The two most important days in your life are the day you are born and the day you find out why.
—Mark Twain.
Purpose is nothing new. In Built to Last, written 25 years ago by Jim Collins and Jerry Poras they championed the importance of vision and its role in successful businesses. Roll the clock forward to 2010 with Simon Sinek’s Ted Talk on how great leaders inspire action through finding the ‘why’ of their business. Now the time has come to include an element of ESG into your company’s purpose.
So, what do we mean by purpose?
Purpose is the reason a business exists beyond making money. It’s the underlying reason or driving force behind a business. And importantly, this has evolved from being shareholder focussed to encompassing wider ethical concerns and societal contributions. What is its positive impact on the world? Why do employees get out of bed in the morning and come to work?
Why invest in purpose?
Purpose-driven companies make more money, have more engaged employees and more loyal customers, and are even better at innovation and transformational change.
However, there are many other direct and indirect benefits that come from being a B Corp.
A study by Harvard Business Review, highlighted 52% of purpose-driven companies experienced over 10% growth compared with 42% of non-purpose-driven companies. Purpose-driven companies benefitted from greater global expansion (66% compared with 48%), more product launches (56% compared with 33%) and success in major transformation efforts (52% compared with 16%). It went further in its business case for purpose, namely that:
- 88% say it helps create value for customers.
- 73% say it inspires innovation and positive change.
- 72% say it gives employees a sense of fulfilment.
PwC’s Putting Purpose to Work survey, across 502 business leaders in 39 industries across the USA found that 79% business leaders think purpose is central to business success. However, there is a large disconnect between the value of purpose and how central it is to the decision-making process. Leaders often see the benefit in being purpose-driven, but hesitate to actively embed it into the foundational elements of the company.
Purpose in the sustainability era.
Integrating purpose with ESG principles can form the backbone of inclusive, environmentally friendly, and well-governed business models. It’s important to note that a good purpose does not try to be all things to all people, but rather focuses on the distinctive contribution the business makes to society and the world. What’s your superpower and how can you use it to make a difference?
A common challenge for company leaders embracing a purpose-led approach is how to execute and integrate the high-level commitments that purpose directs, connecting the purpose to a strategy that optimises the opportunity to make a positive social and environmental impact together with sustainable financial returns.
Kellogg Company (Kellogg’s) is among those companies that consistently link their global purpose platform to their sustainability agenda and ensures their purpose is cantered on the well-being of their employees and other stakeholders. More specifically, the company, through its Kellogg’s™ Better Days Promise, aims to advance sustainable and equitable access to food by addressing the intersection of well-being, hunger, sustainability, and equity, diversity & inclusion to create better days for 3 billion people by the end of 2030.
At TheESGBusiness we believe businesses have a major role to play to meaningfully address the enormous, complex challenges facing the world and the starting point for this is by ensuring they integrate ESG into their purpose.
