New research reveals transatlantic differences in corporate reputation and trust in brand. Underpinning it all, a simple truth – that only commercially successful companies can earn a reputation for social responsibility.
Microsoft, Bayer, Shell and Ford are the company brands most trusted in the UK (with a rating of 35%-46% on trust), although leading charities rank almost twice as highly. The survey, released by PR specialists Edelman on February 5, ranks non-profit groups such as Amnesty International, WWF and Greenpeace in the top percentile (63%-76%). The overwhelming consensus of the 850 opinion formers interviewed is that corporations should be doing more to foster relationships with the non-profit sector.
Interestingly, however, Americans differ from their European counterparts in placing far less trust in non-profits (40%) than in leading corporations (55%). From a consumerist perspective, half of the Europeans interviewed try to avoid companies against which nonprofits are campaigning, compared to a third of Americans. Contact Mark Bennett, Edelman, on 00 1 212 704 8129 (http://www.edelman.com)
Tesco is winning the media wars, gaining more than double the amount of positive press coverage during 2001 as its nearest rivals. Industry leaders include smile (banks), Diageo (beverages), Cadbury Schweppes (food producers), Arcadia (retailers), Centrica (gas distribution), BP (oil) and United Utilities (water). Barclays enjoyed the biggest shift from bad to good coverage between 2000 and 2001, with the BBC and BMW also seeing a considerable turn-around over the same period.
Predictably ’embattled’ Railtrack ranks worst in the race for good press, followed closely by Marconi, BT and Equitable Life. The PressWatch 2001 survey, released in early February, charts 10,000 companies in total. Contact Tim Crane, PressWatch, on 020 7261 9964 (http://www.presswatch.com)
European governments and companies are ahead of their American counterparts in promoting corporate social responsibility, concludes a 52- page report published by the Washington DC-based National Policy Association on February 5. The authors put this down to the European business culture, where firms are more comfortable working with government in a regulatory environment to improve social conditions. They also suggest that European companies are more accommodating to cross-sector participation. The report, The European Response to Public Demands for Global Corporate Responsibility, includes an analysis of multinational and national policy instruments that governments can adopt to promote CSR. Contact Susan Aaronson, NPA, on 001 202 265 7685 (http://www.npal.org)
Nearly two-thirds of UK charities now describe themselves as predominantly service providers rather than campaigners, but only a quarter believe this to be the right balance, according to the report The Third Sector: Vision for the Future published in February by the charity umbrella body, NCVO, and Ashridge Business School. Based on a 2001 survey of the UK’s largest 250 non-profit organisations, the report states that only a quarter of respondents thinks businesses are a ‘very important’ group to influence, putting the government and the public higher in their list of priorities. Contact James Georgalakis, NCVO, on 020 7520 2468 (http://www.ncvo-vol.org.uk)
Nokia (24), Nestle (39) and BP (45) are the only corporations with headquarters in Europe to make it into Fortune Magazine’s survey of the world’s top fifty most respected companies. The list, which is based on the opinions of 10,000 directors, executives and analysts from different industries around the world, is headed by General Electric, WalMart and Microsoft respectively. The country breakdown, however, sees Shell leading the way in the UK, followed by BP, Tesco, HSBC and Sainsbury’s. The survey, published on March 4, also categorises companies according to their reputation for social responsibility. Contact Terry McDevitt, Fortune, on 00 1 212 522 7149 (http://www.fortune.com)
Editorial Comment
Critics of globalisation bemoan the loss of diversity and the growth of homogenous brands, and say that it is really about the Americanisation of the world. There’s truth in both assertions, but the latter is not a one way street. America is changing too. Take the incidence of social reporting, and general responsiveness to public demands for greater corporate responsibility. In describing CSR in Europe for an American audience, the NPA report offers a fascinating analysis of current differences in approach. But it is wrong to imply nothing is changing.
Private enterprise drove the development of the United States, not the government. Indeed the spark that ignited the revolution was a protest about high taxation. In contrast Europe has developed under centuries of powerful states, only latterly tempered by democracy and even more recently by pluralist societies. Communism in the east and socialism in Western Europe were something the United States never experienced, yet their continuing legacy is still seen in social attitudes in Europe.
Thinking about recent CSR trends, the very power of corporate philanthropy in the US has held back demands for greater social engagement, while the last few decades’ focus on the environment in Europe has opened up the whole CSR agenda. But now in the US, socially responsible investment is growing strongly, linked to the business case for CSR, and the legal costs of mismanaging the diversity agenda is focusing corporate minds tremendously. The standing of business and NGOs may still be the reverse on both continents but the gap is narrowing. The Enron effect is having a huge impact on the degree of transparency in US corporate governance, already showing through in this year’s reporting round. Underpinning the reputation for CSR on both sides of the pond is fundamental business performance. It’s no coincidence that the companies on the US ‘least admired’ list have all had major business failures. Only successful businesses can acquire a reputation for responsibility -which is as it should be, since the first duty to society of a for-profit company is arguably to make a profit.
Corporate Citizenship Briefing, issue no: 63 – April, 2002
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