The 2023 Edelman Trust Barometer reveals that business has been a winner on the trust front out of the pandemic globally, but that with that strong trend, in the context of a collapse in economic optimism, come important responsibilities for boards, companies and CEOs. Here we outline what you need to know.
Business is now viewed as the only global institution to be viewed as both strongly competent and ethical, according to the 2023 Edelman Trust Barometer. According to the global survey, business now holds a significant 53-point lead over government in competence and is 30 points ahead on ethics.
Business, with a high trust rating of 62 per cent, remains the only trusted institution globally. "The increased perception of business as ethical brings with it higher than ever expectations of CEOs to be a leading voice on societal issues," said Richard Edelman, CEO of Edelman. "By a six-to-one margin, on average, respondents want more societal involvement by business on issues such as climate change, economic inequality, and workforce reskilling.”
The treatment of workers by business during the pandemic and return to work schemes, along with the swift and decisive action of over 1,000 businesses to exit Russia after its invasion of Ukraine helped fuel a 20-point jump on ethics over the past three years, the survey shows. “Speak up to employees about issues that matter in your local community,” Edelman said.
The online survey, now in its 23rd year, was launched at the World Economic Forum in Davos last week. The study surveyed 32,000 respondents in 28 countries and 62 per cent said they trust business. About 59 per cent said they trust NGOs, and government and media come in at 51 per cent and 50 per cent respectively.
Collapse in economic optimism
This year's report finds that economic optimism has collapsed globally (from 50 per cent last year to 40 per cent), with half the countries surveyed showing a double-digit fall in the belief that their families will be better off in five years' time. Not one developed nation has over 36 per cent of its people confident that their family will be better off in five years, and 24 of the 28 countries surveyed dropped to all-time lows in optimism including the US (36 per cent), the UK (23 per cent), Germany (15 per cent) and Japan (9 per cent).
Early Australian trust figures
Australians have lost five points in total trust over the past year in the combined ranking of business, government, NGOs and the media, according to the survey (down to 48 in the 2022 survey from 53 in 2021). Over the year, trust in business fell in Australia by four points, trust in NGOs fell five points, and trust in employers rose locally by one point.
More analysis of the Australian figures will be provided in part two of this series on the barometer findings coming soon.
Other key global findings:
- Personal economic fears such as job loss (89 per cent) and inflation (74 per cent) are on par with urgent societal fears like climate change (76 per cent), nuclear war (72 per cent) and food shortages (67 per cent).
- CEOs are expected to use resources to hold divisive forces accountable: 72 per cent believe CEOs are obligated to defend facts and expose questionable science being used to justify bad social policy; 71 per cent believe CEOs are obligated to pull advertising money out of media platforms that spread misinformation; and 64 per cent, on average, say companies can help increase civility and strengthen the social fabric by supporting politicians and media outlets that build consensus and cooperation.
- Government (51 per cent) is now distrusted in 16 of the 28 countries surveyed including the US (42 per cent), the UK (37 per cent), Japan (33 per cent), and Argentina (20 per cent). Media (50 per cent) is distrusted in 15 of 28 countries including Germany (47 per cent), the US (43 per cent), Australia (38 per cent), and South Korea (27 per cent). 'My employer' (77 per cent) is the most trusted institution and is trusted in every country surveyed aside from South Korea (54 per cent).
- Government leaders (41 per cent), journalists (47 per cent) and CEOs (48 per cent) are the least trusted institutional leaders. Scientists (76 per cent), my coworkers (73 per cent among employees) and my CEO (64 per cent among employees) are most trusted.
- Technology (75 per cent) was once again the most trusted sector trailed by education (71 per cent), food & beverage (71 per cent) and healthcare (70 per cent). Social media (44 per cent) remained the least trusted sector.
- Canada (67 per cent) and Germany (63 per cent) remained the two most trusted foreign brands, followed by Japan (61 per cent) and the UK (59 per cent). India (34 per cent) and China (32 per cent) remain the least trusted.
In terms of the outlook for 2023, Edelman sounds a note of caution for business. “It is going to be a challenging year, with recession looming, job cuts already taking place and politicians emboldened to take a strident position against business on ESG or geopolitics,” he says.
“Business is on safe ground when it stays in areas of comparative advantage where it can make a tangible difference, including sustainability, diversity, equity and inclusion, wages/reskilling, and geopolitics.” Notable is a finding that 63 per cent of those surveyed either buy or advocate for brands based on their beliefs and values.
Generally, Edelman has compiled the following summary for action.
A to-do list for business in 2023
Get to a simple measure of ESG, so you can demonstrate your societal impact. At present there are a dizzying 180 different approaches. A simple and single standard, which is universally accepted, will be much easier to defend when challenged by political or vested interests. KPIs (key performance indicators) that show business is indeed keeping its word on ESG goals while building support for innovation, would allow companies to calculate their progress and respond to financial institutions evaluating potential investments.
Make diversity, equity and inclusion a fundamental part of global business strategy. It must live beyond our largest companies. Use the supply chain to insist on diversity at medium and small businesses as has been done in sustainability. Defy the usual excuse of recession; keep pushing for more diverse boards of directors and top management teams and make religion an equal third leg along with race and gender.
Hold divisive forces accountable. Pull advertising money from media platforms that spread disinformation. Defend facts by showing the science behind innovation and publishing on your own platforms.
Work with and not against Government. That goes especially for policies that raise living standards, offer opportunities for continuing education/reskilling and improve public safety. That also means partnership with government on a broader set of issues including privacy and security, geopolitics, plus proper supervision of new markets such as crypto.
“We are living through a period of huge systemic change in a multi-polar world, with divisive forces fanning economic grievance. Left untended, the consequence will be further polarization, slowing economic growth, deeper discrimination and an inherent inability to solve problems,” says Edelman.
“Business needs to play a leading role, restoring economic optimism by creating jobs. This will give government time to recover its footing while the social fabric is mended from the rifts caused by the pandemic.”
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