You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio Safe to say that we are constantly trying to figure out what the outlook is. And Tim, we've been excited about getting into earnings. We've heard from the big banks and a few others. But talking to those ceo s, hearing what they have to say about the outlook, that's the big question.
And look, we're getting here from a lot of companies, and I think people who are listening to these are nice calls, investors and analysts. They're going to be parsing commentary for not just for the numbers that we hear, but also for sentiment and the way that these executives feel about the coming year in the current quarter. I'm guessing our next guest here's a lot about sentiment. He is the founder and CEO of Edelman, the global communications giant.
Richard Edelman back with us on the phone in New York City. Richard, Happy new Ye're nice to have you here with Tim and myself. How are you. I'm great and very excited to talk about this trust parometer. Well, we're excited to have you on to talk about it, and we want to get into it and the specific findings. I just want to know. I'm curious, um, your team, you you talk to a lot of ceo s before we get into this survey. What are you hearing? What's
the sentiment? Is there some major theme or take away from some of the conversations you're having. I think that they feel quite optimistic about this year. Yes, of course there's inflation. Yes, of course there's going to be higher rates UM, but there's a lot of underlying demand. People have cash um and they want to spend it UM. So I think optimism is the word. Cautious, but optimistic.
You know what. We get to speak with you regularly, and we got updates to the trust barometer, and I think back to just hearing from you about a year ago, and I'm wondering, Richard, what the biggest difference between the findings this year versus last year? What really stuck out
to you as the big difference. Well, when six of our respondents say that their first reaction to any information is to distrust it, and two thirds say that they can't have a civil conversation anymore about issues, Uh, that's a problem, and it says basically that you know, media and government are in a death grip and its division and disinformation and politicization, and therefore business has to step
into the void. It's the stabilizing force. It's fascinating though, because as we went through things right over the last couple of years, business hasn't always been forefront that rate, or at the forefront or other times of It's interesting how people move around. What is it that seems to you know, impact people the most when it comes to who they trust. I think actually in the moment, it's
about competence. And you'll remember, Carol that when we talked in the height of the pandemic, it was government the most trusted institution, and government has disappointed and there's just a deep sense of well. On societal issues, we found that people want more business five to one on sustainability
and wages and race. We want more business and we didn't expect that, and we also didn't expect that two thirds of employees say, look, I want to work for a company whose values are equipaling are equivalent to mine, and two thirds of consumers are believed driven buyers and of institutional investors make e s G at the same level as operations and financials when they buy a stock. That's a huge shift in a year. You know, it's
interesting that you say that. And I had a conversation that's actually part of a Bloomberg event, uh that's happening tomorrow and this is with the CEO of a b InBev, but about their sustainability initiatives. And they are, you know, using marketing campaigns that actually pull in the consumers who
want in this case more organic beer. And you know, you buy a six pack and then they have I think it was six hectair hectaars or six acres or something where that it basically you know, they're going to help fund with farmers turn that over to organic farming. In other words, they're pull and consumers in to say you want this, we need your help to do it. Um. But it does feel like there's something changing, even more
so that relationship between consumer and business. Well, I think that in the moment of the demand is also for CEOs to stand up and speak up. That of our respondents said that they expect CEOs to lead and be visible. And this is actually a big change that CEOs, you know, last year we talked about, you know, standing up for the election results and um, now it's on Glasgow and cop and so again it's a big new demand on CEOs. I would only warn CEOs don't overreach. Focus on policy
and not politics. Because we saw for the first time Democrats trust bustance more than Republicans. Republican trust drove twelve points. So it's Democrats for the first time. All right, yeah, right, that's pretty significant. So you know, Richard, you guys do this sometimes, I think several times a year and if there's a special situation, which certainly throughout the pandemic, you tapped into your trust barometer to really get a feel
of how people were feeling where they were finding trust. Um, how do you use this in terms of talking with the CEOs that you guys work with and kind of getting an idea of where this economy is going with the market environment is going to be, Like, how do you use it? How do you you know, use it forward if you will? Well, I think we tried to
um persuade companies. For example, after the murder of George Floyd, we went right into the field and did a study of all parts of American population and We found that companies that stood up and spoke up in brands that made UM diverse, UM populations important got a seven times bump and trust. And so we said, you know, for instance, UM, you know KFC, and give them huge credit for creating
a fund. So it UM, if you're a black store manager, you could get equity from the company and then be able to buy a franchise that was a hundred million dollar fund. That's a big deal. That changes the game. The point is get companies to act because communications is just not enough. It seems greenwashing or anything else UM, and we can do better. I'm wondering what you've learned
about capitalism in this survey. I'm going through the trust parameter and I went through it earlier in the day today and it really hit me that more than half of the people you surveyed said that capitalism as it exists today does more harm than good in the world. So what concerns me is this growing divide between the top income who trust institutions a lot like and people in the lower lowest of income who don't trust institutions.
