Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio Safe to
Speaker 1: say that we are constantly trying to figure out what
Speaker 1: the outlook is. And Tim, we've been excited about getting
Speaker 1: into earnings. We've heard from the big banks and a
Speaker 1: few others. But talking to those ceo s, hearing what
Speaker 1: they have to say about the outlook, that's the big question.
Speaker 1: And look, we're getting here from a lot of companies,
Speaker 1: and I think people who are listening to these are
Speaker 1: nice calls, investors and analysts. They're going to be parsing
Speaker 1: commentary for not just for the numbers that we hear,
Speaker 1: but also for sentiment and the way that these executives
Speaker 1: feel about the coming year in the current quarter. I'm
Speaker 1: guessing our next guest here's a lot about sentiment. He
Speaker 1: is the founder and CEO of Edelman, the global communications giant.
Speaker 1: Richard Edelman back with us on the phone in New
Speaker 1: York City. Richard, Happy new Ye're nice to have you
Speaker 1: here with Tim and myself. How are you. I'm great
Speaker 1: and very excited to talk about this trust parometer. Well,
Speaker 1: we're excited to have you on to talk about it,
Speaker 1: and we want to get into it and the specific findings.
Speaker 1: I just want to know. I'm curious, um, your team,
Speaker 1: you you talk to a lot of ceo s before
Speaker 1: we get into this survey. What are you hearing? What's
Speaker 1: the sentiment? Is there some major theme or take away
Speaker 1: from some of the conversations you're having. I think that
Speaker 1: they feel quite optimistic about this year. Yes, of course
Speaker 1: there's inflation. Yes, of course there's going to be higher
Speaker 1: rates UM, but there's a lot of underlying demand. People
Speaker 1: have cash um and they want to spend it UM.
Speaker 1: So I think optimism is the word. Cautious, but optimistic.
Speaker 1: You know what. We get to speak with you regularly,
Speaker 1: and we got updates to the trust barometer, and I
Speaker 1: think back to just hearing from you about a year ago,
Speaker 1: and I'm wondering, Richard, what the biggest difference between the
Speaker 1: findings this year versus last year? What really stuck out
Speaker 1: to you as the big difference. Well, when six of
Speaker 1: our respondents say that their first reaction to any information
Speaker 1: is to distrust it, and two thirds say that they
Speaker 1: can't have a civil conversation anymore about issues, Uh, that's
Speaker 1: a problem, and it says basically that you know, media
Speaker 1: and government are in a death grip and its division
Speaker 1: and disinformation and politicization, and therefore business has to step
Speaker 1: into the void. It's the stabilizing force. It's fascinating though,
Speaker 1: because as we went through things right over the last
Speaker 1: couple of years, business hasn't always been forefront that rate,
Speaker 1: or at the forefront or other times of It's interesting
Speaker 1: how people move around. What is it that seems to
Speaker 1: you know, impact people the most when it comes to
Speaker 1: who they trust. I think actually in the moment, it's
Speaker 1: about competence. And you'll remember, Carol that when we talked
Speaker 1: in the height of the pandemic, it was government the
Speaker 1: most trusted institution, and government has disappointed and there's just
Speaker 1: a deep sense of well. On societal issues, we found
Speaker 1: that people want more business five to one on sustainability
Speaker 1: and wages and race. We want more business and we
Speaker 1: didn't expect that, and we also didn't expect that two
Speaker 1: thirds of employees say, look, I want to work for
Speaker 1: a company whose values are equipaling are equivalent to mine,
Speaker 1: and two thirds of consumers are believed driven buyers and
Speaker 1: of institutional investors make e s G at the same
Speaker 1: level as operations and financials when they buy a stock.
Speaker 1: That's a huge shift in a year. You know, it's
Speaker 1: interesting that you say that. And I had a conversation
Speaker 1: that's actually part of a Bloomberg event, uh that's happening
Speaker 1: tomorrow and this is with the CEO of a b InBev,
Speaker 1: but about their sustainability initiatives. And they are, you know,
Speaker 1: using marketing campaigns that actually pull in the consumers who
Speaker 1: want in this case more organic beer. And you know,
Speaker 1: you buy a six pack and then they have I
Speaker 1: think it was six hectair hectaars or six acres or
Speaker 1: something where that it basically you know, they're going to
Speaker 1: help fund with farmers turn that over to organic farming.
