Consumers are gaining trust in businesses around the world above nonprofits, government and media, according to this year’s Edelman Trust Barometer.
The news puts a new spotlight on how CEOs continue to feel pressure to take the lead on a range of societal issues.
“The increased level of trust in business brings with it higher-than-ever expectations of CEOs to be a leading voice on societal issues,” Richard Edelman, CEO of Edelman, said in a press release, noting on topics including climate change, economic inequality and workforce reskilling.
PR giant Edelman, which surveyed 32,000 adults in more than two dozen countries, argued that societal leadership is now a core function of business. But the survey results also raised questions like how much responsibility corporations should really take on, how they should work alongside the government, what deeper conversations need to take place, and how to avoid greenwashing.
“It’s a double edged sword that CEOs face,” said Jonathan Anastas, board chairman of Alpha Metaverse Technologies Inc. “There is an opportunity for business leaders to leverage this trust to create better brand love and company loyalty by becoming public activists with their dollars, investments and choices in the things their customers like. However, there is a risk in this where businesses can get sucked into the polarization cycle, which can damage a view of trust.”
Do we get back to the days of staying quiet and selling things? That’s not what experts are suggesting.
Instead, Alison Taylor, clinical professor at NYU Stern School of Business who researches business ethics, says there needs to be a more serious discussion about what businesses are expected to do in terms of social responsibility and what the government needs to do in terms of laws and policies for change to really happen.
“It’s not enough to say we have a lot of societal problems and people don’t trust the government anymore so therefore businesses need to solve those problems,” said Taylor. “We need to have a more serious discussion about what is a policy responsibility and what is the responsibility of business and where that line should sit. We’re not having that conversation.”
Edelman does suggest a path forward that includes businesses collaborating with the government to “deliver results that push us towards a more just, secure, and thriving society,” according to the report. More than 40% in the survey believe governments and companies must work together to solve social issues, with the onus on the most trusted institution — business — to bring people together. Anastas said that there isn’t just one path for every company or CEO to do this.
“CEOs need to follow their own moral compass, but that moral compass needs to be informed by what their customers believe if they want to make that moral compass public,” said Anastas.
It’s true that not every corporation will always have their morals and ethics in line when it comes to social responsibility. Many companies talk the talk but don’t walk the walk. Greenwashing, a form of advertising or marketing spin in which green PR and green marketing are deceptively used to persuade the public that an organization’s products, aims and policies are environmentally friendly, is something consumers need to be aware of.
“Companies might tell stories that people want to hear and maybe exaggerate their commitments,” said Taylor. “I would rather see CEOs think very seriously about what kind of environmental and social challenges they can and cannot solve. Rather than promising they can solve all of society’s challenges, maybe focus on things that are really important to their business.”
Leaders might do that by considering time off to vote or for civic engagement, which would in turn encourage corporations and government to work together rather than having people trust one more significantly than the other.
Meanwhile, others are asking if we should even trust the survey itself.
“There is a very obvious agenda for a PR firm like Edelman to try and send these messages to businesses because there is a lot of work and money in helping businesses with PR strategies making them look like they are responsible today,” said Taylor.
Adam Stoverink, director of Walton MBA programs at the University of Arkansas, argued otherwise, largely due to the fact that businesses haven’t always been on the top of the trust scale until recent years. The online survey is now in its 23rd year, which Stoverink also says helps its credibility.
With businesses gaining more trust than the government for another year, there comes more responsibility.
“Throughout history, businesses have had a psychological contract with society, where society gives them critical human resources that are educated, trained and talented, and society expects them to return the favor by investing in the community and doing things that make societies better,” said Stoverink. “Business leaders need to recognize they have the power to make real positive changes.”