Aligning corporate purpose for the long-term benefit of people and planet
BSI’s director of sectors and standards Anne Hayes marks edie's ENGAGEMENT Week to discuss how businesses can uncover and clarify their purpose, and how that can deliver prosperous results for the environment and society.
Gone are the days when it was unconventional to suggest that an organisation needed a purpose beyond increasing revenue and generating shareholder returns. In 2023, many organisations, large and small, and across every sector, will be reinforcing their corporate purpose to their employees, investors and consumers. Yet there is still little consensus on how corporations can demonstrate that they are contributing to the good of society and the world.
The climate crisis and escalating global instability have drawn attention to the need for companies to not only act in alignment with their purpose but live it every day. Increasingly, their customers, investors and regulators also want to know if organisations are part of the solution to society’s challenges and aspirations.
The Rising Prominence of Corporate Purpose
The way consumers treat organisations that act either without purpose or contrary to their stated purpose is changing – reflecting new expectations of their role in society.
Newly published figures from BSI reveal that two-thirds of UK consumers say that they would abandon firms that purpose-wash. Indeed, close to half (47%) of adult UK consumers make purchasing decisions at least in part based on a company’s stated corporate purpose.
As the cost-of-living crisis continues, consumers are also changing their spending behaviors. These changes are most pronounced for younger consumers, who are also the demographic most keenly attuned to a business’s consistency, or inconsistency, with its approach to purpose.
BSI’s research found that nearly three in four of 18- to 24-year-olds actively consider an organisation’s purpose when making purchasing decisions. They are also more likely than other demographics to react negatively to purpose-washing, with 80% more likely to abandon businesses acting inconsistently with their purpose.
Most, but not all, organisations have a stated, written purpose beyond profit – close to two-thirds (63%) according to the survey. And nearly four-fifths (78%) consider the purpose of other organisations they use or work with. Nevertheless, two-thirds do not frame or measure the delivery of their purpose through an independent third party.
What’s clear is that organisations that state their purpose are now not only crystallising their company’s existence, but they are also making a promise to consumers – one that younger consumers in particular are starting to take notice of. But in today’s world, how can business leaders stay the course when it comes to their purpose?
The Route to Purpose
As the generation that values purpose-driven organisations reaches adulthood, it’s clear purpose initiatives will be critical to the long-term success of profitable enterprises. At BSI, we have published a new purpose standard that provides a practical guide for organisations seeking to become purpose-driven organisations.
Naturally, one size does not fit all when deciding on and operationalising a corporate purpose. This will depend on factors such as a company’s size, sector, industry, culture, starting point and available resources. That’s why the standard describes the worldviews, principles and, crucially, the behaviors which organisations aspiring to be purpose-driven can flexibly apply.
The Turning Point
There is no better time than now to realise how organisations can play their part in accelerating progress to a sustainable future for the long-term wellbeing of all. The world in 2023 faces multiple crises where organisations can have a real impact.
The benefits of clarifying purpose are wide-ranging, with discernible impacts on internal culture, a company’s bottom line and ability to attract the best talent, who are often very purpose-driven themselves. 2023 is the year in which organisations are reassessing how and why they do business and aligning corporate purpose for the long-term benefit of people and planet.
The purpose standard is freely available to download here: https://www.bsigroup.com/en-GB/standards/pas-808/
BSI and edie’s ENGAGE event
BSI’s Hayes is speaking at edie’s online sustainability reporting and communications sessions, taking place on Wednesday 25 January.
edie’s ENGAGE 2023 online event effectively combines three webinars into a single afternoon on Wednesday 25 January, with each session taking a particular format. The first will take the form of an audience-led Q&A; the second will be a series of quick-fire case studies; and the third will take a ‘masterclass’ format.
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