Businesses must act on global warming and other issues to narrow a general trust gap between them and the public.
Sheila M. J. Bonini, Greg Hintz, and Lenny T. Mendonca
Business executives are catching up with consumers in expressing concern about global warming and other environmental issues, two global surveys indicate.1 In a sea change over the past 12 months, executives now regard the environment as the sociopolitical issue that will attract the most attention, by far, from the public and politicians over the next five years.
Taking action on global warming and other environmental issues seems critical for narrowing a general trust gap between consumers and corporations. Yet this kind of activism will not be a panacea for companies hoping to address the growing societal expectation that business should contribute more to the broader public good.
Consumers also want healthier and safer products, retirement and health care benefits for employees, and much else besides, though their expectations vary by industry and geography. What’s more, they say clearly that the performance of an industry or a company on a wide range of societal issues affects not only its reputation but also their willingness to buy its products. Each corporation faces a wide range of risks specific to the industries, regions, and countries in which it operates. But our surveys also reveal that companies have significant opportunities to differentiate themselves and to increase shareholder value by acting responsibly to improve their reputations and by providing products and services that address the consumers’ concerns.
A gap between executives and consumers
As in our two earlier global surveys,2 almost 90 percent of consumers and 85 percent of executives believe that large corporations should play a broader role in society. Clear majorities say that companies and governments should have an equally important role in handling sociopolitical issues. Yet a wide gap remains between the way executives and consumers in Europe and North America view the overall contribution large corporations make to the public good. While seven out of ten North American executives describe that contribution as mostly or somewhat positive, only four out of ten consumers agree. In Europe, the gap is even wider: it represents both an opportunity and an imperative for companies to improve their reputations. By contrast, in developing markets seven out of ten executives and consumers alike take a positive view of the contributions business makes to society.
Executives and consumers are now equally concerned about environmental issues, including climate change. Fifty-one percent of the executives—up 20 percentage points from 2006—pick it as one of three sociopolitical issues that will attract the most attention during the next five years. Among consumers, 55 percent agree, a five-percentage-point increase since the previous survey. The rise to prominence of environmental issues appears to reflect the intense publicity and debate about greenhouse gases. Indeed, almost 90 percent of executives and consumers say they are personally very or somewhat worried about global warming, and clear majorities see a role for government as well as business and consumers in tackling climate change.
But business hasn’t yet tuned in to many other issues that consumers find important. Roughly one in three of them identifies demand for healthier and safer products, pension and retirement benefits, and health care benefits as the other most important questions. Executives, on the contrary, pick privacy, data security, and job losses from the movement of jobs overseas (Exhibit 1). The continuing gap between what executives and consumers regard as most important might help to explain why only 14 percent of the executives—a level unchanged since the previous survey—believe that large corporations in their industries do a good or adequate job of anticipating criticism.
