As we enter the 21st Century’s third decade, the notion of trust—an enduring cornerstone of every kind of relationship—is tragically becoming an ever-elusive goal for organizations and institutions of all types across an increasingly skeptical business landscape. Despite a strong global economy and near full employment, a majority of survey respondents in every developed market do not believe they will be better off in five years’ time—and more than half (56 percent) believe that capitalism in its current form is now doing more harm than good in the world, the newly released 2020 Edelman Trust Barometer reveals.
“We are living in a trust paradox,” said Richard Edelman, president and CEO of comms giant Edelman, in a news release. “Since we began measuring trust 20 years ago, economic growth has fostered rising trust. This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor. Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.”
The concerns are wide-ranging and deep
Most employees (83 percent) globally are worried about job loss due to automation, a looming recession, lack of training, cheaper foreign competition, immigration and the gig economy. Fifty-seven percent of respondents worry about losing the respect and dignity they once enjoyed in their country. Nearly two in three feel the pace of technological change is too fast. And there is no agreed-on truth—76 percent say they worry about fake news being used as a weapon.
A record number of countries are experiencing an all-time high “mass-class” trust divide, spreading from developed into the developing world. Globally, there is a 14-point gap between the informed public (65) and the mass population (51). There are double-digit gaps in 23 markets, including Australia (23 points), France (21 points), Saudi Arabia (21 points), Germany (20 points), the UK (18 points) and Spain (17 points).
Business (58 percent) is the most trusted institution, taking the lead role in global governance. The recent decisions by the Business Roundtable to endorse a stakeholder model for American multi-nationals, the initiation of Business for Inclusive Growth focused on fair wages by French multi-nationals and the Business Ambition for 1.5°C recognize the broader responsibility of the corporation.
“Business has leapt into the void left by populist and partisan government,” said Edelman. “It can no longer be business as usual, with an exclusive focus on shareholder returns. With 73 percent of employees saying they want the opportunity to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate has changed.”
CEOs are expected to lead from the front
Ninety-two percent of employees say CEOs should speak out on issues of the day, including retraining, the ethical use of technology and income inequality. Three-quarters of the general population believe CEOs should take the lead on change instead of waiting for government to impose it.
“People’s expectations of institutions have led us to evolve our model for measuring trust,” said Edelman. “Trust today is granted on two distinct attributes: competence (delivering on promises) and ethical behavior (doing the right thing and working to improve society). It is no longer only a matter of what you do—it’s also how you do it.”
This year’s results reveal that none of the four institutions is seen as both competent and ethical. Business ranks highest in competence, holding a massive 54-point edge over government as an institution that is good at what it does (64 percent vs. 10 percent). NGOs lead on ethical behavior over government (a 31-point gap) and business (a 25-point gap). Government is perceived as both incompetent and unethical but is trusted more than twice as much as business to protect the environment and close the income inequality gap. Media is also viewed as incompetent and unethical: a majority (57 percent) don’t believe the media does a good job of differentiating opinion and fact but find them invaluable on covering news (58 percent).
“After tracking 40 global companies over the past year through our Edelman Trust Management framework we’ve learned that ethical drivers such as integrity, dependability and purpose drive close to 76 percent of the trust capital of business, while competence accounts for only 24 percent,” said Antoine Harary, president of Edelman Intelligence, in the release. “Trust is undeniably linked to doing what is right. The battle for trust will be fought on the field of ethical behavior.”
Other key findings from the 2020 Edelman Trust Barometer include:
- Both business and government can take specific actions to achieve a higher trust score. Respondents expect business to focus on paying fair wages and retraining. For government, the actions include reducing partisanship, addressing community-level problems and partnering with business and NGOs.
- Local/state government (54 percent) is more trusted than central/federal government (51 percent).
- While government remains tied with media as the least trusted institution, it is the group most believe is best suited to address the issues of healthcare (53 percent); income inequality (51 percent); immigration (48 percent); harmful products (42 percent); and inclusion (41 percent).
- Technology (75 percent) remained the most trusted sector but saw the biggest drop globally at four points. Several markets experienced dramatic drops, including France (-10 points), Canada (-8 points), Italy (-8 points), Singapore (-8 points), Russia (-8 points) and the U.S. (-7 points). And technology is no longer the most trusted sector in 9 of the 28 markets we survey, including Australia, Canada, Hong Kong, Italy, Russia, Ireland, Singapore, The Netherlands and the UK.
- No institution has a vision for the future that a majority of respondents believe in: government (35 percent); media (35 percent); business (41 percent); NGOs (45 percent).