What your business needs to do to overcome public distrust

Proof Points

What your business needs to do to overcome public distrust

untrusting

Trust is a valued but elusive resource, especially when applied to business. Trust in business is seen as both a driver of corporate sustainability efforts and a hoped-for outcome of any sensible corporate sustainability strategy. New data from the 2012 BSR/GlobeScan State of Sustainable Business Poll offers insights into strategies for enhancing trust in companies. 

GlobeScan has been working with BSR for the past four years on an annual quantitative survey of BSR member companies. This year’s research, which took place between Sept. 6 and 24, 2012,is based on a survey with 556 senior corporate responsibility and sustainability practitioners on a range of timely issues, including trust.

How Much is Enough?

For the past three years, we have asked business professionals to assess the level of public trust in business. The results, outlined in the chart below, show that while respondents continue to believe the public has limited trust in companies, there is growing optimism among business leaders that the public is beginning to express greater trust in the private sector. Indeed, the perceived net trust ratings have improved from a score of minus 23 in 2010 to minus 8 in 2012. The findings show abelief among corporate sustainability executives and managers that while the trust deficit continues, progress has been made over the past few years.

This optimism among corporate sustainability professionals vis-à-vis trust in business is not completely accurate, according to GlobeScan’s Radar Research Program. Our latest tracking of global public opinion shows that while there has been a positive shift in trust in global companies in many emerging markets between 2009 and 2012, trust levels in global business remain flat or are declining in most of Europe and North America. This suggests a subtle, but perhaps significant disconnect between perceptions inside companies and the broader general public.

The Road to Higher Trust

The State of Sustainable Business Poll also asked corporate sustainability practitioners to rate the importance of a range of possible actions to build trust among the public.

According to respondents, the most fruitful actions for growing trust include increasing transparency (54 percent, up one point from 2010), measuring and demonstrating impact (46 percent, down 8 points), creating innovative products and business models (45 percent, up 11 points), and greater stakeholder engagement (40 percent, up 3 points).

In contrast, increasing CEO leadership, working with NGOs, addressing executive compensation, increasing board oversight and better alignment with lobbying efforts are all viewed significantly less likely to enhance public trust in business.

Importantly, there is strong alignment between enhancing public trust and business performance, according to stakeholders surveyed. We asked corporate sustainability professionals to rate the impact of these same actions on business outcomes and the top trust issues – transparency, impact, innovation, and engagement – are also viewed as likely drivers of business performance.

A Social License to be Bold

Given the need for business to demonstrate ever more leadership on the sustainability agenda, public trust in business is a strategic imperative. Science tells us that we need to act much more quickly and effectively to avert ecological calamity and if we are to build more stable and healthy societies. Global companies are well placed to play a greater role in solving sustainable development challenges but in order to do so they must earn an expanded social license.

While a social license to operate can be maintained  by many companies within existing levels of trust in business, a social license to be bold will require a great deal more trust. We would all like governments to step up and provide the necessary leadership to ensure a thriving planet and society. Unfortunately, the evidence post-Rio+20 suggests that governments are highly constrained to drive forward the required change. Global business, with a self-interest in secure and growing markets, may be able to fill some of this leadership vacuum.

Transparency, innovation, impact, and engagement. These are the levers for building trust in business, which supports stronger corporate performance and creates the conditions for bolder corporate leadership to build a better future for all. This needs to be the collective project of business for the next decade.

Photo of unconvinced man provided by Courtyardpix via Shutterstock