Not that long ago, if you were asked to name core business functions, the short list might include sales, marketing, and finance, among others. These days, a new one can be added: societal leadership.
More and more, the public looks to business and business leaders to take a leading role in addressing issues such as climate change and income inequality. Corporations are viewed in a different lens, no longer seen as entities that only deliver products and services, or value to shareholders.
The 2022 edition of the Edelman Trust Barometer underscores this trend. For the second year in a row, business is the most trusted entity, with stakeholders holding business accountable as they shop for products, make investment decisions, or apply for jobs.
The overall trust level for business remained steady, at 61 on a 1 to 100 scale, as trust in government and the media continued to erode.
"Restoring trust is going to require business to continue its societal role," Dave Samson, Edelman's vice-chairman of Corporate Affairs, said in a news release. "But even more, it will require all institutions to demonstrate tangible progress and restore belief in society's ability to build a better future for all, focus on long-term thinking over short-term benefits, and provide trustworthy, fact-based information."
Business, at a rating of 61, is the only "trusted" entity. The Edelman scale shows that an entity is trusted if its rating is 60 or higher, with 50–59 counted as neutral and 49 or lower labelled as distrusted. Nongovernmental organisations (NGOs) are next at 59, followed by government (52) and media (50).
Respondents believe CEOs should continue to take a prominent role, with 81% saying the executives "should be personally visible when discussing public policy with external stakeholders or work their company has done to benefit society."
The ratio of respondents who say business is "not doing enough" versus those who say business is "overstepping" is nearly 6 to 1 on climate change, recently named a top risk in a survey by the World Economic Forum. The ratio is at least 5 to 1 on economic inequality, workforce reskilling, and access to healthcare.
And far more believe business is a highly effective agent of positive change as opposed to being an ineffective agent. Businesses are seeing evidence that reporting on environmental, social, and governance (ESG) issues is increasingly important to stakeholders, and the Edelman statistics bear that out.
In the report, respondents based the following decisions on their beliefs and values:
- Buy or advocate for brands (58%).
- Choose a place to work (60%).
- Invest (64%).
The Edelman report also showed that "communications from my employer" are now the most trusted source of information; social media feeds are the least trusted. Technology (74%) was the most trusted sector, followed by education (69%) and healthcare (69%).
— To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.