How do Businesses Build Consumer Trust?
For the first time, businesses are the most trusted institutions in the world compared to governments and media, according to the 2022 Edelman Trust Barometer. Trust in businesses is fragile, though. Trust in businesses has actually dropped since Edelman conducted the 2021 Trust Barometer, but trust in governments and media have dropped even more, largely because of a perception that democratic governments around the world have failed to fight the coronavirus pandemic effectively. The 22nd annual barometer, which is based on an annual survey of the global population, concludes that people want businesses to play a larger role on climate change, economic inequality, workforce reskilling and addressing racial injustice.
Key Findings of the 2022 Edelman Trust Barometer
- Trust in all news sources has dropped, except for owned media (43 percent), which rose one point. Social media experienced the sharpest decline followed by traditional media and search engines (59 percent) at three points. Concern over fake news being used as a weapon has risen to an all-time high. The most believable source of information is communications from “my employer.”
- Government officials and journalists are the least trusted societal leaders “My coworkers” and scientists are most trusted – with nearly identical levels of trust demonstrated.
- Corporate values influence trust in businesses. Nearly 60 percent of consumers say they buy brands based on their values and beliefs. Almost 6 in 10 employees choose a workplace based on shared values and expect their CEO to take a stand on societal issues. 64 percent of investors look to back businesses aligned with their values.
- More than half of respondents say capitalism does more harm than good in its current form.
What Businesses Should Do
- Employ a coherent ESG strategy. Businesses should report credible evidence of how they embrace environmental, social, and governance (ESG) issues. Businesses have been discussing ESG for years. But they’ve not done so coherently. They’ve treated ESG as a communications issue for investors only. Businesses should talk about ESG across their entire sites, through PR, social media, and everywhere people interact with their brand. Doing so will require businesses to coordinate ESG communications more strategically and comprehensively.
- Share evidence on how they’re helping society by tackling compelling issues such as sustainability and racial justice. It’s important that companies report credible, transparent data on how they’re making the world better, which is the driving force behind the stakeholder capitalism movement. For example, Ford’s Integrated Sustainability and Financial Report 2021 does a comprehensive job reporting on the company’s financial success alongside its positive impact on society, such as reducing its carbon footprint. For instance, as reported in our own benchmark for ESG communications, The New ESG Agenda, Johnson & Johnson’s annual “You Belong: Diversity, Equity & Inclusion Impact Review” reflects on the company’s diversity, equity and inclusion journey, which includes specific ways the company is implementing a diversity, equality, and inclusion (DEI) strategy. The 50-page report is comprehensive, covering everything from how Johnson & Johnson incorporates DEI in supplier relations to the link between DEI and innovation. In addition, a business can build trust by making issues such as ESG less conceptual and more real through vivid examples. A great case in point is Swedish electric bike company Cake, which combines a compelling website and effective PR to discuss how the company fights illegal wildlife poaching in Africa.
- Humanize their approach. We noticed how often respondents to the Edelman survey placed more trust in their coworkers and employer as credible sources of information. Businesses are not faceless institutions. They comprise people, starting at the management level. Corporations should lean into their people to be thought leaders on topical issues such as sustainability. For example, Claudio Descalzi, CEO of Eni SpA, communicates regularly about ESG issues on his LinkedIn page (which has more than 37,000 followers), he contributes articles, and he discusses sustainability with the news media. Similarly, Ulf Mark Schneider, CEO of Nestle, discusses openly Nestle’s goals and progress toward being a sustainable company. When CEOs do this, they use their high-profile positions to hold their own companies (and entire industries) accountable for their actions. But this kind of open communication needs to happen across all levels of the organization, and for that to happen, employees must feel empowered to do so. Google is a good example of a company that encourages LGBTQ+ employees to discuss their own journeys at a personal level and Google’s at a corporate level – as shown through this blog post from Juan Rajlin, an executive sponsor of PRIDE at Google.
To be clear: businesses have a lot of work to do in order to build trust. For example, we recently studied how well businesses share their sustainability practices on their websites. Of the 100 companies we examined from the New York Stock Exchange 100, only 10 companies provide any quantification of their sustainability ambitions. Only 44 percent have a dedicated climate
change or carbon reduction page. Only 17 percent of companies provide an assessment of the major non-financial risks to their business, with only half of these companies quantifying the extent or impact of those risks. Meanwhile, only 15 percent of the NASDAQ 100 explain their sustainability strategy online.
Contact Investis Digital
We discuss this shift and strategies for how brands can build trust and relevancy in a report Building Trust through the 4Rs: Responsibility, Reputation, Recruitment, and Reach. This thought leadership offers companies a blueprint to build trust by connecting with the personal values of job seekers, investors, and consumers. It’s based on our work designing and implementing communications strategies through our Connected Content approach. Contact us to learn more.