The Trust Economy

The Trust Economy

‘Polman had a sharp message for short-term shareholders. “Unilever has been around for 100-plus years. We want to be around for several hundred more years. So if you buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable, then come and invest with us. If you don’t buy into this, I respect you as a human being but don’t put your money in our company.”’

 

In 2013, trust in leaders hit an all time low. In 2016, trust is still in crisis – and we’re more divided – as a nation and as a family of global democracies – than ever before. So what is to be done, and who is to do it?

 

This year’s Annual Edelman Trust Barometer gives us three key insights.

 

Firstly: while trust in the four institutions of society – Government, NGOs, Media and Business – is generally up from 2015, trust between the elite and the mass population is more polarised than ever before. In the UK, there is now a 10 point gap between the institutional trust felt by elites and the masses – a gap which jumps to 19 points between the top and bottom quartile earners – reinforcing, once more, the signs of the divided Britain which fuelled the Brexit fire.

 

The second: Business trust is significantly up. For both the informed and the general public, Business commands more trust than Government in 21 of 28 surveyed countries. Business trust is rapidly closing the gap to match NGOs, the consistently most trusted institution. Moreover, In times of rapid and often bewildering change, Business is more trusted than any other institution to help us navigate and innovate, with Tech, Food and FMCGs industries topping the list.

 

The third: though trust in CEOs still lags far behind that in experts or in peers, 2016 saw the biggest overall rise in CEO trust.

 

The mandate is clear: 80% of the general population now agree that ‘a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates’ – and believe the CEO must be visible in discussing social issues.

 

Now more than ever, Business must show social leadership. As consumers increasingly seek out certainty and reward businesses accordingly (68% buy from trusted companies; 59% recommend them to friends and family – now the most trusted sources of information; and 41% would share positive opinions online – fuelling the search engine results that constitute our most trusted sources of media), the opportunity for enlightened leaders is vast.

 

Unilever CEO Paul Polman knows better than most that long-term sustainability goes hand in hand with long-term profit. The recent FT feature on his leadership reminds us that his first act as CEO in 2009 was to abolish the quarterly results that fuel short-term decision making – the sign, for many, of an entirely ‘new business model’, and a sign of what was to come on its journey of profound mission-led realignment. ‘“When I came here,” Polman remarked, “we were only 10 per cent sustainable. Now we’re 65 per cent sustainable.”

 

But more important than the success, the feature also foregrounds the difficulty of change, and the grit it demands of its champions. The article notes a recent July Oxfam report on Unilever’s labour practices in Vietnam which identified ‘“a number of critical challenges in translating the company’s policy commitments into practice”’, the overambitious targets of its Sustainable Living Plan, which have since been dramatically revised, and accusations of mercury contamination at a former thermometer factory in south India.

 

Despite the set-backs, the company this year placed first in both Oxfam’s Behind the Brands ranking for small farmers, women’s rights, the use of land and water and greenhouse emissions’, and the Fit for Purpose Index – for the second consecutive year. Experts remain convinced of Polman’s overall contribution. Colin Mayer, professor of management studies at Oxford university’s Saïd Business School, believes Polman ‘“has demonstrated immense courage and vision in promoting a concept of the purpose and function of business that initially met with considerable resistance, bordering on hostility, from several quarters.”’

 

Above all else, Polman exemplifies the tenacity of the true change maker, who knows, beyond doubt, that Perfect is the enemy of Good. “Are we doing everything right? For sure not. Are we optimising it? For sure not. Are we on the journey? Probably 40 per cent.”