Ipsos Corporate Reputation

Taking a stand – do the rewards of corporate activism outweigh the risks?

Corporate activism is both an opportunity and risk, with Council members acknowledging both sides of the debate in equal measure.
There is widespread acknowledgement that corporate activism is expected by consumers, but is also very hard to do well.
Authenticity is the key, with campaigns that are true to your corporate values having the greatest chance of success.

In 1966 Robert F. Kennedy made a speech in which he referred to a Chinese curse “may he live in interesting times”. The world was an uncertain place in the 1960s, with risk and opportunity both abundant.

It seems history is very much repeating itself as social and political disruption gathers pace, alongside the myriad opportunities being created by the digital economy.

So what’s the role of business given this backdrop? Can it be a force for progressive change in a world where anti-establishment beliefs are in the ascendancy? Or, indeed, will more companies choose to adopt a tone of ‘regressive activism’, for equally pragmatic or idealistic motives? More fundamentally, can the voice of business even be heard when the prism of fake news is applied to so much communication?

Well, Council members believe that businesses do have a licence, or even an obligation, to speak out on the big socio-political and cultural issues of the day (the environment, tolerance and diversity, and social justice are most often mentioned).

"BUSINESSES ARE PART OF THE COMMUNITY SO THEY SHOULD HAVE A VIEW. LEADERSHIP SHOULD NOT STOP AT FINANCIAL ISSUES."

This is nothing new – think of Lever Brothers, or Carnegie and Rockefeller in the US. In a world that seems more connected, but more polarised, than ever, the pressure is growing on businesses to connect with people in an authentic and meaningful way — to tackle issues that really matter to society as a whole rather than focusing purely on the bottom line.

In large part, Council members attribute this pressure to the growing expectations of customers, opinion formers and especially employees, who want to understand more about a company’s purpose and values, before they invest their money, time or goodwill. Nowadays what your business stands for is as important as what it sells. People want reassurance that businesses can be on their side, understand their issues and be prepared to fight their corner.

This is borne out by a 2016 Ipsos study across 23 countries, in which 63% of the public said they tend to buy brands that reflect their personal values – up from 54% in 2014. And in fast-growing economies such as India, China and Indonesia, the proportion was higher still.

Council members tend to agree. More than half (56%) say their consumers expect them to take a stand on socio-political issues, against a quarter (23%) who disagree.

"THEY ARE MORE SOPHISTICATED CONSUMERS AND THEY PERHAPS SEE THERE IS NOT MUCH FUNCTIONAL DIFFERENTIATION BETWEEN BRANDS, AND MAKE THEIR DECISIONS MORE ON WHETHER IT IS THE SORT OF COMPANY THEY WOULD LIKE TO BE ASSOCIATED WITH."

In reality, of course, decisions about when and how to take a particular stand are complex. But we can distil the views of the Reputation Council into five guiding principles.

1. Above all, be relevant and authentic.

Any public position must reflect the genuine purpose, values and actions of the company. To paraphrase Mark Zuckerberg, focus on the fundamentals. Trust in businesses (along with other elites) is low, there’s lots of noise, and people are quick to sniff out self-interested, trivialising or opportunistic positions.

On the other hand, a stance which is aligned with a strong social purpose that is true to your values can bring benefits beyond the purely altruistic – creating a real connection with customers, helping to attract the best talent and leading to better engagement with influencers. A clear social purpose also acts as a road map, clearly outlining the issues a business will, and will not, engage on (particularly useful guidance when resources are limited).

"AS A BUSINESS YOU NEED TO FIND THE AREAS THAT ALIGN WITH YOUR PURPOSE AND YOUR BRAND AND, AS LONG AS YOU HAVE A POLICY, IT IS EASIER TO DEFEND THE AREAS THAT YOU ARE SUPPORTING AND THE AREAS THAT YOU DON’T WANT TO GET INVOLVED IN."
2. Practice what you preach.

Any stance will lack credibility if the business can’t show a track record of action. If you’re taking a stand on diversity, you’d better be sure you measure up within your own business. And wherever possible, show the tangible value of your work to people’s lives.

