The trust deficit

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THE BIG PICTURE

In business, it’s said that trust is currency. But if the adage is true, corporations these days might be short on cash.

A survey released Wednesday by accounting firm PwC found a jarring trust gap between business executives, employees, and customers.

In the U.S., 87 percent of business leaders said their companies were highly trusted by customers. But those customers saw things differently — across industries, consumer trust levels were only at 30 percent.

There also was a gap, though a smaller one, between employers and employees. Eighty-four percent of executives said worker trust was high at their companies. Only 69 percent of employees said the same thing.

Simply put, “business leaders tend to overestimate how much their stakeholder groups actually trust them,” PwC Vice Chair Wes Bricker told reporters.

For business, this is a problem. Trust — or the loss of it — can hurt revenue and increase employee turnover. And as corporations take on bigger roles in civil society — by accident or design — trust will be necessary for their voice to be heard.

“It’s a little bit of a warning to business. The cost of losing trust outweighs the benefits of gaining it,” PwC Vice Chair Mohamed Kande told reporters.

Most consumers surveyed — 71 percent — said they’re unlikely to buy from a company that loses their trust. Seventy-three percent said loyalty would go out the window.

And it’s not just customers at risk of walking out the door. With unemployment near its historic low and people leaving the labor force in record numbers, employees are a critical stakeholder for any company.

Among U.S. employees surveyed, 71 percent said they’d be likely to quit if they lost trust in their employer. Backing that sentiment is a 2021 survey from PwC in which 22 percent of employees said they had left a job due to trust issues.

Inflation and the pandemic seem to be affecting customer and employee priorities, PwC found. Both groups listed affordable products and good treatment of workers as their top trust determinants.

So what’s a company to do? Customers and employees say they expect C-suite executives to take the lead on building trust.

Being clear and up front on issues that matter — be it climate, employee treatment, or business conduct — can build trust with workers and customers, Bricker said.

Executives surveyed expected their corporate activity on environmental, social and governance to build trust among employees and consumers, but it isn’t moving the needle, PwC found.

Fewer than 1 in 5 consumers ranked ESG reporting as a top driver of their trust. That might be because the acronym itself is a term of art used primarly in business and capital markets and might be less-familiar to rank-and-file consumers.

“ESG disclosures are designed for a multi-stakeholder group,” Bricker said. “ESG disclosures score very high for capital providers.”

But ESG components do resonate. Twenty-seven percent of consumers strongly agreed that companies that invest in social and racial equity are more trustworthy. Twenty-three percent said corporate climate disclosure would engender trust.

The survey fielded responses from 503 business executives, 2,508 consumers and 2,002 employees in the United States from April 28 to May 13.

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Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Lorraine Woellert and Jordan Wolman. Reach us at [email protected], [email protected], [email protected] and [email protected].

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