PR Research 5 minute read
Lego, IKEA and Microsoft are considered the most responsible companies by the UK general public according to research from reputation consultancy Reputation Institute, based on over 50,000 interviews.
The top ten most reputable companies in terms of CSR are:
|Rank||Company||2016 RepTrak® score|
|4||John Lewis Partnership||78.0|
|7||The Estée Lauder Companies||77.7|
|10||The Walt Disney Company||77.2|
The industries with the best perceived CSR practices are consumer products, healthcare and industrial products. Financial services, transport and the energy sectors have the worst CSR scores.
|The following companies have seen the largest improvements from 2015 to 2016:||The below businesses have seen the largest declines from 2015 to 2016:|
|· Burberry Group (+10.6) now ranked 56th||· Volkswagen (-28.9 points) now ranked 180th|
|· HSBC (+9.8 points) now ranked 158th||· Daimler (Mercedes-Benz) (-7.9 points) now ranked 94th|
|· Campbell Soup Company (+9.7 points) now ranked 24th||· EDF (-7.7 points) now ranked 172nd|
Following the emissions scandal Volkswagen’s score dropped by 28.9 points overall, and by 37.7 points in the “Governance” dimension.
UK companies are not seen as the kindest
Of the ten companies perceived to have the best CSR practices, John Lewis Partnership and Rolls-Royce Aerospace are the only two that are UK-based. John Lewis came in at number four and has been in the top 10 for the last three years; Rolls-Royce is fifth (it was third in 2015).
Commenting on why Brits do not rank British business, Kasper Ulf Nielsen, executive partner at Reputation Institute, says: “This reveals a lack of both emotional and rational connection with businesses which is unique to the UK. Across the world, companies in their home countries tend to have a stronger reputation, and this lack of reputation capital puts UK plcs at a disadvantage in their home market.”
Good reputation, but not for being ethical…
Over a third of companies have significantly underperformed on CSR perceptions when compared with the overall emotional connection consumers have with the company (as measured by the Reputation Institute). For instance, Amazon has an excellent reputation score, but falls down when consumers are asked about its ethics. Daimler (Mercedes-Benz) and Aldi suffer similarly.
One reason for this is that the UK general public has a greater understanding of companies’ products and services, innovation, leadership team and company performance, than they do about CSR initiatives: 27% of the UK general public are unaware of how companies treat their workforce; 22% do not know what businesses are doing in terms of “Citizenship” (support of good causes, positive societal influence and environmental responsibility); and 18% are uninformed about “Governance” principles (openness and transparency, ethical behaviour and fair business practices).
Nielsen adds: “Weak CSR scores for companies who have strong overall reputations demonstrate that doing good remains difficult to communicate well enough for it to stick in the minds of consumers. Amazon, Daimler and Aldi are proficient at communicating with their key stakeholders, as seen by their overall scores, but are really struggling to come across positively in terms of Governance, Workplace and Citizenship, leaving them open to reputation risk.”
Why it matters
An example of one company’s downfall that highlights the importance of being seen to ‘care’, is Sports Direct. Following Sports Direct’s reputational crisis, the company has a weak CSR percpetion scorescore of 53, and a score of just 43 for the “Workplace” dimension. The company has dropped out of the FTSE 100 and had £1.6 billion wiped off its value, this shows how consumers are choosing not to buy Sports Direct products as a result of its poor workplace practices hitting the headlines.
Reputation Institute’s research reveals that reputation drives business results. The better the reputation, the more support a company gets. For companies with an Average reputation, only 12% would definitely buy the products; this climbs to 28% if the reputation is Strong, but increases to 76% if the reputation is Excellent. As Nielsen concludes: “The UK public are beginning to care more and more about businesses’ social and environmental footprints. Looking at the examples of Sports Direct and Volkswagen, arguably two of the largest reputational crises in the last year, both experienced reputational damage in terms of CSR, and both have seen a blow to their reputations alongside a significant financial impact.”
The CSR RepTrak system measures a company’s ability to deliver on stakeholder expectations across three dimensions of CSR: “Citizenship” (support of good causes, positive societal influence and environmental responsibility), “Governance” (openness and transparency, ethical behaviour and fair business practices) and “Workplace” (fair employee rewards, employee wellbeing and equal opportunities).