We’re working to build trust in business and society.
Former nurse, Janaina Nunes
Now, Manager at PwC Brazil
Delivering hospital tech for care patients can trust
Trust is the hallmark of high-performing companies, the glue that binds cohesive societies, and a driver of shared prosperity.
Let’s start with companies. Our 2022 Annual Global CEO Survey of 4,400 CEOs from 89 countries found that the single most important predictor of a company’s past and future financial performance is trust.
Growth Companies in the top quartile on trust achieved 20% higher market capitalisation growth on average. (Harvard Business School, The Power of Trust)
Resilience During the pandemic, high-trust companies lost less value and rebounded in value faster than low-trust companies. (PwC report Trust in Adversity)
Confidence 71% of CEOs of high-trust companies are very or extremely confident in their companies’ prospects for revenue growth, compared to just 47% of CEOs of low-trust companies. (PwC 2022 Global CEO Survey)
It’s not just companies that rely on trust. Trust is key to the social cohesion, prosperity, and quality of life of communities and countries. As The Economist observed, ‘Trust keeps society running. Even the most trivial interactions rely on small acts of trust.’[1] Low-trust nations are less likely to make long-term investments, have strong government institutions, and participate in cross-border trade – all key sources of innovation, economic development, and ultimately a better quality of life for citizens.[2]
In this chapter, we discuss some of the challenges in building trust in business and society, and we share some of the ways that our community of solvers is helping to build trust in our clients’ organisations and in society as a whole.
According to the 2022 Edelman Trust Barometer, ‘distrust is now society’s default emotion.’ Concerningly, the lowest socioeconomic quartile of the population has very little trust in any of society’s institutions. This year, we’ve analysed some of the causes of eroding trust from polarisation to accelerating technological change.
For companies, trust has never been more important. It’s the link that connects the organisation, its people, its customers, its stakeholders and the world. Trust can’t be bought. It must be earned through every interaction, every experience, every relationship and every outcome delivered.
But in order to build trust today, companies must meet the expectations of a broader set of stakeholders on a wider range of issues such as cybersecurity, diversity, data security, tax payments, and environmental performance. Companies are examined on an ever-growing list of questions about whether they are forces for good in society.
“Today companies face escalating activism from citizens, investors, and policymakers on concerns like climate change, inequality, and social issues. There’s a higher bar for companies. Stakeholders expect transparency and a fair exchange of value.”
The result is that companies need to build trust at a time when it is both more fragile and more complicated to earn.
“Trust is one of a business’s most important assets and it’s critical to an organisation’s survival in a fiercely competitive and quickly changing environment. Trust truly is the new currency of business.”
Our strategy, The New Equation, is all about helping companies build the trust they need to succeed. Companies must have the trust and support of customers, staff, investors, communities, policymakers, and other stakeholders to maintain their social licence to operate and their ability to thrive. When companies consistently deliver the outcomes their stakeholders value, trust is built. In this way, trust and sustained outcomes enable each other in a virtuous cycle.
Throughout this chapter, we’ll demonstrate two key ways that we help to build trust in business and society:
We help companies build trust in their delivery of value for a range of stakeholders.
Find out how
+We help companies achieve the results their stakeholders want, from investors seeking strong financial performance to citizens demanding action on sustainability. Just as importantly, we help companies demonstrate these results. We deliver robust, trustworthy evaluations of clients’ performance in both financial and nonfinancial areas, backed by the credibility of our brand. Through our work, our clients’ delivery of value for multiple stakeholders is both achieved – and believed.
We support the operation of society’s systems (such as the tax, legal, and public reporting systems) that promote fairness, transparency, and the rule of law. We help to improve the operation of these systems for the good of society through, for example, advising on how to create effective policy and rigorous standards. From audit reform to carbon pricing, we advocate for a policy environment that supports positive societal outcomes while encouraging and enabling business to help achieve those outcomes.
In the rest of this chapter, we’ll share how we are:
Trust may be hard to build, but it can be measured. In 2022, we applied our proprietary trust framework to map eight quantifiable trust drivers for companies, ranging from financial performance to ESG to transparent reporting.
