Build Trust Through Sustainability

By March 14, 2017TDG Insights

People, planet, and profit.

Every brand should have a thorough understanding of how their business activities, culture, and products affect people’s lives, the environment, and the organization itself. Chinese companies planning to go public on international stock exchanges require environment, social, and governance (ESG) compliance in addition to a healthy profit-and-loss (P&L) sheet. Brands should conduct a materiality analysis to identify aspects that are most critical to the business.

Be transparent

Consumers generally trust people they know more than strangers, so Chinese brands can’t afford to be a stranger to their consumers. When you are new to a market, your target customers naturally would like to know you better. Firms need to make it easy for them to find out information about the company, the management team, available products, and the company’s mission. Transparency assures consumers that a brand acts as a good citizen and will be held accountable for any unethical practices.

Engage your stakeholders

Suppliers, employees, local communities, and NGOs are also important stakeholders that brands should engage in the sustainability management discussion. Chinese firms should work with their suppliers to improve supply chain robustness and address potential labor issues. Companies can also involve employees in the process of creating a better corporate culture, and encourage their participation in local community development projects.

Our 2016 annual consumer survey indicates that overall American consumers gave Chinese brands a passing score on quality of product. Some also noticed Chinese brands’ effort to become more innovative and creative.

At the same time, however, the results of the survey reveal that there are a series of urgent issues that need to be addressed. More than half (57%) of American consumers in our survey did not think Chinese brands are doing enough to ensure transparency. Their comments highlight issues related to information disclosure, intellectual property rights, and general honesty. More than half of American consumers in our survey were concerned about sustainability issues such as pollution, labor, and safety. Also, more than half of the American consumers surveyed believe that Chinese brands lack genuine customer engagement and have done a “poor” or “very poor” job building an emotional connection.

While being emotionally reserved and humble is a prominent characteristic in Chinese culture, it may become a hurdle for Chinese brands to express their enthusiasm and personalities.

It is therefore essential for Chinese firms to create content that helps tell their own stories, and get their voices heard through both earned and paid media. While the effects may not be immediate, effective content strategy and brand media will help Chinese brands establish credibility and authenticity, shift the tone of mainstream media, and influence public opinion over time.