How brands rebuild trust through authentic action
Public trust is at an all-time low, according to the 2017 Edelman Trust Barometer, but business might be the key to rebuilding faith in the system.
Trust is in short supply these days. Across government, business, media and NGOs, we are witnessing one of the largest drops in trust in recent years — a trend verified by the annual Trust Barometer published by my employer, the global communications marketing firm Edelman.
Indeed, more than half (53 percent) of those surveyed for this year's report said they believe the current overall "system" has failed them — that it is unfair and offers little hope for the future — while only a dismal 15 percent believe it is working.
While trust has been declining for years — and 2017 saw only a modest drop in trust in government (one point), business (one point) and NGOs (two points), with a notable fall in media (five points), over the previous year — this was the first year there was a decline in all four institutions.
This decline in trust couldn’t have happened at a more inconvenient time — global atmospheric concentrations of carbon dioxide are unprecedented compared with the past 800,000 years, and global temperatures continue to rise. Last year was the hottest year on record, according to NASA, and the 10 warmest years on record worldwide have all occurred since 1998. Extreme weather events, including wildfires, drought, coastal flooding and more violent storms, continue to grow in intensity and frequency across the globe. Meanwhile, global inequality and human rights concerns checker the globe.
But even as trust in government wanes, the corporate sector increasingly is being viewed as the only institution that can make a difference. According to the Trust Barometer, some 75 percent of people expect the businesses they engage with to take specific actions to improve social and economic factors affecting community alongside profit.
This helps validate what companies embracing the triple bottom line already know, and it is a call to action for all that have yet to get onboard. While businesses must make money to survive, in today’s competitive marketplace for users, customers and talent, a well-defined and communicated purpose is what’s needed for a company to thrive — and could be the key to helping to restore public trust in the institutions needed to take on climate change and the other pressing social and environmental challenges of our time.
Sustainability progress amid hope and horror
"It’s hard to imagine a time more hopeful and horrifying for sustainable business," Joel Makower recently wrote in his summary of the 2017 State of Green Business report.
Despite the cynicism, there’s a lot to feel hopeful about. We are witnessing some of the greatest achievements and milestones in the collective effort to secure a more sustainable future. Last year, the historic Paris Agreement on climate change was ratified. What's more, upwards of 1,000 businesses and investors have signed the Business Backs Low-Carbon USA statement, which reaffirms their commitment to addressing climate change through the implementation of the pact in Paris.
Businesses also continue to step up ambitions and actions related to embracing all aspects of the triple bottom line: reducing greenhouse gas emissions, investing in renewable energy, improving supply chain sustainability and investing in technologies that accelerate sustainability solutions across industries.
And even with the U.S. government under the influence of climate change deniers, there’s no stopping the onward march of sustainable business. While the Trump administration has little interest in decarbonization, markets care a great deal. Between 2004 and 2015, global investments in clean energy grew from $62 billion to $329 billion, according to Bloomberg New Energy Finance. And a 2016 Merrill Lynch whitepaper (PDF) reported that S&P 500 companies that lead on climate change generated an 18 percent higher return on equity, 50 percent lower volatility of earnings and 21 percent stronger dividend growth, providing "an attractive investment opportunity given their greater profitability and relative affordability." That's a major affirmation from one of the world’s leading financial services firms.
With the future of reporting involving real-time sustainability data exchanges enabled by digital technology, this will empower the public through almost instant interactions with companies — going a long way in earning back public trust. But acting internally on improving sustainability outcomes no longer is enough, and brands must begin moving outward to engage the world on the issues at the crux of their purpose.
The rise of brand activism
In recent years, brand activism has become as increasingly more common as it has audacious. Lyft recently made headlines when it pledged to donate $1 million to the American Civil Liberties Union in response to President Trump’s immigration ban. Likewise, Starbucks CEO Howard Schultz wrote an open letter to staff committing to hiring 10,000 refugees, while Airbnb’s Brian Chesky tweeted that the home-sharing company was providing free accommodation to anyone not allowed in the United States.
In an era when consumers increasingly expect more from business than just the products and services they sell, brand activism is becoming the norm. In the Age of Trump, companies of all shapes and sizes are being evaluated on their action or inaction. The chief executives of Oracle, IBM and Uber have faced backlash from employees and other stakeholders for ties to the Trump administration. At the same time, many corporate leaders have felt compelled to speak out on social issues, such as when the chief executives of Apple, Ford, Netflix and Amazon decried Trump's travel ban. For many companies, discussions of diversity and inclusion have become common in boardrooms where they had previously been absent.
Purpose for people and planet
To rebuild trust and restore faith in the system, businesses and other institutions must step outside of their traditional roles and work toward a new, more integrated operating model that puts people — and the addressing of their needs and concerns — at the center of everything they do. And from a sustainability perspective, this also means putting the planet front and center for business operations.
That’s not to say that every brand should be an activist brand. With "activist-washing" the new "greenwashing," companies trying to jump on the brand activist bandwagon risk alienating their stakeholders even further through insincere action.
What’s truly needed is for brands to think long and hard about why they exist beyond making money — to identify their core purpose and integrate it into everything they do. REI’s and Patagonia’s Black Friday endeavors resonated with the public because they were rooted firmly in a clearly communicated brand purpose.
While embracing the triple bottom line is a good start, purpose-driven brands dig deeper to identify and act consistently on the issues central to their being. And as more businesses recognize this, they may be able to look inward to act outward and win back a little bit of the public’s faith in a system that sorely needs it.