One of the enduring ironies of the World Economic Forum in Davos is that the world’s élites congregate in this Alpine village each year to contemplate a backlash against the world’s élites.
The Edelman trust barometer, an annual online survey of more than 33,000 people released here this morning, shows that backlash is growing. The survey asks respondents how much they trust government, business, NGOs, and the media to do what is right. It found that among “élites” – those with a college education and incomes in the top 25% — trust in institutions is rising. But for the majority of the population, trust levels have barely budged from their recession lows. “There is a huge and growing disparity between the attitudes at the top of the pyramid and the attitudes of the mass population,” communications guru Richard Edelman told his well-heeled Davos breakfast audience this morning.
Corporate leaders are starting to get the message. A separate survey by PwC of 1,400 CEOs shows they are feeling increased pressure from both customers and employees to address broader social issues. The CEOs report a rise in the desire of talented employees to work for “organizations with social values which are aligned to their own,” and a rise in customers seeking “relationships with organizations that address wide stakeholder needs.”
“A growing number of CEOs are recognizing the need to place values and purpose at the center of their strategy,” said PwC Chairman Dennis Nally. “With the lack of trust that exists today with business, sooner or later you have to figure out how to regain that trust.” As a response to the trend, PwC announced a new partnership yesterday with LRN, an advisory group headed by Dov Seidman, to help corporations “elevate behavior, define and scale their values, and become animated by purpose.”
Such high-minded rhetoric is a staple in Davos. But the PwC survey is a sign that it may be spreading beyond this snow covered village. At FORTUNE, we’ll be discussing the trend at a dinner in Davos Friday with the CEOs of GM, Virgin Group, Blackrock, Alcoa, Cisco, Nestlé, Santander, Salesforce, Monsanto, Allianz, RBC and Deloitte, among others.
For a case study of a business that is putting purpose at the center of strategy, check out Beth Kowitt’s fascinating piece about Fair Oaks Farms, a dairy farm turning cow manure into energy, among other things. It’s featured in the February issue of FORTUNE magazine and is being released today online, here.
Have a great day. More news below.
• Oil woes sting world stocks again
Stock markets across the globe were again stung by fresh declines in crude oil prices that are continuing to raise concerns about the health of the world’s economy. Crude futures in the U.S. and for the international benchmark slipped after reports that Iran had offered sharp discounts to customers in Europe and Asia to find buyers for oil the nation can finally sell, after recently lifting most international sanctions on Iran. Commodity stocks have predictably suffered greatly, though even non-commodity currencies have been suffering.
• CEOs are a pessimistic bunch in 2016
Only 27% of chief executives around the globe think the world’s economy will improve this year, a new survey by PricewaterhouseCoopers shows, down from 37% a year ago. The firm found that U.S. CEOs were strikingly more pessimistic, with just 12% of them predicting the world economy would improve in 2016. That’s sharply down from 55% a year ago. It is important to add that the survey was taken in December. Markets have dived since then, so confidence likely dropped even further.
• Netflix posts big subscriber growth
The video-streaming service reported it added 5.59 million subscribers in the final three months of 2015, higher than the company’s forecast of 5.15 million. The news sent shares higher in after-hours trading on Tuesday. The growth was due to strong demand in markets abroad – Netflix added 4.04 million subscribers internationally (it had guided for 3.5 million). Netflix also projected further gains in the U.S. and internationally for the current quarter.
• Investor calls on Redstone to step down
An activist investor has called on Viacom Chairman Sumner Redstone and CEO Philippe Dauman to step down from the media company, news that sent shares climbing on Tuesday. The owner of MTV and Comedy Central has trailed rivals in stock-price performance in recent years, said SpringOwl Asset Management in a presentation it posted online. It believes new management and a greater focus on digital media could lift the stock. Calls for change would need the blessing of Redstone, as he controls 80% of the voting stock in Viacom.
Around the Water Cooler
• Microsoft donates $1 billion in cloud services
Microsoft has pledged to donate $1 billion in cloud services to non-profit groups and university researchers over three years. The donation comes from the company’s recently-announced philanthropic arm, with Microsoft hoping it can reach 70,000 non-profits through the program. Cloud services have become critical to many organizations, as they provide computing power and back-end software over the Internet to consumers and businesses. They are an alternative to buying and managing the computers and software.
Wall Street Journal
• Circulars award winners lauded at Davos
For the second year in a row at the World Economic Forum Annual Meeting in Davos, awards have been given out to businesses, organizations and government officials who have shown leadership in the promotion of circular economy principles. Experts say the circular economy could unlock trillions in growth down the road by challenging the “take, make, waste” business model that exists today. One award winner this year was Optoro – which has been trying to solve the problem of retail returns that often get thrown away, donated, or sold to a liquidator. Optoro works with major retailers to find a way to sell the merchandise at a fair price, in the process reducing waste.
• Tesla sues German supplier
Electric car maker Tesla has reportedly sued German auto parts maker Hoerbiger Automotive Comfort Systems after the supplier allegedly failed to deliver the company working doors for its new Model X. One of the more interesting features found in the Model X were the swooping “falcon-wing” doors, though they are notoriously difficult to produce. The doors were partly why the Model X was delayed, only starting deliveries in September 2015 after a prototype was showed off in early 2012. Tesla has accused Hoerbiger of misrepresenting that it could deliver functioning doors, which eventually forced the auto company to swing suppliers last year.