The Institute of Public Policy Research (IPPR) is calling for Britain’s businesses to urgently address their lack of consumer trust to ensure sustained future growth and success. Following the launch of a Government consultation into corporate governance – which aims to strengthen customer voices in the boardroom – new research from IPPR, commissioned on behalf of Siemens, finds UK businesses facing a startling trust gap when it comes to how consumers perceive them.
The findings show only a fifth of consumers (22%) think businesses are likely to do the right thing in their community, with nearly two thirds of people (60%) saying companies focus too much on making money and not enough on giving back to society. However, nearly four fifths of people (79%) still believe that profitable businesses are important for local communities and society as a whole.
There are specific issues that are affecting consumer trust. 38% of people think businesses, large and small, don’t pay their fair share of taxes in the UK and 41% of people don’t trust companies to look after employee pensions.
Yet, benefits can be gained from addressing these negative perceptions. Over half of people (54%) say they are more likely to buy from businesses that behave responsibly, and 28% consider business ethics when looking for a job, suggesting giving back to society can both create growth and attract talent.
Michael Jacobs, Director of the IPPR Commission on Economic Justice, said:
“The country is experiencing tremendous economic uncertainty today, but one clear certainty is that our economy cannot grow, create jobs and raise incomes without successful businesses. This poll is a wake-up call to businesses to show they cannot take public support for granted. Many companies need to raise their game to ensure they survive these uncertain times and to forge a successful model for success in post-Brexit Britain.
“The best businesses are already showing how to be socially responsible. Others need to follow suit. Companies don’t just need to behave responsibly – paying their taxes, paying decent wages, providing skills training, building local supply chains – they need to be actively seen to be doing so. As companies like Siemens have shown through its support of 500 apprentices, as well as commitment to buying from locally-based suppliers, the result can only benefit businesses, enabling them to attract talented employees and win public support.”
When it comes to what businesses can do to give back to their communities, more than one third (36%) of people think investing in the UK’s future workforce is one of the most important ways business can help society prosper. However, a similar number (33%) of those asked do not feel companies are currently doing enough to invest in young people.
Offering young people work placements and apprenticeships, as well as providing education, training and skills partnerships, were deemed essential for the nation’s companies to positively impact local communities. More than three quarters (77%) ranked the provision of work placements or apprenticeships for young people in their top five most important things businesses should do to give back to their community.
Top 5 things business can do to give back to society:
1. Offer young people jobs or training 77%
2. Buy goods and supply locally 64%
3. Offer education, training & skills with schools 60%
4. Invest in research and development 47%
5. Offer business advice/mentoring/skills to small businesses and start ups 43%
18% of people would prioritise buying goods and supplies locally as a way for a business to give back to the community.
Juergen Maier, CEO Siemens UK, said:
“Right now we are at an all-time low when it comes to public confidence in all UK businesses and their ability act responsibly. Unless a business fundamentally believes in creating social value and being an integral part of the community, it simply won’t succeed. We need to understand what can be done to address this, to move business closer to society. Not only is this absolutely the right thing to do; it is also essential in listening to customers and employees who want to be socially responsible through their own work and wider activities, as well as attracting new employees who share those values. For instance, at Siemens we ensure that almost £300 per each of our 14,000 UK employees goes straight to community projects, and our education initiative The Curiosity Project inspires five million children to continue STEM education each year.
“Big and small businesses must be a force for good to really improve society, but big businesses need to work harder at this given too many high-profile examples of not getting it right in the past. This is particularly significant given global events and where we’re finding ourselves politically, showing a clear disconnect between business and society.”
The poll also revealed that nearly three quarters of people (74%) want more UK manufacturing to be undertaken locally.
The polling was commissioned on behalf of Siemens as part of the IPPR Commission on Economic Justice. Launched by the IPPR last month (November), the Commission brings together people from business and trade unions, civil society organisations and academia – including CEO of Siemens UK Juergen Maier – to examine the challenges facing the UK economy and make practical recommendations for its reform so it works for a post-Brexit Britain.