DAVOS, Switzerland – Rising income inequality is undermining confidence in capitalism around the world, according to a study by PR firm Edelman ahead of the gathering of elites in the Swiss ski resort of Davos.
Among respondents in the report released Monday, 56% believed that capitalism did more harm than good despite another year of solid economic growth and almost full employment in many developed countries.
The sharp finding could create a stir among business leaders and political leaders as they head to the annual meeting of the World Economic Forum.
“We live in a trust paradox,” said Richard Edelman, CEO of Edelman, which has been conducting its trust survey for 20 years. “Since we started measuring confidence, economic growth has fostered rising confidence.”
Although the relationship between economic growth and belief in the system remains in development areas such as the Middle East and Asia, the study showed that rising inequality in many rich countries has contributed to a weakening of confidence in capitalism.
“Fear stifles hope, and long-standing assumptions about hard work leading to upward mobility are now invalid,” Edelman said.
Businesses and NGOs are the institutions most trusted by people to deal with global issues, a blow to governments divided by populist and partisan politics.
Climate issues are among the most important, and business leaders can no longer ignore consumer concerns, as brands can quickly become tarnished if they are considered unethical.
“There’s an increasing risk of brands being sucked in, and CEOs have a mandate from customers and employees to act,” Edelman said.
Recently, BlackRock CEO Laurence Fink said his company, which manages about $ 7 trillion to investors, will put climate change and sustainability at the center of its investment approach. And Credit Suisse has said after a protest against its activities in a branch in Switzerland that they would stop investing in new coal-fired power plants.
Consumer goods giant Unilever, the maker of Sure deodorants or Comfort fabric conditioners, promised to halve its use of virgin plastic by 2025.
“Business is a catalyst for change,” Edelman said.
The survey involved 30-minute online interviews in 28 countries between October 19 and November 18 with more than 34,000 people worldwide.
Pan Pylas, Associated Press