Speaker 1: In other words, they're pull and consumers in to say
Speaker 1: you want this, we need your help to do it. Um.
Speaker 1: But it does feel like there's something changing, even more
Speaker 1: so that relationship between consumer and business. Well, I think
Speaker 1: that in the moment of the demand is also for
Speaker 1: CEOs to stand up and speak up. That of our
Speaker 1: respondents said that they expect CEOs to lead and be visible.
Speaker 1: And this is actually a big change that CEOs, you know,
Speaker 1: last year we talked about, you know, standing up for
Speaker 1: the election results and um, now it's on Glasgow and
Speaker 1: cop and so again it's a big new demand on CEOs.
Speaker 1: I would only warn CEOs don't overreach. Focus on policy
Speaker 1: and not politics. Because we saw for the first time
Speaker 1: Democrats trust bustance more than Republicans. Republican trust drove twelve points.
Speaker 1: So it's Democrats for the first time. All right, yeah, right,
Speaker 1: that's pretty significant. So you know, Richard, you guys do
Speaker 1: this sometimes, I think several times a year and if
Speaker 1: there's a special situation, which certainly throughout the pandemic, you
Speaker 1: tapped into your trust barometer to really get a feel
Speaker 1: of how people were feeling where they were finding trust. Um,
Speaker 1: how do you use this in terms of talking with
Speaker 1: the CEOs that you guys work with and kind of
Speaker 1: getting an idea of where this economy is going with
Speaker 1: the market environment is going to be, Like, how do
Speaker 1: you use it? How do you you know, use it
Speaker 1: forward if you will? Well, I think we tried to
Speaker 1: um persuade companies. For example, after the murder of George Floyd,
Speaker 1: we went right into the field and did a study
Speaker 1: of all parts of American population and We found that
Speaker 1: companies that stood up and spoke up in brands that
Speaker 1: made UM diverse, UM populations important got a seven times
Speaker 1: bump and trust. And so we said, you know, for instance, UM,
Speaker 1: you know KFC, and give them huge credit for creating
Speaker 1: a fund. So it UM, if you're a black store manager,
Speaker 1: you could get equity from the company and then be
Speaker 1: able to buy a franchise that was a hundred million
Speaker 1: dollar fund. That's a big deal. That changes the game.
Speaker 1: The point is get companies to act because communications is
Speaker 1: just not enough. It seems greenwashing or anything else UM,
Speaker 1: and we can do better. I'm wondering what you've learned
Speaker 1: about capitalism in this survey. I'm going through the trust
Speaker 1: parameter and I went through it earlier in the day
Speaker 1: today and it really hit me that more than half
Speaker 1: of the people you surveyed said that capitalism as it
Speaker 1: exists today does more harm than good in the world.
Speaker 1: So what concerns me is this growing divide between the
Speaker 1: top income who trust institutions a lot like and people
Speaker 1: in the lower lowest of income who don't trust institutions.
Speaker 1: And the differences used to only be in the US, France,
Speaker 1: and UK, and now it's in Thailand and Saudi Arabia
Speaker 1: and Germany and Canada. And the reason is that people
Speaker 1: are afraid for their jobs. People told us that they
Speaker 1: are afraid of losing their job, either to automation or
Speaker 1: the pandemic. They're also afraid of downward economic mobility. Carol,
Speaker 1: can you believe that only four intend people in the
Speaker 1: democracies tell us that they believe their families are gonna
Speaker 1: be better off in five years. That's well, the autocracies,
Speaker 1: you know, the China's and etcetera, people are that they're
Speaker 1: gonna be better off in five years. So we've got
Speaker 1: to show that the system works for everybody. Well, Richard,
Speaker 1: that's what's interesting too. And you know, among in this
Speaker 1: report you also get into China US trust divergence widening
Speaker 1: to an all time high. I think about this a
Speaker 1: lot because these are your two giant economies. What they do,
Speaker 1: whether it's you know, on central bank policy, whether it's
Speaker 1: what they do, you know in terms of trade relationships,
Speaker 1: I mean, whatever they do. You feel it the ripple
Speaker 1: effects throughout the globe. How how volatile can can this
Speaker 1: metric be? Or have you seen a trend line in
Speaker 1: this one? Well? I think the United States trust over
Speaker 1: the last ten years has declined, and it's particularly declined
Speaker 1: among Republicans. Democrats are a Republicans are at thirty three,
Speaker 1: lowest we've ever seen. And so in China, people believe
Speaker 1: that the government has done a good job in the pandemic,
Speaker 1: and they also see again that the economy is growing.