And the differences used to only be in the US, France, and UK, and now it's in Thailand and Saudi Arabia and Germany and Canada. And the reason is that people are afraid for their jobs. People told us that they are afraid of losing their job, either to automation or the pandemic. They're also afraid of downward economic mobility. Carol, can you believe that only four intend people in the democracies tell us that they believe their families are gonna
be better off in five years. That's well, the autocracies, you know, the China's and etcetera, people are that they're gonna be better off in five years. So we've got to show that the system works for everybody. Well, Richard, that's what's interesting too. And you know, among in this report you also get into China US trust divergence widening to an all time high. I think about this a
lot because these are your two giant economies. What they do, whether it's you know, on central bank policy, whether it's what they do, you know in terms of trade relationships, I mean, whatever they do. You feel it the ripple effects throughout the globe. How how volatile can can this metric be? Or have you seen a trend line in this one? Well? I think the United States trust over the last ten years has declined, and it's particularly declined
among Republicans. Democrats are a Republicans are at thirty three, lowest we've ever seen. And so in China, people believe that the government has done a good job in the pandemic, and they also see again that the economy is growing. And this trust number is deeply dependent on fairness and also upward economic mobility. And so we've got to show that the circular system works for all. And we've seen
big asset value increases. Right, your listeners, are all markets are robbed, your estates up like this, But a lot of the bottom have none of that, and they are looking at worse health outcomes and um, no more government uh subsidy because you know that's done, and they're nervous. You know, it's interesting about losing their jobs. It's interesting because Tim and I kicked off this show, Richard, you know, saying about when it comes to COVID. You know, in
terms of deaths, the US is doing the worst. Here. We are, this developed rich nation and we're having a tough time. What I wondered too, though about this China US division. I mean in some ways not apples to apples. But President g understands this idea and it's really looking to do something when it comes to a shared prosperity, Right, that's what they call it. Um. But he's but he's many would argue he's not wrong about that. Look, what we have right now is a recession of trust for
the democracies, and the autocracies are doing better on delivering. Now. I'm not in favor of system like that, but um, we have to show that democracy is actually confunctioned, um, and that politics can actually turn out good results. And we fought too much about the infrastructure bill that was the obvious one to improve competitiveness. And we have to also get the media to go back to authority. Bloomberg understands that, but you know, we can't be politicizing stories
and making it you know, news attainment. Well, and that's the other part of it, right, Tim. I don't know how you felt it going through the research and the findings media. I mean, we are it hurts, It does hurt, It really hurts. So what Look, I want to tap you for some advice, Richard Um. You know, what's your advice to people like Carol and me who are in positions like this, Well, I think that media has to get back to the having the role of authority as
opposed to chasing clicks. And it's not a popularity game. It's you know, telling us the truth so that we can act on it. And it's a vital part of the puzzle to solve for trust if people get quality information, and it's not just going to be through the media. They're not enough reporters anymore. Half of the reporters are
gone in local newspapers, etcetera. So we have to have government business and NGOs add to the puzzle, so that especially in social channels where there's disinformation, whether it's about like for example, on vaccination, so much disinformation on social and so if you're a company, and this is important, Carol, the most trusted institution is my employer, and my employer
CEO is the most trusted spokesperson. So let's use that and also use the company's health officer to talk about what should be done with is going back to the office or vaccination or anything else. They've definitely stepped up in terms of priority. Richard Edelman, thank you so much to be well. CEO at Edelman on the phone in New York City,