The companies which Council members most admire are agents of change, not bandwagon-jumpers. Qantas’ campaign in support of same-sex marriage in Australia, despite opposition from some influential stakeholders, is cited by a number of Council members as a genuine, powerful example.

"I THINK THE CHALLENGE FOR BUSINESS IS TO COMMUNICATE THEIR ROLE IN THESE SOCIAL POLICY DEBATES IN A MEANINGFUL WAY AND NOT LOOKING PERHAPS SELF-INTERESTED, AND BEING CREDIBLE AND BEING IN IT FOR THE LONG TERM AS WELL. AND ACTUALLY BEING ABLE TO DEMONSTRATE THE VALUE OF WHAT YOU ARE DOING."
3. Don’t get party political.

Council members are strongly of the view that companies should avoid
issues which are closely aligned with party political agendas – at least publicly. In the main, such themes (Brexit and the Trump presidency are mentioned a lot) are seen as too polarising, too short-term and above all too risky for corporates to get embroiled in. But as major social and cultural movements become increasingly politicised, this may be a fine distinction for activist companies to negotiate.

"I DON’T THINK THAT COMPANIES SHOULD GET INVOLVED IN POLITICS, THAT IS NOT WHAT WE DO AND IT IS NOT WHAT WE SHOULD DO… I DON’T WANT TO BE TOLD BY MY EMPLOYER OR BY THE COMPANIES I INVEST IN HOW I SHOULD BE VOTING."
4. Understand the risks.

Taking a bold stand will be inherently divisive, and can be a bruising experience. It might bring rewards, but it will definitely carry risks. Three in five Council members (59%) believe the benefits of taking a stand are greater than ever. But three quarters (77%) say the risks are greater too. So it’s important to be selective. But if an issue lies at the heart of your corporate purpose, and the expectations of your stakeholders, then not speaking out may be the bigger risk.

 

5. Not every company has to be a direct social activist.

Council members often have to think about how a particular position will play out in different global markets, or among stakeholders with conflicting expectations, or have to work within regulatory restrictions on what they can say.

These businesses may have less of an appetite for controversy, perhaps preferring to engage collectively via trade associations or industry bodies. However, is important to bear in mind that they still feel they are engaging constructively on important issues – perhaps not taking such an overt, confrontational stand, but still having a principled point of view and being part of the discussion.

"FOR GLOBAL ORGANISATIONS, YOU HAVE TO WEIGH UP THE CONSEQUENCES TAKING A STAND IN ONE PART OF THE WORLD WILL HAVE ELSEWHERE, AND ONE ALWAYS HAS TO DEAL WITH THAT AMBIGUITY."

Final thoughts

Activist consumers and stakeholders increasingly demand to know where corporations stand on the issues which matter to them. They are looking for leadership that places social progress (in whatever way they define it) at the heart of the corporate agenda.

However, speaking out carries risks and can be divisive. But if it genuinely reflects the social purpose and values of the business, and is backed up with evidence of action, the reward can be a powerful, positive impact on reputation and relationships.

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

Read more from the Reputation Council...

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Amid the uncertainty of the pandemic, the S of ESG is coming under greater scrutiny

Actions on E, S and G in tandem remain essential to corporate reputation

As ESG has surged up the consumer agenda, new Ipsos data shows that improving society is identified as the top priority for multinationals among consumers across the globe – perhaps not surprising given the social implications of the pandemic. While fundamental issues such as safe working conditions are seen as most important here, each company should carefully consider how to adapt its operations to improve sustainable business practice. Companies should continue to pursue actions on all three pillars of ESG though. Not just because E and G remain critical in the public’s eyes, but also as it – as we should all know now – makes good business sense to do so.