Financial
Creating long term shareholder return
Brand
Perception in the public domain
Social
Ensuring people’s well-being by fostering safe, diverse, inclusive, respectful communities
Reporting
Transparently demonstrate and communicate consistent and aligned behaviour
Economic
Broader economic impact in the communities where you operate and in broader society
Environmental
Positively impacting natural environment across the value chain of its products and services
Governance
Conduct activities ethically and with integrity, in line with applicable laws for corporate accountability
Technology
Leverage technology to avoid adverse effects and improve business outcomes
This framework encompasses a broad range of stakeholders from policymakers to the public. It enables our clients to map their stakeholders, measure trust levels, identify problem areas, and track progress.
As we’ve seen, companies must meet stakeholder expectations on a range of issues from financial performance to ESG, inclusion & diversity, and cybersecurity. This year, we’ve dedicated a chapter of our Global Annual Review to our work to help companies do the right thing on ESG. Our People chapter shares how we’re helping companies look after their staff’s wellbeing and continue to build diverse teams. Our chapter on Transformation shows how we’re helping companies transform their value-creation models to deliver strong returns to investors.
Below, we take a close look at how we’re helping companies manage one of the biggest trust-destroying risks to business: cybersecurity breaches.
Our 25th Annual Global CEO Survey identifies cybersecurity risk as the top threat to businesses. From ransomware to data breaches, cyber attacks can destroy trust in a company’s ability to operate reliably and protect sensitive data. Our research shows that the past year was the worst yet for cyber attacks. Ransomware groups continued to practice ‘indiscriminate inhumanity, attacking infrastructure, hospitals, and charities, proving no-one is off-limits,’ says Kris McConkey, PwC Global Threat Intelligence Leader, PwC UK.
“Cyber attacks are an existential threat that can affect a country’s national security, economic wellbeing, and healthcare. The barriers to entry are now so low as evidenced by ransomware-as-a-service and numerous nation states leveraging this tool. Policy and regulation lag far behind the pace of the threat, creating a market inefficiency exploited by the criminals daily.”
We track the rapidly changing techniques employed by cybercriminals to help our clients prepare, respond and defend against even the most sophisticated cyber threats. We recently launched the Global Cyber Academy to continuously upskill 6,000+ practitioners across the network in this fast-moving and complex field. We’re proud to help clients detect and prevent thousands of cyber attacks every year, helping to build trust in their organisations and in society as a whole.
Monthly high risk cyber threats reduced from 12,000 to 30
This proactive system meant the client could do more than investigate attacks after they’d happened. They could detect and stop impending attacks before they occur, effectively reducing monthly high risk threats from 12,000 to 30. PwC’s system helps to ensure that customer data remains safe while significantly reducing the likelihood of another high-profile breach. The retailer is now in a strong position to begin rebuilding trust with the public.
Our 2022 Global Digital Trust Insights Survey uncovered vast differences between companies with the best cybersecurity outcomes and the also-rans. For example, companies with the best outcomes were 11 times more likely to understand risks at third-party suppliers. Building on these insights, we’re offering clients practical advice on enhancing security. For example, we’re helping leaders uncover the cyber blind spots in their supply chains.
Our 2022 Global Digital Trust Insights Survey shows:
10xmore likely to have fully implemented a formal process for data trust practices
11xmore likely to have high levels of understanding of cyber and privacy risks from third parties
12xmore likely to say their CEOs give them the support they need
We identify the critical actions business leaders must take to pass the Cybersecurity Leadership Test. This includes C-suite endorsement of cybersecurity as a core business imperative. Our research shows that CEOs need to up their game. Most CEOs believe they are ‘engaged’ and ‘strategic’ on cybersecurity, while non-CEOs believe CEOs are more reactive than proactive, acting only when a breach occurs.
In addition, we’re proud to help combat other forms of illicit activity online. For example, see our ‘crypto chase’ work below.
Innovative "crypto chase" uncovers global syndicate operations
The human-led, tech-powered approach united staff across offices in the forensics team at PwC firms in Africa along with a team from PwC UK. They used a tracing tool developed by PwC that can track the flow of cryptocurrency on the blockchain. The team "crypto chased" the funds to digital wallets abroad, uncovering syndicate operations. By doing so, the regulator was able to forfeit blocked funds of the entities and/or individuals to the State.
Using this innovative approach, the engagement was delivered by a PwC community of solvers working together remotely across thousands of miles to get the job done.
