Edelman Trust Barometer 2020 reveals that growing feelings of inequality are undermining trust in institutions.
The 2020 Edelman Trust Barometer reveals that regardless of whether we live in a strong economy and enjoy high employment rates, most respondents in developed markets do not believe the situation will improve within five years. Furthermore, 56 percent believe that capitalism in its current form has more negative than positive consequences.
“We are currently experiencing a trust paradox,” said Richard Edelman, CEO of Edelman. “Since we created the study 20 years ago, economic growth has been the basis for increased confidence levels. This is still true in Asia and the Middle East, but not in developed markets. In these markets, income inequality has become the most important factor. Fears are stifling hope, and long-held assumptions about work and mobility are becoming invalid.”
Some conclusions from the 2020 Edelman Trust Barometer
The concerns are wide-ranging and deep-seated. Most employees (83 percent) are worried about losing their jobs to automation. With the possibility of a recession, lack of training, lower-priced foreign competition, immigration, and the gig economy. Fifty-seven percent of respondents are concerned about losing the respect and dignity they once had in their country. Nearly two in three feel that the pace of technological change is too fast. Furthermore, there are no longer any universal truths: 76 percent admit to being afraid that fake news will be used as a weapon.
A record number of countries are seeing a record divide in confidence levels among the largest class. Thus, there is a feeling of contamination from developed countries to developing ones. Globally, there is a 14-point gap between the most informed public (65) and the general population (51). There are double-digit gaps in 23 markets, including Australia (23), France (21), Saudi Arabia (21), Germany (20), the United Kingdom (18), and Spain (17).
Companies (58 percent) represent the institutions that enjoy the highest level of trust, assuming a leadership role in global governance. The most recent decisions that have enabled American multinationals to adopt a stakeholder model, the launch of Business for Inclusive Growth, focused on fair wages in France, and the Business Ambition for 1.5°C initiative are testament to the broader responsibility of corporations.
End of business as usual?
“Companies are filling the void left by populism and partisan governments,” said Richard Edelman. “It’s no longer ‘business as usual,’ focused solely on profitability for shareholders. With 73 percent of employees saying they want to benefit from opportunities to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate is changing.”
CEOs must take a leadership role. Ninety-two percent of employees say CEOs should speak out on important issues such as the role of education, the ethical use of technology, or pay inequality. In addition, three-quarters of the general population believe CEOs should lead this effort for change rather than waiting for the government to take on that role.
“People’s expectations of institutions have led us to evolve our model for measuring trust,” Edelman said. “Trust is now earned through two distinct attributes: competence (delivering on promises) and ethical behavior (doing the right thing and working to improve society). It’s no longer just about what we can do—it’s also about how we do it.”
Results of the 2020 Edelman Trust Barometer
This year’s results reveal that none of the four institutions are seen as competent and ethical. Companies achieve the highest competence rankings, with a significant advantage of 54 points over governments (64% vs. 10%). NGOs lead in ethical behavior compared to governments (31-point lead) and companies (25-point lead). Governments are seen as incompetent and unethical. This result is more than twice that of companies in protecting the environment and reducing income inequality. The media are also seen as incompetent and unethical. The majority (57%) do not believe that the media do a good job of separating opinions from facts. However, they admit that they are an essential means of disseminating news (58%).
“After monitoring 40 global companies over the past year through the Edelman Trust Management network, we learned that ethical drivers such as integrity, loyalty, and purpose account for 76% of trust capital in companies, while competence accounts for only 24%,” said Antoine Harary, president of Edelman Intelligence. “Trust is directly linked to doing the right thing. The battle for trust will take place in the field of ethical behavior.”
Other findings from the 2020 Edelman Trust Barometer
- Both companies and governments can take specific steps to improve trust levels. Respondents expect companies to focus on fairer compensation policies and professional training. For governments, actions focus on reducing the perception of “partisan governments,” responding to real community problems, and partnering with companies and NGOs.
- Local government bodies (54%) enjoy higher trust ratings than central or federal governments (51%).
- Although governments rank alongside the media as the least trusted institutions, they are still considered the most appropriate means of responding to challenges such as health (53%), wage inequality (51%), immigration (48%), harmful products (42%), and difficulties with inclusion (41%).
- Technology (75%) remains the sector with the highest level of trust, but it also saw the biggest overall decline—four points. Some countries saw dramatic declines, such as France (-10 points), Canada (-8), Italy (-8), Singapore (-8), Russia (-8), and the US (-7). Furthermore, technology is no longer the sector that enjoys the highest level of trust in 9 of the 28 countries in the study. This is the case in Australia, Canada, Hong Kong, Russia, Italy, Ireland, Singapore, the Netherlands, and the United Kingdom.
- No institution has the vision for the future that most respondents share. Not the government (35%), the media (35%), businesses (41), or even NGOs (45%).
