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How corporate reputations have helped brands survive the pandemic

Corporate reputations have helped companies secure shareholder value through the pandemic, and now account for one in every three pounds on the UK’s stock market.

Company reputations constitute more than a third of the combined market capitalisation of the FTSE 350, worth £823 billion of shareholder value at the start of this year, according to the latest results from intangible asset specialist Reputation Dividend.

Based on the detailed study of the stock market every year since 2009, Reputation Dividend analysts found that corporate reputations have played a major part in protecting value through the crash, minimising the scale of the decline and fuelling the recovery so far.

The financial value of corporate reputation in the FTSE 350

Unilever leads, with Astra Zeneca in second place

Reputation contributions for all listed companies were mainly positive this year, with as much as 56.6% for Unilever in top place, indicating value creation over the pandemic.

However, in close to 20 cases they were sufficiently poor as to be a drain on companies’ market caps, and costing shareholders accordingly.

The most impactful corporate reputations in the UK

According to Reputation Dividend’s founder Simon Cole: “Once the initial shock of the pandemic downturn had subsided, investor attention turned to corporate qualities that not only suggested companies are well placed to ride the storm but also, and critically, best positioned to capitalise on the up-turn as and when it comes. The reputational drivers for this recovery include high quality of goods and services, a focus on innovation and, as companies start to plan for the upturn, securing the right kind of talent.”

The study added that whilst some industries have been hit particularly hard – hospitality, travel, oil – others have benefited from a combination of rising demand and expectation. Sandra Macleod, director at Reputation Dividend concludes: “Reputations will need to carry on playing a major part in order to see companies through to the eventual recovery. Companies need to mobilise their reputations now in order not to miss the boat.”

The full results are available here.

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