Trust is the currency of business. But the path to earn and maintain it can be complex. Through our US firm’s Trust Leadership Institute, we’re bringing together a community of top minds to navigate the complexities of our evolving business landscape and chart a course to earn trust in business and society.
As part of the US firm’s $300 million Tomorrow Takes Trust commitment to embed trust-based principles in business, the Trust Leadership Institute offers a variety of immersive, interactive experiences designed to support leaders at every stage of their journey to build trust. To date, more than 1000 industry executives have joined us to explore the paths to building trust with multiple stakeholders. Topics explored include data, privacy and technology, embodying personal trust, navigating a multi-stakeholder environment, shaping ESG strategy and much more.
PwC US has committed $300 million to embedding trust-based principles in business
As we’ve seen, today companies are judged on far more than financial outcomes. A company’s performance in areas like ESG, cybersecurity, and more can affect its reputation, staff retention, access to capital, and ultimately enterprise value.
That’s why we’re evolving our assurance offering to provide confidence not just in companies’ financial statements but in their impact on people and the planet as well.
We call this ‘trust in what matters.’ This includes issues that are important to a company and its wider stakeholders, not just its shareholders. We apply rigorous standards to analyse companies’ performance on issues such as climate and diversity. This helps companies demonstrate their progress, enabling these firms to build trust, enhance their corporate reputations, and grow enterprise value.
We encourage our clients to understand what matters to their stakeholders, and we deliver assured information about the company’s performance on these measures. We believe that if it needs to be trusted, it needs to be assured. High-quality assurance heightens accountability and trust while giving companies a robust basis for tracking and improving their performance.
Building trust in progress to net zero
PwC UK delivered assurance on the public statements made by HSBC about its progress against its sustainable financing and investment targets, as well as the financed emissions of its customers in targeted sectors.
Investors seek trusted information. In our Global investor survey, nearly 80% said they trust reported ESG information more when it’s been assured. And 70% said that companies should be required to obtain assurance on all material ESG information, not simply on a subset that the company chooses.
Despite this demand for assured information, many companies report nonfinancial information without assurance. This creates a sizeable trust gap.
Creating trust with on-screen talent
Solving this challenge was made possible by combining the skills of data, audit, and IT teams from PwC US. The result is a pioneering new system for rigorous viewer figures that both the company and talent can trust.
It’s another example of the ways that we are combining our long-established skills in audit with additional capabilities in areas like tech to create trust.
This year, our Global Chairman Bob Moritz set out the trust imperative for business. In the face of dramatic disruptions (from a pandemic to war to climate change) that can fray trust in society, business has an opportunity – and responsibility – to lead. Business should be part of the long-term solution to society’s greatest challenges. This means defining and adhering to a long-term vision for the company as a force for good in society that delivers value to all stakeholders.
“Companies that embrace a role as a valuable, purpose-driven contributor to society – and whose leaders make bold, long-term decisions consistent with that role – will earn trust.”
Expectations are growing for business to lead on societal issues. The 2022 Edelman Trust Barometer concludes that ‘societal leadership is now a core function of business.’ Across every issue, by a vast margin, people are demanding stronger leadership from business. ‘CEOs are expected to shape conversation and policy on jobs and the economy (76%), wage inequity (73%), technology and automation (74%), climate change (68%)’ and more.
Ultimately, business leaders should be guided by a straightforward principle - do the right thing by all of your stakeholders - while not underestimating the challenges and trade-offs involved.
Along with many multinational organisations, we made the decision to cease our operations in Russia following the invasion of Ukraine. We moved rapidly to act on this decision. Today PwC no longer operates in Russia or Belarus. We believe thisz was the right thing to do.
We have also scaled back our operations in Myanmar following the February 2021 coup. We focus now only on the needs of international clients operating in the country. We continue to support all of our Myanmar colleagues and have helped some with redeployment and relocation where appropriate.
Building trust by protecting staff in a difficult situation
In 2022, PwC UK acted as the joint administrators to complete a sale of McColl's Retail Group to Alliance Property Holdings Limited, part of the Morrisons Group. PwC brokered a deal that not only successfully transferred all 16,000 staff from 1,100 shops across the UK to the Morrisons Group but also saw the group agreeing to rescue the two pension schemes which had more than 2,000 members.
