Two new surveys indicate that that while the public trusts global companies less and less, ‘super’ not-for-profits like Amnesty and WWF are gaining credibility. But, Briefing comments, these surveys do no make the distinction between different types of trust.
Public trust in companies has declined over the past two years, according to a global public opinion study carried out by Globescan for the World Economic Forum, based on interviews with more than 20,000 people from 20 countries, and published on December 14.
Trust has declined both for large national companies and for global companies, with trust in global companies at its lowest level since tracking began in 2001. Drops were sharpest in Spain, the US and Canada where net trust turned negative for the first time. Trust in global companies is strongest in China, Nigeria, Kenya, Indonesia and India.
Meanwhile Microsoft and Sony are the only businesses among the top five most trusted companies in Europe, according to PR firm Edelman’s annual Trust Barometer, launched on January 23. The remaining three are not-for-profits – Amnesty, WWF and Greenpeace. Nor is the trend is specific to Europe. While trust in business remains higher than in the media or in government, NGOs are now the most trusted institution in every market except Japan and Brazil.
More than four-fifths of American and European consumers say they refuse to buy products and services from companies they do not trust. But engaging in socially responsible activities is not necessarily the panacea – this strategy appears to be more effective for building trust in Brazil (93%) than in Europe (71%) or the US (55%).
Loss of trust in business seems to be accelerating, with NGOs more respected than companies in Europe and North America, though not yet in Asia and Latin America according to these surveys. Groups such as WWF, Amnesty and Greenpeace now routinely score higher than even the best known individual companies. In partial response, the huge growth in corporate social reporting can be seen as a rearguard action to defend declining stocks of trust.
But does loss of trust matter? Yes, according to economists who have long argued that ‘transaction costs’ increase in its absence – simplistically, legal contracts are time-consuming and expensive compared to ‘my word is my bond’. Francis Fukuyama has more recently argued that societies based more on trust, such as Germany and Japan, should be more innovative and prosperous – though recent economic trends are hardly convincing.
What these surveys don’t show is the different types of trust. Greenpeace may be trusted more to care about the planet or even to tell the truth. But would you trust them to make the brakes of your car to which you trust your life every time you venture out on the road? Or to manage your life savings so you have some hope of an adequate pension in 30 years’ time? The lesson for social report writers is this: focus on what the company actually does, and show it is doing a good job on the essentials. Rebuilding trust in companies has to centre round what they do and why they exist, not about protestations of sustainability.
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