Corporate reputation is shaping the FTSE – so why do businesses ignore it?
Corporate reputation is responsible for 28 per cent of the FTSE 350’s market value, so why do companies continue to undervalue it, asks Sandra Macleod
As conflict in the Middle East drives fresh volatility in energy markets, UK businesses are once again facing the familiar challenge of rising costs, tightening margins and uncertain demand. In periods like this, markets don’t just price performance, they price confidence in performance and that’s where reputation comes in.
Since 2008, Echo Research’s reputation valuation service, Reputation Dividend, has analysed financial and reputational data across the FTSE 350 and S&P 500 to identify what reputation is driving value, where it is under-leveraged and how it can be strategically optimised to enhance returns. The latest analysis of the FTSE 350 in 2026 shows that £841bn – 28 per cent of total market value – is driven by corporate reputation. This is not just sentiment, but something embedded in valuations, and in today’s environment it is more important than ever.
When oil prices spike and forecasts become less reliable, investors look for signals of resilience. Which leadership teams can navigate volatility? Which businesses can sustain delivery under pressure? As a result, reputation becomes a shortcut to conviction, simultaneously acting as a shield against downside risk, a marker of management quality and a proxy for future performance. Put simply, it helps capital decide where to go.
The FTSE ‘trust divide’
This is why, in times of disruption, the gap between companies widens and our analysis shows a clear “trust divide” across the FTSE index. Capital is concentrating around companies that consistently showcase credibility, discipline and delivery. In contrast, those that are not demonstrating these factors are seeing value drift or erode. This is not a communications issue; it is a market dynamic.
This emphasises that reputation is measurable and manageable, yet inside many organisations it is still not managed with the same rigour as financial or operational performance. This represents a missed opportunity.
The pillars of reputation value are not just abstract concepts but fundamental drivers that investors recognise immediately: quality of products and services, long-term value potential, financial soundness and management credibility. This underscores that markets are rewarding execution over explanation.
For the C-suite and IR teams, the implication is clear: understanding how reputation translates into value is no longer optional; it is a strategic advantage. Those companies that can quantify their reputation protect value more effectively in downturns, enabling faster recovery from shocks.
Those that fail to understand their reputation DNA are leaving a significant portion of their valuation to chance. At a time when costs are rising and growth is harder won, that is a risk few can afford.
As our findings show, if more than a quarter of UK market value is driven by trust, then trust is not just influencing the economy – it is helping stabilise it. Those companies that understand this will outperform.
Sandra Macleod is group chief executive at Echo Research