Companies’ role in creating shared value

Companies are increasingly assessed on the extent to which they bring ‘net benefits’ to society. Especially among the financial community and the media there is a focus on ESG: companies’ performance on Environmental, Social and Governance (ESG) issues that come with doing business. Not just because you ultimately shoot yourself in the foot if you run out of the natural resources you need, treat your staff unfairly, or become wound up in corruption scandals. No, also because doing the right thing has BECOME a source of value creation. Not least, this is because we – ‘the public’, consumers and employees – pay more attention to what companies do or stand for than we did a decade ago – be that their efforts to increase staff diversity & inclusion, meeting net zero goals, or paying their fair share of taxes.

In March 2021 Ipsos asked consumers across 28 markets to rank ESG priorities for multinationals. While all three aspects, ‘E’, ‘S’ and ‘G’, were seen as important, improving society (S) came out as the top priority, with 41% of the votes globally. Protecting the environment (E) followed at 31%, almost on equal footing with practicing good governance (G, 28%).

In 22 out of the 28 countries surveyed, improving society received the most picks as the top priority, with a majority of the vote share in Spain (54%), Poland (52%), Japan (52%) and Korea (50%).

These findings are not surprising in the context of COVID-19. Health & safety precautions in the workplace, as well as a desire for job security amid economic uncertainty, have, for many, become necessary concerns.

How should companies engage with the ‘S’?

Given the increased focus on the role of companies to contribute socially, where should they focus their efforts on the ‘S’ pillar of ESG?

Looking at which societal issues people want multinationals to address, our survey shows that improving working conditions and worker health & safety come top. This is true across all regions, from Europe to APAC, to Middle East-Africa, to LATAM through to North America. Potentially contributing here are new COVID-related concerns about ventilation, social distancing, face masks at work etc., on top of existing issues.   

Despite ample attention across (social) media for issues around gender equality and diversity, these topics came out lower down the list. Again, this holds true when looking in detail at the answers from people across different parts of the world. 

It’s impossible to give a blank slate answer to how companies can best create shared value on ‘S’. The priorities in the eyes of consumers listed above, give an idea. But what that means for each individual business is something that needs careful consideration. That’s why it’s so important for companies to engage with their stakeholders on these issues. Employees who feel their employer looks after them, will be more willing to go the extra mile: a ‘give’ for the ‘get’. Local communities who see that companies take their interests at heart, will be more open to dialogue and working together to create mutual benefits. Etcetera.

Ipsos advises businesses on how they should address ESG challenges and helps them to define, manage and communicate their priorities. A relevant example to multinationals is our advice on how to frame “benefits” of ESG strategies to consumers. As people aren’t driven by sustainability claims alone to take action (as they often feel they are doing enough already), it is most effective to couple these to an extra incentive personal to them. So instead of saying: “switch to renewable energy to reduce your carbon footprint” position this as “switch to renewable energy will save you money AND help you reduce your footprint”.

Finally, what’s left to say is that, as I have said before, investments in ESG issues should be financially responsible and prudent in their own right, giving shareholders a return on investment. Ultimately, genuine progress on ESG will help to protect companies’ social licence to operate and bolster their reputation.

For more information please contact:

Marloes Klop
Research Director, Corporate Reputation

Marloes.Klop@ipsos.com

Technical details about the survey

These are the results of a 28-market online survey conducted by Ipsos on its Global Advisor platform. Ipsos interviewed a total of 14,000 adults aged 18-74 in the United States, Canada, Malaysia, South Africa and Turkey, and 16-74 in 23 other markets. The survey was fielded between 19 February and 5 March 2021.

The sample consists of approximately 500 individuals in each of Argentina, Australia, Belgium, Brazil, Canada, China (mainland), Chile, Colombia, France, Germany, Great Britain, Hungary, India, Italy, Japan, Malaysia, Mexico, the Netherlands, Poland, Peru, Russia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the US.

The samples in Argentina, Australia, Belgium, Canada, France, Germany, Great Britain, Hungary, Italy, Japan, the Netherlands, Poland, South Korea, Spain, Sweden and the US can be taken as representative of their general adult population under the age of 75.

