Europeans have twice as much confidence in non-governmental organizations as they do in corporations, and in the U.S. NGOs are on the way to approaching parity with corporations and the government when it comes to credibility, according to second annual survey of opinion leaders conducted by Edelman Public Relations Worldwide.
American attitudes toward corporate social responsibility now closely mirror those in Europe, which has long held corporations to higher standards.
According to Edelman president and chief executive Richard Edelman, “We believe NGOs are now the Fifth Estate in global governance—the true credible source on issues related to the environment and social justice. Even with global recession and the events of 9/11, NGOs have strengthened their position,” he told attendees at the World Economic Forum last week. 
“In Europe, NGOs fill trust void left by weak government. In the U.S., the preeminent position of business of a year ago has now changed to a power-sharing arrangement with NGOs and government. The failure of companies such Enron in the U.S. and Railtrack in the U.K. further threaten the authority of the private sector.”
In Europe, the research shows NGOs enhancing their dominant position from a year ago: 51 percent of opinion leaders said they trusted NGOs to do the right thing, up from 48 percent last year. At the same time, trust in government fell by one-third (from 36 percent to 26 percent), driven by sharp declines in the U.K. and Germany, and trust in business increased three-fold in France (from 17 percent to 56 percent) while falling sharply in Germany (from 47 percent to 28 percent.
Not surprisingly, with the focus on national defense and homeland security since 9/11, Americans’ trust in their government increased substantially (from 27 percent to 48 percent). But over the same time period, Americans’ trust in NGOs has risen from 36 percent to 41 percent.
“There is a growing social imperative for companies and brands on both sides of the Atlantic,” says Jonathan Wootliff, managing director of Edelman’s stakeholder strategies unit in Brussels and New York. “Nine of ten opinion leaders in Europe and America believe companies should continue efforts to become more socially responsible despite the recession. Nearly 80 percent of European and American opinion leaders want NGOs and business to partner on tough issues.”
In Europe, business is not seen as delivering on highly important corporate attributes including proper treatment of employees, social and environmental responsibility. Eight in ten opinion leaders consider these attributes highly important yet only four in ten feel that European businesses are doing an adequate job in these areas. U.S. and other foreign corporations are at a further disadvantage in Europe with less than one-third of European opinion leaders rating non-European companies as delivering on these attributes.
In Europe, NGOs continue to be rated higher than the top rated corporations by a margin of nearly two to one. The three top rated brands studied in Europe include Amnesty International, the World Wildlife Fund and Greenpeace (between 62 percent-76 percent on trust). The top four corporations in Europe: Microsoft, Bayer, Shell, and Ford rank between 35 percent and 46 percent. But in the U.S., the four top-rated brands—Microsoft, Coca-Cola, McDonalds, and Bayer—ranked higher in trust (around 55 percent) than the top NGOs (around 40 percent).
In both Europe and the U.S., treating employees well and honesty with the public are rated as most important among the corporate attributes studied. More than eight in ten Europeans and seven in ten Americans rate corporate social behavior and environmental responsibility as highly important. Nine in ten opinion leaders in each market say that companies should continue their social responsibility initiatives in times of economic recession.
Europeans assign somewhat higher importance ratings than Americans to a number of socially oriented corporate attributes, most notably, environmentally responsible (+15 percent), socially responsible (+16 percent), locally based executives (+12 percent) and treats employees well (+11 percent) while Americans assign higher importance to has strong brands (+12 percent) and visibility in the community (+10 percent).
However, business is not seen as delivering particularly well on these attributes in either market, with non-European companies operating in Europe scoring particularly poorly. Non-European companies under perform European companies with respect to sensitivity to the local culture (-23 percent), adhering to local work policies (-16 percent), visibility in the community (-14 percent) and social responsibility (-13 percent).
Finally, Europeans and Americans overwhelmingly agree that NGOs should cooperate more with business and government while corporations should be doing more to foster relationships with NGOs. For most, such cooperation does not jeopardize NGO credibility.