Speaker 1: And this trust number is deeply dependent on fairness and
Speaker 1: also upward economic mobility. And so we've got to show
Speaker 1: that the circular system works for all. And we've seen
Speaker 1: big asset value increases. Right, your listeners, are all markets
Speaker 1: are robbed, your estates up like this, But a lot
Speaker 1: of the bottom have none of that, and they are
Speaker 1: looking at worse health outcomes and um, no more government
Speaker 1: uh subsidy because you know that's done, and they're nervous.
Speaker 1: You know, it's interesting about losing their jobs. It's interesting
Speaker 1: because Tim and I kicked off this show, Richard, you know,
Speaker 1: saying about when it comes to COVID. You know, in
Speaker 1: terms of deaths, the US is doing the worst. Here.
Speaker 1: We are, this developed rich nation and we're having a
Speaker 1: tough time. What I wondered too, though about this China
Speaker 1: US division. I mean in some ways not apples to apples.
Speaker 1: But President g understands this idea and it's really looking
Speaker 1: to do something when it comes to a shared prosperity, Right,
Speaker 1: that's what they call it. Um. But he's but he's
Speaker 1: many would argue he's not wrong about that. Look, what
Speaker 1: we have right now is a recession of trust for
Speaker 1: the democracies, and the autocracies are doing better on delivering. Now.
Speaker 1: I'm not in favor of system like that, but um,
Speaker 1: we have to show that democracy is actually confunctioned, um,
Speaker 1: and that politics can actually turn out good results. And
Speaker 1: we fought too much about the infrastructure bill that was
Speaker 1: the obvious one to improve competitiveness. And we have to
Speaker 1: also get the media to go back to authority. Bloomberg
Speaker 1: understands that, but you know, we can't be politicizing stories
Speaker 1: and making it you know, news attainment. Well, and that's
Speaker 1: the other part of it, right, Tim. I don't know
Speaker 1: how you felt it going through the research and the
Speaker 1: findings media. I mean, we are it hurts, It does hurt,
Speaker 1: It really hurts. So what Look, I want to tap
Speaker 1: you for some advice, Richard Um. You know, what's your
Speaker 1: advice to people like Carol and me who are in
Speaker 1: positions like this, Well, I think that media has to
Speaker 1: get back to the having the role of authority as
Speaker 1: opposed to chasing clicks. And it's not a popularity game.
Speaker 1: It's you know, telling us the truth so that we
Speaker 1: can act on it. And it's a vital part of
Speaker 1: the puzzle to solve for trust if people get quality information,
Speaker 1: and it's not just going to be through the media.
Speaker 1: They're not enough reporters anymore. Half of the reporters are
Speaker 1: gone in local newspapers, etcetera. So we have to have
Speaker 1: government business and NGOs add to the puzzle, so that
Speaker 1: especially in social channels where there's disinformation, whether it's about
Speaker 1: like for example, on vaccination, so much disinformation on social
Speaker 1: and so if you're a company, and this is important, Carol,
Speaker 1: the most trusted institution is my employer, and my employer
Speaker 1: CEO is the most trusted spokesperson. So let's use that
Speaker 1: and also use the company's health officer to talk about
Speaker 1: what should be done with is going back to the
Speaker 1: office or vaccination or anything else. They've definitely stepped up
Speaker 1: in terms of priority. Richard Edelman, thank you so much
Speaker 1: to be well. CEO at Edelman on the phone in
Speaker 1: New York City,