With figures released this week indicating that the Eurozone has tipped back into recession, companies across the continent are desperately seeking to maintain their market share and revenues, even as household budgets slide. In August, Unilever’s head of European operations, Jan Zijderveld said “poverty is returning to Europe” and that companies were going to have to learn to adjust to that reality. GlobeScan’s most recent public attitudes tracking certainly shows that, while economic concern may have retreated from its 2008 peak, it has now stabilized well above its pre-crisis level. Economic uncertainty now appears to be the “new normal.”
But this is only part of the bleak picture for European companies, with pessimism combining with public mistrust of companies and the free market system in which they operate. No less than 60 per cent of respondents in Europe in 2012 said they felt worse off than they did twelve months before. At the same time only one in three Europeans polled said they trusted global companies to operate in the best interests of society, just 13 per cent said they would “strongly agree” that the free market is the best system on which to base the future of the world, and more than one in three strongly agreed that their national governments should do more to block foreign takeovers. These results make Europe, by our polling, the most skeptical region in the world on the subject of the free market.
Where do European companies go from here? There certainly appears to be an appetite for a more enlightened approach to business among European consumers. Significant proportions say they reward socially responsible companies (33 percent say they have done so) and punish irresponsible ones (32 percent). Further, 65 percent say they only buy from socially responsible companies, 66 percent say they regularly pay more for socially and environmentally responsible products, and 63 percent think that ethically produced goods are of a higher quality.
These figures no doubt include some overclaim, and straitened times will mean that companies will have limited scope for persuading consumers to pay more for socially responsible practices—particularly if the financial situation continues to deteriorate. But responsible business offers companies the chance to seize the initiative and start to hone strategies that will serve them in good stead once the economic storm has passed.
Finding from the GlobeScan Radar, Wave 2, 2012
This post was written by former GlobeScan Research Director, Sam Mountford.