A company’s stance on ESG issues can significantly affect its reputation – and that will increasingly factor into a business’s success, according to a recent survey of executives.
Over the next five years, reputation will become more important than margins, 72% of business leaders said in a report published on Tuesday by Signal AI, which surveyed 1,000 c-suite executives at companies that have at least 250 employees.
The majority (92%) said they agreed ESG issues will affect their business’ reputations during the next 12 months. The report points to findings from Edelman’s 2022 Trust Barometer, which found that 60% of people let their values and beliefs guide what they buy and from whom they make purchases.
Signal AI, which among other services helps companies measure changes in their reputations, included an assessment of the top 10 companies in the S&P 500. Telsa, for example, had the highest proximity to environmental issues – and by far the most media coverage on that topic – although the “sentiment” score for the firm, based on how it appears to be perceived in news coverage, as third-lowest, ahead of J.P. Morgan and Johnson & Johnson, according to the report.
Meanwhile, Apple was shown as being more distanced from environmental issues but had a more favorable perception for that topic, and roughly the second most media coverage. Microsoft, Amazon and Berkshire Hathaway had the highest perception ratings for environmental coverage, though the firms had a lower proximity to the topic, Signal AI found.
In an analysis of Microsoft’s performance, the tech firm plotted the company’s sentiment score for the environment topic against its share price over the past year, showing a positive visual correlation between the two.