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UK businesses face increased reputation risk around ethical behaviour

BOLDT’s inaugural ESG report finds UK’s largest companies face increased reputational risks from business ethics, labour practices, and product safety and quality

LONDON BOLDT, the pan-European business strategy and communications consultancy, today released its inaugural ESG report that summarises the top reputational risks faced by UK-based companies. The report found that concerns around business ethics was by far the most significant reputational risk across 2020.

The report assessed FTSE350 companies and analysed their reputations across a standardised set of Environmental, Social and Governance (ESG) factors for last year versus previous years. The intention was to understand how sentiment cross-indexed with the volume of content in the public domain drove risks to a company’s reputation, as well as spotlighting opportunities, after the extraordinary challenges of 2020 and those that UK firms face in 2021.

 

Key findings of the report included: 

Business ethics featured as a key reputation risk over the course of 2019 for many business and sectors though retained net positive sentiment overall. But in 2020, sentiment plummeted to become significantly more negative than all other reputation factors while the volume of content – media articles, social media discussion, and all forms of publicly-available report content – stayed largely consistent.

Two other primary reputation risks were identified. Labour practices had become a severe risk for companies in some sectors, while in a year that saw all businesses rush to respond to the onset of the global COVID-19 pandemic other companies had positive sentiment around it, but not without longer-term risk. Product safety and quality was also a risk that grew substantially, particular in some sectors.

While the degree of risk associated with business ethics and other primary ESG factors varied by sector, manufacturing was the only sector where sentiment across all aspects was net-positive.

BOLDT conducted the analysis during the week of 11 January 2021 using its RISKR reputation risk platform, which makes rapid, rigorous, straightforward and cost-effective analysis of this kind practical for the first time. BOLDT developed RISKR in collaboration with Mettle Capital to provide the first platform that enables a true, single-view understanding of reputation risk and impact on a company’s reputation. RISKR draws upon data from media, social media, investor reports and other sources, and cross-indexes it against Sustainability Accounting Standards Board (SASB) ESG factors, and industry-standard trust and reputation vectors. 

Further summary detail on the findings is given in the accompanying BOLDT ESG Reputation Risk Report 2021.

 

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KEY QUOTE

Jon Rhodes, BOLDT Partner: “The volume of risk around ESG issues has been growing for several years, but the unprecedented events of 2020 brought forward some of those risks as acute factors for reputation. While many companies tend to focus on the more publicly-facing ESG issues around the environment and society, they may be shocked that a governance factor, business ethics, was by far the greatest reputation risk. 2020 also presents businesses with an opportunity to better shape future reputations though, by understanding how its disruption should inform their future approach, and what action to take.”

About BOLDT          

BOLDT is a senior-led consultancy focused on delivering business strategy, communications and stakeholder engagement. BOLDT has offices in Amsterdam, Berlin, Brussels, Cologne, Dusseldorf, London, Oslo and Zurich. ​BOLDT has a network of international partners which enables us to give clients support across Europe and around the world. Please visit BOLDTpartners.com to learn more.

Methodology

BOLDT conducted the analysis during the week of 11 January 2021 using its RISKR reputation risk platform, which makes rapid, rigorous, straightforward and cost-effective analysis of this kind practical for the first time. We acknowledge that other analysis performed in different conditions and with different methods may yield different results. 

BOLDT developed RISKR in collaboration with Mettle Capital to provide the first platform that enables a true, single-view understanding of reputation risk and impact on a company’s reputation. RISKR draws upon data from media, social media, investor reports and other sources, and cross-indexes it against Sustainability Accounting Standards Board (SASB) ESG factors, and industry-standard trust and reputation vectors.

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