FTSE Hits Record Highs, Yet Reputation Drives £730bn Value

The FTSE 100 recently soared past the 9,000-point mark for the first time, marking a significant milestone in the UK financial landscape. However, a new report highlights a crucial aspect of this achievement: corporate reputation now represents a staggering £730 billion of value across the FTSE 350. This figure underscores the importance of reputation in maintaining market momentum, particularly as businesses navigate an increasingly complex environment.

The 2025 UK Reputation Valuation Report, released by global reputation specialists Echo Research, reveals that approximately 29 percent of shareholder value is driven by reputation. This statistic transcends mere brand perception; it encapsulates investor trust, alignment with stakeholders, and effective leadership. A robust reputation can provide companies with a competitive edge, especially during fluctuating market conditions.

While the soaring FTSE 100 is a cause for celebration, the report also serves as a warning. Although 95 percent of companies are reaping positive returns from their reputation, five percent are actively diminishing theirs, resulting in a loss of £9 billion in value, an increase of £4 billion from the previous year. These companies are not necessarily experiencing financial struggles; rather, they are failing to communicate effectively, listen to stakeholders, or deliver on promises, thereby eroding the trust that is essential for long-term success.

Understanding the Reputation Landscape in 2025

The report identifies several key factors driving reputation in 2025. Long-term value potential, product and service quality, and management credibility are among the top contributors. This reinforces the idea that companies must not only make promises but also fulfill them to maintain their standing. Interestingly, the impact of Environmental, Social, and Governance (ESG) factors has rebounded to 10.8 percent, highlighting a shift from superficial slogans to meaningful actions.

Despite the FTSE 100’s record performance, a closer examination reveals reputational pressures, particularly for companies with significant global exposure. Issues such as trade tensions and geopolitical conflicts are starting to affect businesses that were once viewed as having strong reputations. In contrast, the more domestically-focused FTSE 250 has shown greater reputational resilience, possibly due to its alignment with local expectations.

What does this mean for business leaders and boards?

First and foremost, reputation should be regarded as a valuable asset, not merely a public relations concern. It requires active measurement, management, and strategic investment, similar to other high-value assets within the company.

Secondly, maintaining momentum is vital. Companies like RELX, Rolls-Royce, and ITV have demonstrated that focused efforts to rebuild reputation can yield tangible shareholder value within a year.

Finally, reputation is not a universal concept; it is unique to each organization. Savvy leaders are not just observing the rising FTSE; they are assessing how much of their company valuation is linked to reputation and strategizing on ways to enhance it.

The FTSE may be reaching unprecedented heights, but the true challenge lies in understanding the reputational margin—the often-overlooked asset that influences whether a company thrives, falters, or fades into obscurity. Business leaders must now pose the critical question: What is your company’s reputation contribution, and what steps can you take to improve it?

Sandra Macleod serves as the group CEO of Echo Research and emphasizes the importance of reputation in today’s business climate. As the market evolves, so too must the strategies to maintain and enhance corporate reputation, ensuring long-term success.