The samples in Brazil, Chile, mainland China, Colombia, India, Malaysia, Mexico, Peru, Russia, Saudi Arabia, South Africa, and Turkey are more urban, more educated, and/or more affluent than the general population. The survey results for these markets should be viewed as reflecting the views of the more “connected” segment of their population.

The data is weighted so that each country’s sample composition best reflects the demographic profile of the adult population according to the most recent census data.

Where results do not sum to 100 or the ‘difference’ appears to be +/-1 more/less than the actual, this may be due to rounding, multiple responses, or the exclusion of “don’t know” or not stated responses.

The precision of Ipsos online polls are calculated using a credibility interval with a poll of 500 accurate to +/- 4.8 percentage points. For more information on the Ipsos use of credibility intervals, please visit the Ipsos website.

The tech sector always bets that product quality will override privacy concerns

Probably the most common criticism levelled at the tech sector is the one about privacy – the sense that the tech sector, or government enabled by the tech sector, are collecting far more data on individuals than they should, and that the data is then being sold or used for unclear purposes. While the tech sector sticks closely to its cherished, and well-proven, ideology that positive user experience nearly always mitigates these concerns in practice, it is also true that the concerns of pro-privacy groups within society, and government, are getting louder and more prominent.

Stark evidence of this can be seen across two, relatively recent, product launches. Both of which have attracted major criticisms from privacy and digital rights campaigners, while at the same time being major commercial success stories.

Concerns around business and government use of personal information is high on a global scale

Let’s look at those concerns first – the 2020 Ipsos Global Trends survey[1] shows in stark detail the level of concern that exists around the world about what is being done by companies and governments using the personal data being collected from people when they go online.

A rise in private sector surveillance

So, bearing such concerns in mind, let’s examine the news coverage of Amazon’s Ring product line over the last few weeks. Ring is a video doorbell system, which seems innocuous, but with millions sold what you end up with is a potential surveillance network the size of which has never been seen before, and all in the hands of Amazon. And what has Amazon done with it? For one it initially entered into partnership with a large number of law enforcement agencies in the US that allowed them access to the videos it records without a warrant being required[2]. To quote from the Guardian, because of Ring “law enforcement are given a backdoor entry into private video recordings of people in residential and public space that would otherwise be protected under the fourth amendment”. While Amazon has recently extended its moratorium on sharing its facial recognition software with police, a ban it says that will stay in place until Congress creates the appropriate safeguards, it is puzzling why a similar approach to sharing data with law enforcement has not been adopted with Ring. Especially given the high-profile critique of the product by former Amazon software engineer Max Eliaser;

“The deployment of connected home security cameras that allow footage to be queried centrally are simply not compatible with a free society. The privacy issues are not fixable with regulation and there is no balance that can be struck. Ring should be shut down immediately and not brought back[3]

Now Amazon can certainly say that they are following the law as it exists and that the capabilities and requirements of the Ring product are all made available to the consumer at the point of sale. Amazon has acknowledged some of this controversy and has consequentially changed how police ask for video content, now requiring the police to ask for footage via the Ring Neighbors app, allowing local users to comment or assist as they judge best[4]. However, to a background of high consumer concern about how personal data is being used and with Ring cameras being described as “a threat to privacy at best and a danger to society and democracy at worst[5]”, critics may accuse Amazon of not thinking product features through a bit more carefully. That said, when they have a product that has shifted many millions of units in the US alone it is clear that, as ever, product utility quashes privacy concerns at point of purchase. A fact underlined by the 4.6 rating the Ring 3 has on Amazon.com, a rating based on 33,000+ reviews.

From surveillance to tracking

Enough with Amazon, I hear the tech fans cry, that’s just one of the major brands. Well, let's turn to Apple and its brand-new gadget - the AirTag. A device sold as the means to find things you have lost, via a Bluetooth signal that alerts sympathetic devices that are web-enabled. Perfect for finding your luggage, your car, or, as has been pointed out by a wide range of news agencies, the person you are stalking.

