Ipsos Corporate Reputation

Global Perspectives on Sector Reputations

Which industries are facing the greatest reputation challenges at the moment?

North America

Despite almost ten years having passed since the financial crisis, the financial services industry continues to be seen as the sector facing the greatest reputational challenge in North America, mentioned by over half (56%) of Council members; ‘there is still too much risk involved; the lingering effects of the global crisis’.

The energy sector also comes under scrutiny (mentioned by 50%), with climate change and alternative energy most mentioned as issues for the sector to address. Nominations for the pharma industry have risen slightly (now 38%). One Council member observes that ‘a handful of players have led folks to believe that this is how all companies operate. One bad apple spoils the bunch’.

Latin America

Perhaps unsurprisingly given the region’s history and geography, mining is nominated as an industry facing reputational challenges by a significant proportion (75%) of Council members interviewed in Latin America. Members say the industry faces complex challenges, needing to balance generating revenue and employment for the region, while mitigating their impact on communities and the environment; ‘through illegal mining, a negative impact was caused to vulnerable sectors, which has generated a collective feeling of rejection.’

Europe

In Europe, much as in North America, the financial services industry continues to feel the impact of the financial crisis, mentioned by six in ten (58%) as an industry facing reputational challenges. Council members also mention executive pay, cyber security, and a general lack of trust in banking as issues facing the sector, with members noting that ‘the banks will likely always feature’ because ‘fundamentally, people don’t trust the bankers’.

Mentions of energy have risen since 2016. While climate change and pricing remain issues for the sector to address, the impact of new technology (e.g. electric cars) on energy demand emerges as a new issue for the sector to take action on; ‘if we suddenly get a massive shift to electric cars, even in the next 2, 3 or 5 years…where does that electricity come from?’

Asia Pacific

The financial services industry continues to struggle in APAC, mentioned by three-quarters (73%) of Council members this year. As in other markets, the legacy of the 2008 crisis continues to impact the sector, with other mentions including mis-selling scandals and negligent consumer lending. In particular, Council members say the sector faces the challenge of communicating complex issues in a clear, succinct way; ‘their working is very opaque. And even when they try and explain, and become transparent, it’s very complex.’ As in other regions, Energy emerges as a sector of concern this year, mentioned by two-fifths (41%) of Council members. Reliability, affordability and sustainability are the key issues to address.

In full: how Reputation Council members around the world perceived each sector's reputation

Methodology: 127 interviews conducted with Reputation Council members between April and August 2017.

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The Reputation Council Report 2018: Full Report

Welcome to the latest briefing from the Ipsos Reputation Council.

This – our thirteenth sitting – has been the biggest and most international yet, involving 154 senior communicators from 20 countries.

As Paul Polman, CEO of Unilever, once said: “reputation has a habit of arriving on foot and departing on horseback”. In the past year, a welter of high-profile reputation scandals affecting businesses, their leaders and even whole industry sectors has, once again, focused our minds on the risks and rewards of this powerful but potentially volatile asset.

Some of these scandals have posed a genuine threat to companies’ continued survival or licence to operate. Others have fizzled out. In this edition, we examine how Reputation Council members distinguish between issues which might blow up into a genuine reputation crisis, and others that are just day-to-day turbulence. What indicators or early warning systems can communicators draw on, to help them build resilience?

The technology sector has been wrestling with some unprecedented reputation issues recently. Concerns around privacy, data leaks, advertising practices, AI and automation have come together to create the phenomenon of ‘techlash’. We talk to Council members about the implications for their own businesses and the lessons that communicators can learn from the way in which the technology sector is responding to techlash.

We’re also beginning to see greater scrutiny of the role that CEOs should play in external communications, against a backdrop of issues such as pay ratio reporting, gender inequality, shrinking CEO tenures and the ‘celebrity leader’. In this edition, we explore Council members’ playbook for CEO-led communications, and look at how the CCO can ensure that these communications build, rather than destroy, reputation value.

The opportunities and challenges that come with communicating in a global context is a theme we’ve examined in past editions. In this sitting, we ask Council members how they strike the right balance between global and local messaging and narratives, and how they keep a finger on the pulse of their reputation (or reputations) around the world.

Lastly, we’ve introduced some new, ‘quickfire’ sections, in which we analyse Council members’ views on a number of contentious, topical talking points, such as the death of CSR, the distraction posed by social media, the need to pick a side in a polarising society, and whether consumers will overlook poor corporate behaviour if the price is right

I hope you enjoy this edition of the Reputation Council report. Please do get in touch if you’d like to find out more about any of the issues covered or discuss how they might affect your own business.

Milorad Ajder
Global Service Line Leader
Corporate Reputation
milorad.ajder@ipsos.com

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Global Perspectives on Sector Reputations

Which industries are facing the greatest reputation challenges at the moment?

NORTH AMERICA

Media: 44%

Tech: 44%

Pharma: 31%

Despite lingering reputational issues still plaguing the financial services sector, the recent assault on media and tech means that these two industries are seen to be facing the greatest reputational challenges in North America. Each of these industries is named by 44% of Council members.

Beyond these two industries, pharmaceuticals now holds the third position in terms of reputational challenges at 31%. Cost and value continue to drive the conversation, and with the US government putting more of a spotlight on drug costs, these reputational challenges are likely to continue.

"[Media has] got a constant drumbeat of ‘fake news’, how do you overcome that?"
"These are self-inflicted wounds [in the tech industry] – companies are not thinking through the implications of their actions on their customers."
LATIN AMERICA

Construction: 50%

Energy: 41%

Mining: 34%

In Latin America, construction rises to the top as the industry facing the greatest reputational challenges this year (50%). A number of corruption charges have embroiled not only specific companies throughout the region but also politicians and civil servants.

Energy (41%) and mining (34%) round out the top three most challenged industries, predominantly due to environmental concerns and a perception that they bring limited benefits to the local markets.

"There is a public perception that mining pollutes, does not produce profits for the country, and is a group of companies that do not add local value but add value to those who extract the material and take it away."
EUROPE

Finance: 44%

Energy: 43%

Finance remains one of the industries facing the greatest reputational challenge in Europe (mentioned by 44% of Council members). In the words of one Council member, “this crisis has not been solved yet, given that the image reconstruction process appears to be very slow.”

Additional challenges for the financial services sector include cyber security concerns and emerging FinTech players challenging the traditional financial companies.

Energy also continues to face reputational challenges, cited by 43% of Council members in Europe. Issues continue to focus on environmental concerns, climate change, sustainability and consumer costs.

"When energy companies don’t immediately pass on price savings from a barrel of oil to a consumer or to a client, then the negative repercussions are there immediately."
ASIA PACIFIC

Finance: 88%

Energy: 71%

Media: 71%

Consistent with last year, the financial services industry continues to suffer reputational challenges in APAC, though mentions are higher this year at 88% (up from 73% in the last wave). Council members continue to cite the lingering effects of the financial crisis.

The energy sector is also mentioned more frequently than last year (71%), and while affordability and sustainability are still key reasons, government policy is now referenced far more frequently by Council members.

This year, media is also mentioned by 65% of Council members in APAC, with many attributing this to a changing media landscape as well as the resounding cry of ‘fake news’.

"The energy policy is a mess. Can’t separate from political environment."
"The Trump phenomenon and the constant hammering of ‘fake news’."

In full: how Reputation Council members around the world perceived each sector's reputation

Methodology: 154 interviews conducted with Reputation Council members between 25th June and 12th November 2018. Base: All Reputation Council members – Global (145), North America (16), Europe (80), Latin America (32), APAC (17).

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