Lack of faith in societal institutions triggered by economic anxiety, disinformation, mass-class divide, and a failure of leadership has brought us to where we are today—deeply polarized. Trust in government institutions has eroded dramatically as an increasing number of people have found themselves struggling with those difficult realities. Trust in the workplace, on the other hand, has continued to grow, often in unexpected ways. Against this backdrop, the 2023 Edelman Trust Barometer reveals that business is now viewed as the only global institution to be both competent and ethical, leaving businesses to fill the void left by government and take action on societal issues. As distrust continues to grow, it's important for business leaders to understand these sentiments and work to recognize how their own practices can better address the concerns of the public.
Why building (and rebuilding) trust matters for business
When businesses build trust, they see better outcomes. The LRN Benchmark of Ethical Culture report found that companies with the strongest ethical cultures outperform —by approximately 40%—across all measures of business performance, including levels of customer satisfaction, employee loyalty, innovation, adaptability, and growth.
Building trust in the workplace has also become increasingly important to workers. According to LRN research, employees in organizations with healthy ethical cultures are 1.8x more likely to report their concerns to their immediate manager—a strong indicator of trust, as employees have faith that their concerns will be fully heard, considered, and properly managed. That means that those businesses are in the ideal position to continue to build rapport and a strong ethical culture within the organization.
Top 10 takeaways from the 2023 Edelman Trust Barometer
Let's explore the key findings from Edelman's report and unpack how organizations can help rebuild trust moving forward.
Business is seen as competent and ethical
For the third year in a row, Edelman’s Trust Barometer found that business remains the most trusted institution globally. At 62%, it is the only institution viewed as both competent and ethical. Business now holds a staggering 53-point lead over government in competence and has also increased its ethics score for the third straight year, rising 20 points since 2020. Several things have contributed to that increase in trust in competence and ethics, including treatment of workers during the pandemic and return to work. Furthermore, the swift and decisive action of over 1,000 businesses to exit Russia after its invasion of Ukraine helped fuel the 20-point jump on ethics over the past three years.
Trust levels in other institutions are much lower. Media and government are seen as particularly unethical and incompetent in addressing societal problems, while NGOs are perceived as ethical but less competent. Media, for example, has just a 50% trust rate in all the countries surveyed, due in part to misinformation or highly politicized information spread over the past several years. In some countries, that trust is even lower—including Germany (47%), the US (43%), Australia (38%), and South Korea (27%). Meanwhile, NGOs continue to receive a high level of trust as they work to correct perceived imbalances and tend to stand for key areas that matter to citizens, but may not have the resources needed to achieve lasting, large-scale change.
Institutional imbalance around the world
Globally, there is an 11-point gap between trust in business and trust in government in Edelman’s 2023 report: 62% vs. 51%. Government is now distrusted in 16 of the 28 countries surveyed, including the US (42%), the UK (37%), Japan (33%), and Argentina (20%). This comes in the wake of years of misinformation and what many people view as poor handling of the challenges faced over those previous years.
On the other hand, “my employer” (77%) is the most trusted institution in nearly every country surveyed. Increasingly, employees turn to their employers as a trusted source of information and leadership, particularly during difficult periods of time. Employees have noted that their employers tend to provide them with immediate, actionable information about the challenges in front of them based on available data. As a result, employees generally have a higher degree of trust in their employers than they do in slower-moving institutions, which may not have similar resources.
Mass-class divide in trust
Edelman’s report also noted a growing chasm between economic classes when it comes to institutional trust. According to the report, there is now a double-digit trust gap in three quarters of the countries surveyed where those with a high-income are more trusting, on average, of societal institutions than low-income respondents High-income earners' average trust in institutions has soared from 50% to 62% since 2012, while low-income earners have struggled, with the trust index rising only slightly from 43% to 48%.
Economic optimism collapses
Around the world, economic optimism has declined significantly due to rising inflation in the wake of the pandemic. In 24 of the 28 countries that Edelman surveyed, confidence in the economy has plummeted to all-time lows. Personal economic fears such as job loss (89%) and inflation (74%) are on par with urgent societal fears like climate change (76%), nuclear war (72%) and food shortages (67%). And 40% of global respondents say they and their families will be better off in five years—a 10-point decline from 2022.
Polarization is most severe when divisions become entrenched
Six countries surveyed—including the US—are severely polarized, and nine are at risk of severe polarization. The 2023 Trust Barometer deems nearly one quarter of the countries surveyed as severely polarized, including the US, Colombia, Argentina, South Africa, Sweden, and Spain. Much of this polarization results from increasing political and social division in each of these countries over the past several years. Globally, nearly two thirds observe an unprecedented lack of civility and mutual respect in society.
Social fabric weakens amid deepening divisions
A shared media environment has given way to echo chambers, making it harder to collaboratively solve problems. The 2023 Trust Barometer also noted that there is especially low trust in social media. This lack of social unity has led to increasing division and the inability to bring people together to address the challenges identified in other areas, including economic fears, societal fears, and other rising concerns. Among respondents, 62% say that the social fabric that once held their country together has grown too weak to serve as a foundation for unity.
Ideology becomes identity
The observed lack of civility identified in the report coincides with ideology becoming identity: among those who feel strongly about an issue, less than one third of respondents say they would help (30%), live near (20%) or work with (20%) someone who strongly disagrees with their point of view. This focus on ideology as part of the identity has also weakened the social fabric that helps hold people together.
People want business to do more
Amidst all this division and polarization, people are increasingly looking to businesses as a source of solutions for the challenges faced by society as a whole. By a six-to-one margin, on average, respondents want more societal involvement by business on issues such as climate change, economic inequality, and workforce reskilling. In many cases, people believe that businesses are the entities with the resources, the connection, and the commitment to accomplish real, lasting change that has the power to improve societal issues and address those rising concerns.
Business is at risk of appearing politicized when addressing societal issues
Though most respondents expect business to do more in solving societal problems, many agree that to achieve this likely requires businesses to get political. In fact, more than half (52%) of respondents do not believe business can avoid being politicized when it addresses contentious societal issues. Rather, they expect companies to take political stances in order to drive essential change.
Battle for truth: Business should hold divisive forces accountable
Even if it means running the risk of being deemed “too political,” businesses are believe to be a driving force in advancing social goods. Nearly two-thirds (64%) of respondents say companies can help increase civility and strengthen the social fabric by supporting politicians and media outlets that build consensus and cooperation. CEOs are also expected to use resources to hold divisive forces accountable: 72% believe CEOs are obligated to defend facts and expose questionable science being used to justify bad social policy; and 71% believe CEOs are obligated to pull advertising money out of media platforms that spread misinformation. By taking these kinds of steps, businesses can help create positive change. Just as consumers choose to "vote with their dollars" and decrease spending to companies they do not support, CEOs of those organizations have the potential to improve the flow of information and create solutions with the way they choose to manage their spending.
The key takeaway
Businesses that build trust can help mend the growing societal divide and restore economic optimism—provided that they make the investment in creating more ethical cultures. But real change starts from within; if businesses want to play a role in creating lasting societal change, they have to start with addressing their own culture and levels of trust. Download the LRN Benchmark of Ethical Culture to learn how to create a strong and compelling case for your business to invest in building more rigor in the management of ethical culture.