Jan 20, 2020 - Economy

A global trust crisis

Illustration: Rebecca Zisser/Axios

Established institutions like the media and government are no longer seen as competent or ethical enough to address crises like climate change and health care, according to Edelman's 2020 Trust Barometer study. So businesses are leading the way.

Between the lines: The survey shows a stark class divide — a growing gap in institutional trust between wealthier, more educated and better informed people vs. the rest of the population.

For the first time, a record number of developed countries, including Australia, France, Germany and the UK, are experiencing double digit divides in trust between the informed class and the mass population.

Around the world, business is considered the most trusted institution. In the U.S., there are plenty of examples of business filling the void left by other institutions.

  • BlackRock CEO Larry Fink surprised Wall Street last week when he released his annual letter to CEOs and clients announcing that it would make sustainability its new standard for investing.
  • In August, 181 of the nation’s top CEOs agreed to embrace a new business model in which driving shareholder value is no longer their sole business objective. Rather, service to society, communities and employees would become a top priority.

Yes, but: Even though people around the world say they increasingly trust corporations to solve problems, they also say they don't trust capitalism.

  • 57% of people globally believe that capitalism as it exists today "does more harm than good in the world." The percentage of people who think capitalism is working for them is down year over year by 3%.

Declining trust in media also contributes to the trust gap between the informed public and the public at large, according to the survey.

  • 57% of people globally believe that the media they use is "contaminated with untrustworthy information." and the vast majority (76%) worry about false information or fake news being used as a weapon.

The bottom line: “We are living in a trust paradox,” said Richard Edelman, CEO of Edelman in a press release. “Fears are stifling hope, as long-held assumptions about hard work leading to upward mobility are now invalid.”

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