education, or poverty reduction and fund them.”
“For instance, an oil company criticized for pollution might sponsor renewable energy conferences or fund reforestation projects. A tech giant facing privacy scandals might support digital literacy programs in low-income regions”, Nicolas adds.
Companies seeking a reputational buffer might also sponsor community events, from sports to social gatherings, and roll out sponsorships for individuals in high-interest areas. So long as it modulates public sentiments from negative to positive, it works.
2. Rebranding and Name Changes
An example is Valeant Pharmaceuticals International. Valeant became infamous for dramatic drug-price increases, heavy debt, and regulatory scrutiny. However, in 2018, the company rebranded as Bausch Health, leveraging the well-known Bausch + Lomb name.
While this change helped Bausch Health create distance from the scandal-tainted “Valeant” identity, unless there is a core reform, rebranding only hides an old image under a new name.
It could also be for repositioning. For instance, a Tobacco company might suddenly rebrand itself as a health and wellness brand just to change public perception towards it as a Tobacco seller.
So, when you see companies suddenly switch their logo or name and rebrand all through without a consolidated and prior notice or justifiable reason, they might be trying to move away from a tainted identity.
3. Content Control and Narrative Management
Tons of brands go viral each day, especially on social media, but for the wrong cause. For instance, a company might end up getting dragged on Twitter because of an offensive ad, a tone-deaf post, or a leaked report exposing shady practices. The damage happens fast, and public opinion can turn within hours.
To regain control, brands often turn to deliberate shaping of public conversation to shift attention away from controversy. This could involve deleting old posts, pushing positive content through influencers, or sponsoring trending hashtags that drown out criticism.
Some even collaborate with media outlets, influencers, or PR firms to publish glowing stories that reframe their image.
4. Lobbying and Political Contributions
Take companies with more political connections as an example. They can easily leverage their chip to lobby for favorable policies or soften public scrutiny. Some can go as far as bargaining for a good business impression through political contributions.
For instance, a company might sponsor civic events, fund government campaigns, or align with patriotic initiatives just to subtly shift public perception from corrupt or exploitative to credible and supportive of national interests.
The ethical dilemma: can change be genuine?
“Reputational laundering is often used as a smokescreen, and as such, genuine change is hard to come by. However, there might be exceptions, where the company really intends to fix things from the core in addition to leveraging all the tactics we’ve mentioned before”, Adrian Iorga, Founder & President at 617 Boston Movers, shares.
And this is where watchdogs, journalists, and consumers all come in. They keep track of metrics that truly indicate a company has transformed inside out, beyond its superficial activities. For instance, a watchdog might tick questions like:
- Has the company replaced executives linked to the scandal?
- Are there transparent systems to prevent repeat offenses?
- Do financial reports and operations align with the company’s new public commitments?
- Are independent audits or external evaluations available to verify progress?
- Has the company publicly acknowledged its past wrongdoing instead of erasing it?
So, while it’s important to give disgraced companies a fair chance to rebuild trust, society must also set up the right checks to ensure those reforms are real.
The role of transparency and accountability
Kellon Ambrose, Managing Director at Electric Wheelchairs USA, says, “Rebuilding positive sentiment goes beyond changing names and logos. If your brand is currently stuck in a reputation mire, you need to be as open as possible and prove your changes to the public, with actions, not words.”
Examples of positive actions you can take include publishing:
- Sustainability reports
- Third-party audits
- Long-term policy changes
If you say you’re going green for the ecosystem, don’t end up increasing your barrels of fuel production. Your words must stay consistent with your actions.
Conclusion
Reputation laundering can put a company in more mess if the public finds out what’s going on behind the scenes. So, instead of investing in the glossy PR moves only, fix things from the inside out.
Your reputation can only be rebuilt, not washed. That means you shouldn’t utilize philanthropy as a way to bribe the public and psychologically cause them to like your brand. While rebuilding, keep your audience attentive with action and data-backed implementations.
When they see you actually doing something, beyond the PR releases, they start to trust you again.
