China Organisations Outpace Global Peers in ESG and Sustainability Performance
But Many Opportunities for Improvement Still Exist 68% of China leaders believe reputation is crucial for commercial success
78% in China planning to increase investment in reputation management strategy
66% of China organisations negatively impacted by reputational weaknesses over past 12 months
Majority (77%) of China leaders say reputation is becoming more difficult to manage
The majority of China-based organisations are Aspirants (54%) and only 12% are recognised as Trailblazers for reputation management
06 November 2024, Singapore – A new report launched today by global reputation and policy management firm, Sandpiper, reveals progress in ESG and sustainability is rated as an important reputational area by 94% of China respondents, however, only 42% self-rate their organisations as strong in this area. ESG and sustainability are also the biggest area for the improvement of reputation management for organisations, with only 13% making the leading category in this area in China and 9% globally.
The Sandpiper Global Reputation Capital Index, which is based on data from a survey of over 2,700 C-Suite Leaders across 27 markets, identifies four categories for performance in reputation management through analysis of nine areas of reputation management. Based on this, just 12% globally qualify as Trailblazers, with the remaining categorised as Aspirants (54%), Followers (32%), and Beginners (3%).
Reputation Strategy and Crisis & Issues Management are the Indexed areas with the highest portion of Trailblazers, while ESG & Sustainability Strategy, Executive Profiling & Thought Leadership, and Media Engagement have the lowest.
ESG and Sustainability Presents Significant Areas for Improvement
Based on the Index, only 13% in China qualify as Trailblazers, the lowest of any area, with Aspirants at 20%, Followers at 42%, and Beginners at 25% - the highest percentage of Beginners in any area for the market.
This result is underpinned by multiple gaps that need to be addressed. Less than half of respondent organisations have a sustainability and/or ESG strategy or targets, and only 46% in China are regularly producing any form of sustainability and/or ESG reporting at least annually. Resources is identified as a key barrier, with only 9% in China having a dedicated sustainability and/or ESG team.
The quality of organisational ESG and sustainability communications is also a concern to be addressed by leaders, with 47% in China saying they don’t believe these communications are accurate. Further to this, climate communications fares poorly, with only 32% locally having established a climate communications strategy. Only a third (34%) also say their organisations’ sustainability strategies are strongly aligned with the United Nations Sustainable Development Goals (SDGs).
Emma Smith, Sandpiper, CEO, said, “Amid increasing sustainability issues globally and as we approach the mid-point of the decade of action, the findings are clear that more needs to be done to advance sustainability goals. As stakeholder activism grows and greenwashing regulations increase, organisations that are unprepared risk being caught off guard and experiencing major reputational damages.”
Reputational Weaknesses Exposed as Risks Rise
In further findings, 66% of respondents’ organisations in China were negatively impacted by reputational weaknesses over the past 12 months. These included affecting the ability to do business with customers (49%), to attract and retain talent (50%), to recover from a crisis (50%), incurring financial losses (46%), as well as negatively impacting government and community relationships (46%).
These effects are being felt amid a growing risk landscape, with 77% in China saying reputation is becoming more difficult to manage, with just 5% saying it is becoming easier.
More than nine out of 10 leaders in China are very concerned about a range of emerging reputational risks, including misinformation and disinformation (98%), data privacy and cybersecurity (100%), employee (96%), customer and stakeholder activism (97%), DE&I prioritisation (97%), ESG and sustainability scrutiny (97%), geopolitical tensions (97%), impact of AI on communications (97%), and greenwashing claims (97%), and media consolidation (99%).
Despite the high concerns, less than four out of 10 leaders feel well prepared to manage any of these issues. In China the rise of misinformation and disinformation (72 pt gap), employee activism (70 pt gap), geopolitical tensions (70 pt gap), and greenwashing (69 pt gap) top the list, indicating a need for immediate attention in these areas. Trailblazers outperform in every category of reputation management, including being 25 points below the global average in negative impacts owing to reputational weaknesses.
Emma Smith, Sandpiper, CEO, said, “As the risk landscape increases and communications channels are increasingly fragmented and complex, the rules of reputation management have changed. Business leaders need to employ a holistic and multi-dimensional approach to reputation management that hyper-targets stakeholders, all while navigating emerging digital risks that have the potential to destroy reputations in seconds. In this environment, visibility, accountability, and transparency are the crucial ingredients for success.”
Strategy to Action Gap
Overall, the Index reveals a significant gap between strategy and action. While 68% of leaders in China believe having a good reputation is important for their organisation’s commercial success, and over 84% see all nine areas of reputation management as important, less than half rate their organisation’s performance as strong in any of these areas.
At the same time, leaders feel somewhat disempowered in reputational matters, with only 53% of CEOs and 33% of Corporate Affairs Leaders in China feeling a high level of responsibility for their organisation’s reputation. Over half also lack strong access to critical audience and stakeholder insights, which directly impacts their ability to engage and influence.
These issues appear to be recognised, with over 70% globally planning to increase investment in each area of reputation management over the next year.
Emma Smith, Sandpiper, CEO, said, “While our Index shows some very good signs of progress in reputation management globally, there are still many areas for improvement. A significant strategy to action gap is a consistent theme throughout the data, which shows that organisations have all the right intentions but are failing to mobilise plans. The appetite to increase investment in resources for reputation management efforts in the coming year is a positive sign.”
NOTES TO EDITORS
A full copy of the Sandpiper Global Reputation Capital Index 2024 can be downloaded here: https://sandpipercomms.com/research/sandpiper-global-reputation-capital-index-2024/
Sandpiper Global Reputation Capital Index 2024
The Index is based on data from survey of 2,709 CEOs (31%), other C-suite Executives (32%), and Corporate Affairs Leaders (37%) conducted in April 2024. Based on the survey results, Indexes using a 1-100 point scoring scale have been created to benchmark performance across nine areas of reputation management, as well as to provide an overall score. A total of 51 variables are assessed in building the Index. The scores are used to group respondents into four categories:
Trailblazers (75 – 100 points) perform consistently well across all nine areas of reputation management.
Aspirants (50 – 74 points) score highly in most areas, while others are still in development.
Followers (25 – 49 points) score well in some areas, but most are still developing.
Beginners (0 – 24 points) score poorly in nearly all areas of reputation management.
The nine areas of reputation management assessed and which are evenly weighted for the overall score as follows: Reputation Strategy, ESG & Sustainability Strategy, Crisis & Issues Management, Executive Profiling & Thought Leadership, Media Engagement, AI & Digital Environment, Employee Communications, Financial Communications, and Government & Regulatory Affairs.
The nine areas of reputation management assessed and which are evenly weighted for the overall score as follows: Reputation Strategy, ESG & Sustainability Strategy, Crisis & Issues Management, Executive Profiling & Thought Leadership, Media Engagement, AI & Digital Environment, Employee Communications, Financial Communications, and Government & Regulatory Affairs.
Respondents are based in 27 markets: Australia, Brazil, Canada, France, Germany, India, Indonesia, Italy, Japan, China, Hong Kong SAR, Malaysia, Netherlands, New Zealand, Saudi Arabia, Singapore, South Africa, South Korea, Spain, the Philippines, Switzerland, Thailand, United Arab Emirates, United Kingdom, United States of America, Vietnam.
Twelve industry sectors are represented: Business & Professional Services; Education, Energy, Mining, Natural Resources & Utilities; Financial Services, Food & Agriculture; Healthcare & Wellness; Industries & Manufacturing; Property, Real Estate & Construction; Retail, Apparel & Consumer Goods; IT, Technology & Communications; Travel & Hospitality; Transportation.
