In many respects, 2021 was a year of suspended animation as the world struggled to regain its balance amid a global pandemic, devastating climate events and worsening political tensions. In fact, 2021 marked the second year the COVID-19 crisis further ravaged people’s lives and livelihoods. It marked another year in which people’s fears over job loss and climate change continued to climb. And it marked another year in which the world’s collective trust in government — and media — continued to collapse as these two institutions fomented conflict and divisiveness. Consequently, the 2022 Edelman Trust Barometer now finds society locked in a vicious cycle of distrust with nearly 60 percent now saying their tendency is to distrust until they see evidence that something is trustworthy.
Business as a Stabilizing Force
In the face of these persistent challenges, 2021 saw business solidify its position (for the fourth straight year, at 61 percent) as the world’s most trusted of the four collective institutions of government, business, NGOs and the media, with “My Employer” beating them all at 77 percent. With government failing to lead on society’s biggest challenges, from climate change and reskilling to racial justice and trustworthy information, business has a unique opportunity to emerge as a critical stabilizing force. But the time to do so is fleeting, and this year’s study underscores the urgent need for business to step into the breach. Most respondents still want government to lead on Covid-19 vaccination, climate change, addressing systemic injustice, workforce reskilling and economic inequality. But less than half believe government is stepping up to the plate or achieving meaningful results.
all stakeholders want business to engage in finding solutions to societal issues.
At the same time, all stakeholders want business to engage in finding solutions to societal issues. This makes perfect sense: on competence, business now leads government by a 53-point margin and is viewed as more ethical than government by 26 points. More than half of consumers will buy or advocate for brands based on their beliefs, while six in 10 employees will choose employers based on shared beliefs and values. Expectations are high for CEOs to speak out publicly on social and political issues. But speaking out is not enough — a stunning 81 percent of respondents want CEOs to be front and center discussing public policy or what their companies have done to solve society’s problems.
But, in expanding its role on such issues, does business run the risk of overstepping its bounds?
But, in expanding its role on such issues, does business run the risk of overstepping its bounds? Not according to our Trust findings. Most strikingly, respondents say business is not doing enough to address societal issues — climate change (52 percent), economic inequality (49 percent) trustworthy information (42 percent) and reskilling (46 percent), addressing systemic injustice and greater access to healthcare (42 percent).
So, what’s the path forward for business?
A New Mandate for Business
Many might find it hard to envision that 2022 could shape up as another year of profound change — on a level equal to or greater than what we have experienced over the last 24 months. But if the last two years have taught us anything, it is that Milton Friedman was wrong about the fundamental purpose of business, especially in today’s complex world. Maximizing shareholder profit will always be important, but to break the cycle of distrust, business must embrace stakeholder capitalism and recognize its equal obligations to all stakeholders—consumers, employees, communities, and investors.
More specifically, business must:
- Double down on Purpose and ESG at the core of business strategy
- Actively work to address society’s most pressing issues, such as climate change, by decarbonizing its operations and supply chains, moving from pledges to action
- Lean in on partnering across institutions — government, NGOs, and media — to forge common ground, foster innovation and drive impact
- Lead with trustworthy and quality information, modeling responsible communication
Business at a Crossroads
CEOs have always had to walk a fine line between exerting leadership on policy issues and being viewed as overly political. Right now, based on our findings the risk is doing little, not too much.
Business has a clear choice. One is the path of least resistance, in which leaders continue to gaze up at the mountain in the false hope others will take the climb, resulting in further public cynicism and perpetuating the cycle of distrust. The other is to embrace the mantle of leadership, enabling all institutions to regain solid footing to ascend the trail that will lead to a better future for all. If so, business will emerge as a truly stabilizing force for society. I think many would agree that the harder road is the only path worth pursuing.
Dave Samson is Global Vice Chairman, Corporate Affairs.