Trust is a vital component for keeping the global economy growing. Every single transaction, from grabbing a coffee to acquiring a multinational corporation, is built on some level of trust: that the goods or services offered serve their purpose or that the buyer can pay for them. But trust does not just grease the wheels. It enables firms from different cultures and separated by continents to work together in a manner that benefits all. It helps companies to set, follow and achieve targets with a wider social or environmental purpose. It also assists with hiring and keeping outstanding workers.
Customers all over the world are prioritising purchasing from companies displaying trustworthy behaviour. And firms are finding that making strategic decisions about their operations during the pandemic is easier if there is a high level of trust in their relationships with business partners. In this paper, Economist Impact, sponsored by Icertis, examines the concept of trust within relationships between business partners. We consider not only what trust is and how it is built, but also what challenges firms face. What these firms have done to build and maintain trust and where it has proven particularly beneficial are also explored. We have used a combination of desk research, expert interviews and an extensive survey of 600 business executives working across industry sectors in nine major economies in North America (Canada and the US), Europe (France, Germany and the UK) and Asia-Pacific (Australia, India, New Zealand and Singapore). Some high-level key findings are as follows:
- Trust is an umbrella term for a group of behaviours that encompass ability, benevolence and integrity. Firms are likely to need to exhibit behaviours from each of these areas to be considered highly trustworthy.
- Executives believe that high levels of trust can be beneficial both to long-term revenue growth and achieving sustainability goals. As they step up efforts to fulfil environmental, social and governance (ESG) commitments, ESG compliance is also emerging as an area that helps deliver trust in business relationships while building customer loyalty.
- To achieve sustainability targets, firms are looking to increase the visibility and transparency of their supply chains. Both of these attributes are correlated with trustworthy business relationships.
- A gap remains between the measures that executives believe will enhance the trust in their business relationships and the steps that their organisation has taken, in areas such as employing dedicated staff to assess ESG compliance and investing in new technology to enable the fulfilment of contractual obligations.