Not so long ago, if you were asked to name the main business functions, the shortlist might include sales, marketing, and finance, among others. Nowadays, a new one can be added: societal leadership.
Increasingly, the public is counting on corporations and business leaders to play a leading role in addressing issues such as climate change and income inequality. Companies are seen from a different angle, they are no longer seen as entities that only provide products and services, or shareholder value.
The 2022 edition of the Edelman Trust Barometer highlights this trend. For the second year in a row, companies are the most trusted entity, with stakeholders holding companies accountable when purchasing products, making investment decisions or applying for jobs.
The overall level of trust in business remained stable at 61 on a scale of 1 to 100, while trust in government and the media continued to erode.
“Rebuilding trust will require companies to continue their societal role,” Dave Samson, vice president of corporate affairs at Edelman, said in a statement. Press release. “But more than that, it will require all institutions to demonstrate tangible progress and restore confidence in society’s ability to build a better future for all, focus on long-term thinking rather than short-term benefits and provide reliable and factual information.”
The company, with a rating of 61, is the only “trusted” entity. The Edelman scale shows an entity to be trustworthy if its rating is 60 or higher, with 50 to 59 counted as neutral and 49 or lower labeled as distrustful. Non-governmental organizations (NGOs) come next with 59, followed by government (52) and the media (50).
Respondents believe CEOs should continue to play a leadership role, with 81% saying leaders “should be personally visible when discussing public policy with external stakeholders or the work their company has done for the benefit of society.
The ratio of respondents who say companies are “not doing enough” to those who say companies are “overshooting” is nearly 6 to 1 on climate change, recently named as one of the top risks in a survey by the World Economic Forum. The ratio is at least 5 to 1 on economic inequality, re-skilling of the workforce and access to health care.
And many more believe that companies are a very effective agent of positive change rather than an ineffective agent. Companies are finding that reporting on environmental, social and governance (ESG) issues is increasingly important to stakeholders, and Edelman’s statistics confirm this.
In the report, respondents based the following decisions on their beliefs and values:
- Buy or defend brands (58%).
- Choosing a workplace (60%).
- Invest (64%).
The Edelman report also showed that “my employer’s communications” are now the most reliable source of information; social media feeds are the least reliable. Technology (74%) was the most trusted sector, followed by education (69%) and healthcare (69%).
— To comment on this article or suggest an idea for another article, contact Neil Amato at [email protected]