Apple has attempted to build in safeguards to prevent “unwanted tracking” but the slew of media coverage over the last few weeks that point out how ineffective those safeguards are in practice probably shows how little thought the designers of this product put into thinking about the downsides of this product compared to the potential upsides. The warning sound that alerts the user to unwanted tracking is easily missed, and while people with an iPhone might be able to find unwanted AirTags those with Android phones cannot (right now).

While plenty of apps, charmingly called “stalkerware”, exist to help one person track another, and there are other products similar to AirTags where the manufacturers have put far less effort into stopping them from being used for nefarious purposes than Apple has. However, part of the surprise here is that, as The Washington Post articulates well “AirTags show how even Apple, a company known for emphasizing security and privacy, can struggle to understand all the risks involved in creating tech that puts everyday things online[6]. This disconnect between a company that is often praised for its firm stance on personal privacy and the potential misuse of this product is vast and easily fixed with little effort. As Wired suggests “Apple leadership needs to give abuse survivors and experts a central place in its development process, incorporating their feedback from the start. Otherwise, the company will continue to make products that endanger people more than they help[7]”.

Responding to this wave of criticism[8] Apple has announced some changes – reducing the amount of time before an AirTag starts beeping once it is away from its owner's iPhone and promising an Android application as well. Just like Amazon with Ring its good to see Apple responding to the issue, but it again raises the question of how a product like this got to market with these issues when Apple usually takes these issues so seriously. That said, just as with Amazon’s Ring it is highly likely that this product will sell incredibly well despite any privacy concerns due to its sheer usefulness. In fact one industry analyst in Forbes[9] confidently predicts its success, and possible billion dollar revenue for Apple, due to the vast number of devices the product can connect to and the popularity of the Find My app among Apple product users.

Consumers value privacy – as well as products that make their lives easier

Ultimately the tech sector knows its customers very, very well and knows that while there are people who may not buy these products because of privacy issues there are far more people who will ignore those concerns and buy them anyway. Negative media coverage of the like described above will have very little impact on the level of individual customers. That said, increased media focus on perceived privacy issues reinforces some of the negative reputational themes that affect the tech sector and the brands within it and are currently fuelling many of the debates that are ongoing around the world among legislators thinking of new regulation. Innovative new products that skirt the edge of what is appropriate, or legal, when it comes to privacy is one thing, as long as they are profitable, but fuelling the fires of regulation is another. The tech sector may want to ponder this.

Article links

[1] Markets: Argentina, Albania, Australia, Belgium, Brazil, Canada, China, Chile, Colombia, Denmark, France, Germany, Great Britain, India, Indonesia, Italy, Japan, Mexico, Peru, Poland, Russia, Romania, Serbia, Saudi Arabia, South Africa, South Korea, Spain, Sweden, Turkey, and the United States. 

Method The survey for the 2020 edition was carried out online using the Ipsos Online Panel, and face to-face interviewing in Albania, Montenegro and Serbia. The results are weighted to ensure that the sample’s composition reflects that of the adult population according to the most recent country census data. Total global data has not been weighted by population size, but are simply a country average.

Fieldwork dates June-July 2019

[2] https://www.theguardian.com/commentisfree/2021/may/18/amazon-ring-largest-civilian-surveillance-network-us

[3] https://amazonemployees4climatejustice.medium.com/amazon-employees-share-our-views-on-company-business-f5abcdea849

[4] https://www.cnet.com/home/security/rings-police-problem-didnt-go-away-it-just-got-more-transparent/

[5] https://thenextweb.com/news/amazon-engineer-ring-should-be-shut-down-immediately-and-not-brought-back

[6] https://www.washingtonpost.com/technology/2021/05/05/apple-airtags-stalking/

[7] https://www.wired.com/story/opinion-apples-air-tags-are-a-gift-to-stalkers/

[8] https://www.bbc.co.uk/news/technology-57351554

[9] https://www.forbes.com/sites/timbajarin/2021/04/20/airtags-are-apples-next-billion-dollar-business/?sh=4f60c605d187

For more information please contact:

Carl Phillips
Director & Global Stakeholder Research Lead, Corporate Reputation

Carl.Phillips@ipsos.com