Edelman Trust Report Gets Grim

The 2020 Edelman Trust Barometer arrived Monday morning, so ethics and compliance professionals should give it a read. The report paints an uncomfortable picture of distrust in business and government, with implications for how senior leaders demonstrate ethical commitment — and how challenging it can be to convince people that corporate commitment to good conduct is sincere.

Let’s start with the report itself. Edelman has published its Trust Barometer for 20 years, this year surveying more than 34,000 people in 28 countries around the world. The report asks people how much trust they place in business, government, the media, and other institutions; and does a great job mapping those results against broader social, economic, and political trends gripping the world. 

The report arrives every January and should be a must-read item for anyone tasked with training or guiding large groups of people. Some of the findings most relevant for ethics and compliance professionals:

Trust in all institutions ticked up incrementally for the world as a whole, but distrust is growing in large, prosperous countries. Edelman’s single broadest measure of trust rose from 53 in 2019 to 54 in 2020 (on a scale of 1 to 100). But within that global headline number, countries such as the United States, Britain, Canada, and Australia all saw their national numbers fall. Countries such as Germany, France, and Japan did see their trust numbers rise, but were still below 50 — which places them in the “generally distrust” category.

A trust gap is emerging between well-educated people and everyone else. Roughly 25 percent of all Edelman respondents fall into an “informed public” demographic, which Edelman defines as college-educated, upper-income people who consume news media every day. Those people generally do trust institutions — while everyone else is moving in the opposite direction. For example, 70 percent of the informed public worldwide generally trusts business. For the mass population, that number is 55 percent.

Businesses are seen as competent, but not ethical. Talk about being damned with faint praise! Businesses are the only institution perceived as competent, but mostly to generate value for owners. They are not seen as ethical by the general public. See chart, below.

 

People do trust in their individual employer. While people might not trust business all that much overall, 76 percent do trust their specific employer. That’s up 1 point from last year, and far better than any category of institution generally. 

Consumers expect brands to take a stand on social issues and then act. Sixty-four percent of consumers now identify as “belief-driven buyers” who will make purchasing choices based on a company’s stand on various social issues. That 64 percent holds steady from last year, but it’s up sharply from 2018. 

Trust and Implications for Compliance

The Edelman Trust Barometer is so useful because it paints such a large picture. Its findings can help ethics and compliance professionals understand how whole view companies, governments, and even each other overall — and from there, we can start to understand the specific trends a business will need to confront if it wants to build durable bonds of trust among employees, customers, and the public.

For example, this year’s Trust Barometer shows deep unease with the tech sector. Sixty-one percent of people believe technology is changing too fast; another 61 percent believe government doesn’t understand emerging technologies will enough to regulate them effectively.

If you’re a business in the tech sector, statistics like that cannot be ignored. They’re at the root of why regulators in Europe and Washington are investigating giants like Google and Facebook. They’re why local governments are banning the use of facial recognition technology in public services,  or enacting “gig economy laws” like AB 5 in California. 

Beyond the tech sector, it’s becoming increasingly clear that people expect businesses — and specifically their businesses, where they work — to address sticky social issues such as climate change, pay equity, and employment security. A company can’t do that until it decides what its stance will actually be. That’s going to be hard.

This will put pressure on CEOs, which is a point compliance officers might want to raise in the next executive committee meeting. Employees do trust their companies, but they also want their companies to take stronger stances on pressing social issues. 

The CEO will have to be the one who does that. He or she will need to translate a lofty ethical idea into specific business strategy, and in such a way that employees can see that the company is taking a stand. See chart, below.

 

What happens if companies don’t respond to these trends? Cynicism takes root. Employees tune out all those flowery exhortations to better behavior. They form alliances with other stakeholders cynical about the company’s true intentions, and start holding the company accountable from the outside rather than from within.