“Governments have an important role to play in… setting the responsibilities of business in accordance with the public interest, shaping an operating environment that enables companies to pursue economic success within their social and environmental responsibilities and supporting sustained outcomes which are in the best interests of communities and the planet.”
Below we share some of the ways that we support the development of policies, standards, and regulatory structures that align business and societal interests – ultimately increasing public trust in both business and society.
Robust ESG reporting standards help to create transparency and accountability while rewarding organisations that perform well. Ultimately, these standards can help to create trust in businesses that can demonstrate good performance, as well as trust in society’s ability to do the right thing on the issues that matter.
That’s why we advocate across global platforms including Davos for robust, globally aligned reporting standards, and we do all we can to support their development. For example, we’ve worked with the World Economic Forum to drive the global alignment of reporting standards, culminating in the establishment of the International Sustainability Standards Board (ISSB). We’re working with the ISSB and other standard setters from the European Financial Reporting Advisory Group (EFRAG) to the US Securities and Exchange Commission (SEC) to support the development of robust reporting requirements.
“Companies need to go beyond glossy claims that they do good in the world. Companies need to be specific with a clear purpose, measurable goals, and robust reporting on performance.”
High-trust societies are marked by a widespread belief that the rules are followed. Our Tax and Legal Services practice exists to help our clients follow the rules. In this way, we play an integral role in helping tax and legal systems function, following our rigorous Tax Code of Conduct.
“Tax and legal systems provide guardrails for society. This is especially important in a fractured and complex world.”
What’s more, we help clients demonstrate compliance with the rules. For example, our Tax Transparency Tool gives a full picture of a company’s tax contributions to society and the economy, supporting fair and open conversations about companies’ true tax contributions. This has helped some of our clients build trust with the public when perceptions of their tax contributions were out of step with reality.
We encourage our clients to think of their tax disclosures as more than a simple report of numbers. Tax reporting is also an indication of a company’s values. We help clients develop a tax strategy – and a public narrative around it – that demonstrates the company’s values and builds trust with stakeholders.
Our role in supporting trusted tax and legal systems goes far beyond compliance with existing rules. We suggest ways to hone the tax rules so that the outcomes of their application are in line with the intentions of policymakers. In addition, we encourage development of the tax and legal systems in line with the public interest, offering our expertise to help identify ways these systems can deliver better outcomes for society.
“We help build trust in systems by helping tax to be an enabler of societal good.”
For example, we support carbon taxes as a lever to reduce emissions. Our Global Chairman, Bob Moritz, joined with other CEOs in calling on the G7 to institute a meaningful carbon price.[3] We partnered with the World Economic Forum to explore the potential for a global carbon price (concluding that such a price could pay for itself while reducing emissions by 12%).
Turning on the taps of trust in Southern Africa
PwC South Africa joined together across lines of service to create one team with the necessary skills from strategy development and stakeholder alignment to infrastructure and funding support. As a result of this collaboration, 380,000 people will gain access to fresh drinking water. We’re proud that this is one of the first projects in South Africa in which the government and private sector are collaborating to make life better for communities, building public trust in government and business and their abilities to deliver crucial services.
“In order to help our clients build trust, we have to be trusted ourselves.”
Trust in PwC helps us build trust in our clients. To explore our stringent efforts to build trust in our network by delivering quality output, maintaining our objectivity and independence, and protecting the reputation of our brand, please see the chapters on Quality, Risk, and Governance.
“ Our good name and reputation are cornerstones of our business. Our success as a network depends on being trusted. At PwC, speaking up about doing the right thing is not just okay – it’s expected.”
To learn more about how we’re striving to do the right thing on issues from climate to inclusion & diversity, please see the chapters on ESG and People.
Trust is built by being transparent and accountable. This year, for the first time, we’re seeking to report on all of the World Economic Forum’s Stakeholder Capitalism Metrics – both core and expanded – that are relevant to our business. We fully or partially comply with 35 of 42 metrics that are relevant to our business. In addition, we’re disclosing our climate performance in our 2022 Climate Disclosure Report.
[1] Economist, ‘Believing is seeing,’ Aug 2016. [2] Trade, Trust, and Transaction Costs. [3] Flipping the Switch, open letter via the Sustainable Markets Initiative.
Sarah Brown
Director, Global Corporate Affairs and Communications, PwC United Kingdom
Tel: +44 7384 248 785
