The trust deficit

Presented by The American Beverage Association:

Jun 16, 2022 View in browser   By Lorraine Woellert Presented by 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.   A message from The American Beverage Association: At America's beverage companies, we are committed to reducing our plastic footprint. That's why we're carefully designing our plastic bottles to be 100% recyclable, including the caps. Our goal is for every bottle to become a new one, so they don't end up in our oceans, rivers and landfills. Visit EveryBottleBack.org   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.   A message from The American Beverage Association:   YOU TELL US Tomorrow is World Day to Combat Desertification and Drought. In observation of that clunky U.N.word salad, here's a primer from the Center on Biological Diversity on the new language of drought in the U.S. Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Lorraine Woellert and Jordan Wolman. Reach us at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com and jwolman@politico.com. Sign up for the Long Game. Four days a week and still free. That's sustainability!   A message from The American Beverage Association: America's leading beverage companies - The Coca-Cola Company, Keurig Dr Pepper and PepsiCo - are committed to reducing our industry's plastic footprint through our Every Bottle Back initiative. Learn how our bottles are made to be remade: Made to be remade: We're carefully designing our plastic bottles from PET, which is the most valuable and recyclable plastic available. Community recycling: We're investing in communities across the country to improve recycling infrastructure, so even more of our bottles can be collected and remade into new bottles. Not all plastic is the same: Our bottles are sorted and separated from other plastics, so they can be cleaned and ground into pellets to make new bottles. Closed loop: We use the recycled plastic to make new bottles, reducing the amount of new plastic we use and preventing our bottles from ending up in the environment. Learn more about our efforts at EveryBottleBack.org   WHAT WE'RE CLICKING — Europe's carbon border tax won't be confined to that continent. POLITICO's E&E explains why the U.S. is preparing. — Did Latino immigrants save the American city? Governing interviews Penn State University professor and author A. K. Sandoval-Strausz. — A bee census in California delivers disturbing news. Researchers at The University of California-Riverside have the results.   DON'T MISS THE 2022 GREAT LAKES ECONOMIC FORUM:  POLITICO is excited to be the exclusive media partner again at the Council of the Great Lakes Region's bi-national Great Lakes Economic Forum with co-hosts Gov. JB Pritzker and Mayor Lori Lightfoot. This premier, intimate networking event, taking place June 26-28 in Chicago, brings together international, national and regional leaders from business, government, academia and the nonprofit sector each year. "Powering Forward" is this year's theme, setting the stage to connect key decision-makers with thought leaders and agents of change to identify and advance solutions that will strengthen the region's competitiveness and sustainability in today's competitive climate of trade, innovation, investment, labor mobility and environmental performance. Register today.       STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.       Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Lorraine Woellert @Woellert Jordan Wolman @jordanwolman   Follow us

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