Trust hangs in the balance as Davos 2023 kicks off
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Greetings from Davos, which is staging the World Economic Forum’s annual meeting this week — and has just been unexpectedly blanketed with a thick snow. I always arrive in this rather ugly Swiss town with mixed feelings. To activists, the WEF is the epitome of hypocrisy: although it is apparently devoted to “improving the state of the world”, the participants are mostly elite, include those from regimes with bad human rights records — and have traditionally been overwhelmingly male (and sometimes prone to misogyny).
Yet, the truth is that the WEF meeting simply epitomises the sins of the wider world — and the organisers insist that this, coupled with the concentration of power in Davos, means the event can be a catalyst for change. It is easy to scoff. But this year there are more debates than I have ever seen before on issues such as climate change, equality and racial inclusion, along with a high(ish) proportion of women on panels — and a hotline (or “integrity” line) has been introduced to enable attendees to report abuse.
More important still, as in earlier years, the fact that representatives from the public, private and non-governmental world are jammed together, in their snow boots, makes it easier to launch ESG initiatives. To cite just one of this ilk: today the World Wildlife Fund is launching a so-called “risk filter” to help companies scan biodiversity risks. Or to offer another: officials from the United Arab Emirates will be giving briefings, trying to allay the furore around the appointment of Sultan al-Jaber — head of the national oil company — as president of this year’s COP28 climate summit.
So Moral Money will issue a daily note this week, written by Simon Mundy, Gillian Tett and the wider FT team, to summarise the good, the bad and the ugly bits of ESG news from Davos. But even before the event starts, take a look at the controversy swirling around the latest Edelman trust barometer, which shows the challenge for business today. And for more background, read about the latest FT awards in the fast-growing category of responsible business education. Let us know what you think about the choices, about Davos — or anything else. (Gillian Tett)
Should we trust Edelman’s trust survey?
The Edelman Trust Barometer has become a staple of World Economic Forum annual meetings. Now on its 23rd annual outing, it is also something of a Rorschach test.
Its fans, including many Davos-going chief executives, see it as a useful scorekeeper of what the public expects from business, citing its findings as support for their decisions to weigh in on tricky social and environmental issues.
Others ask why anyone should parrot a PR firm’s survey that sends chief executives the vanity-stroking message that they are more trusted than governments, NGOs or the media. Should we trust Edelman, which counsels Meta, Shell and various Saudi agencies and companies, to tell us who is trusted?
To its increasingly vocal critics, the answer is a resounding “no”. Given its influence in years past, though, even critics may want to know what message Edelman is bringing to Davos this year.
This year’s headline from its poll of 32,000 people in 28 countries is that business is now the only institution viewed as ethical and competent — “a force for good in a polarised world” at a time when politicians and journalists are, it finds, more often blamed for fuelling that polarisation.
Richard Edelman, CEO of the family firm, told Moral Money the “stunning” jump in how businesses score on these two measures reflected their “good behaviour in the pandemic, on Russia and geopolitics, and on ESG”.
At a time when conservative critics instead equate ESG with misbehaviour and call the Davosian brand of corporate responsibility “woke capitalism”, Edelman says business leaders should not get “cowed by the wokelash”.
By a six to one margin, his survey finds, people want business leaders to do more, not less, to address issues including climate change and economic inequality. He hopes the report will “steel their spines” about speaking out, at least in areas where they have strong business interests.
More than that, he argues, executives must “hold divisive forces accountable”, diverting political spending to counter the entrenched divisions that he says are depressing economic optimism.
Why, though, should people trust Edelman? For 23 years, its boss replied, “we’ve put out this data without getting paid for it and we think it’s a very important spur for business considering its position in society”. As for its more contentious customers, he says “we want to be with companies and countries that want to make change”.
Across Edelman’s industry, consultancies are facing heat from activists who accuse them of enabling greenwashing. Perhaps next year its barometer should also ask whether the public trusts PR firms. (Andrew Edgecliffe-Johnson)
A window on the future of responsible business
Cynics may argue that “responsible business” is an oxymoron, but a growing number of business schools globally are responding to pressures from students, faculty and companies by stepping up their activities around sustainability. That even applies in the US, where there is also the greatest scepticism around ESG.
This area is now at the core of the business education agenda — which is why the FT last year established our Responsible Business Education awards. The winners of the second annual awards, announced today, provide a window on some of the most exciting work happening in this field.
Prizes were awarded in three areas with societal impact: teaching, student projects and academic research. In each category, a panel of independent judges selected four winners, which ranged from applying marketing techniques to increase organ donations in Canada, to using meditation to foster executive leadership around sustainability.
Across the winners and several dozen highly commended projects, North American business schools including Ross at the University of Michigan, Haas at the University of California-Berkeley and Canada’s Ivey featured multiple times. But others came from across Europe as well as India, Taiwan, Korea, Kazakhstan, Singapore and China.
The judges singled out strong examples of academic research with a societal focus and evidence of uptake in policy or practice, including work on identifying modern slavery, alleviating poverty and greenwashing by investors.
For innovative forms of pedagogy, they identified several online courses around sustainability leadership and a teaching case on plastics recycling and the constraints of existing supply chains.
Among student projects with social impact, judges highlighted an “adopt a grandfather” start-up aimed at forging intergenerational bonds, and others focused on developing recyclable shoe insoles, the use of recycled building materials and biodegradable drinking straws.
Academics are clear that the focus on these issues shows no sign of easing, meaning business schools will need to keep fighting to gain an edge. “This is about amending or fixing capitalism,” said Andrew Hoffman at the University of Michigan’s Ross school of business. “Students are jumping over themselves to get into these programmes.” (Andrew Jack)
Asset managers are playing an ugly, dangerous game by courting business from authoritarian regimes, writes industry veteran Toby Nangle. “While working on a state mandate, asset managers effectively become outsourced treasury officials seeking to boost their client’s financial power. In other words, they help authoritarian states around the world to finance aims that can be both repressive and repugnant.”