Business around the world is increasingly earning the trust of the general population, and this is happening specifically because of the leadership shown by some companies in the area of sustainability.
That's the conclusion of this year's "Trust Barometer," the detailed global survey published annually by communications firm Edelman.
"Now people have absorbed a truth: business can make money and improve economic and social conditions in a country," said Richard Edelman at a presentation of the Trust Barometer held at the Atlantic Council in Washington, DC. "This is very new."
A whopping 80 per cent of the more than 33,000 people surveyed worldwide expect that business can do both. Edelman concludes that sustainability represents an enormous opportunity for business executives as they assume a leadership role that government is effectively abdicating. Trust in business rose from an index of 48 to 53 last year, while trust in government grew only one point to an index of 42.
45 per cent of the population surveyed say business' contribution to the greater good is the reason their trust increased.
But while trust in business is growing, the global population wants more. 67 per cent of those surveyed feel that business is too focused on short-term financial results, and 57 per cent feel that business is not focused enough on its long-term impact on society.
Edelman has identified four areas where business can work to improve its leadership and the public's trust: actions, values, engagement, and employee advocacy. Through specific actions, such as job creation, executives should help solve economic and social problems. They should make a "human connection" with the public by articulating their values and telling their personal stories. Leaders need to engage the public through industry conferences, interviews and blogs.
And perhaps most important, they need to manage their companies fairly and earn the confidence of all their employees. Edelman says about one-third of all employees do not trust the company they work for, and also notes that employees are the most trusted sources of information on corporate performance and business practices. (They outrank the CEO, activist consumers, academics and media spokespersons as a credible source of facts.) This means a CEO needs to cultivate the trust of her employees. "When a CEO is engaged in addressing societal issues," reads the executive summary of the Trust Barometer, "an employee's motivation to perform escalates by 22 points. Similarly, an employee's willingness to stay working for the company climbs 22 points, and inclination to recommend the company as an employer grows by 25 points."
Corporate improvement in these four areas is all the more necessary, Edelman points out, because the pyramid of influence has flipped: the global population once listened to a set of authority figures at the top of the pyramid, but now we pay no attention to what authority figures think and only trust our peers, our social media family. This means business executives can no longer afford to communicate whatever and whenever they want; they must proactively court the general public and do so continually. They need to win the trust of the grassroots - whose ranks might include their future employees and customers - with personal honesty and integrity.
Encouragingly, business has been moving in this direction. "A silent revolution has been going on for over a decade," says Georg Kell, the founder and former Executive Director of the United Nations Global Compact, "a very big transformation from within." Business has been repositioning its mission to include purpose, community work, and values.
Perhaps the most striking takeaway of the 2016 Edelman Trust Barometer, however, is the "inequality of trust" that goes hand in hand with income inequality. As the wealth divide between the elite, informed public and the rest of the population widens, so does the gap in their trust of institutions. Over time, the elite's trust in government, business and the media is rising much more than that of the less well informed public. As people are left behind economically, their trust in leadership wavers. They do not feel they are being taken care of or represented.
This trust gap is global, but nowhere is it rising faster and becoming more pronounced than in the United States. Anyone wondering why the American electorate is veering away from "establishment" candidates should consult the Edelman Trust Barometer.