Beyond buzzwords: Unpacking the significance of “purpose” in corporate strategies

edie provides industry expert insights on defining and measuring purpose.

Purpose has entered mainstream discourse in the few past years, often intertwined with the concept of sustainability.

In 2021, more than a dozen major businesses pledged to put social sustainability higher on the boardroom agenda, by joining a scheme aimed to help businesses become more “purpose-driven”.

While some sceptics argue that the term is vague, others highlight the distinction between purpose and sustainability, emphasising that purpose and sustainability are interlinked, with the latter either enhancing or detracting from the former; therefore, deeming it critical to define a purpose that ensures the value organisations generate aligns with a sustainable future.

During edie’s annual Business Leadership Month, an afternoon of live and interactive webinar sessions and discussions was hosted, featuring a Q&A-style panel debate centred on the future of purpose-driven business.

Here, we summarise insights from business leaders and sustainability experts on the external challenges persisting in the advancement of purpose-driven business, while also delineating potential routes for progress.

1). Crafting and gauging purpose

Emily Kraftman, managing director for UK & Europe at Who Gives A Crap, kicked off the discussion by emphasising the importance of defining and measuring “purpose” to ensure it transcends being merely a buzzword.

Kraftman said: “I think of ‘purpose’ in a pretty practical and literal way, and that is asking why the business was created, and to make sure that purpose is embedded into the business and drives behaviour and action.

“If it’s something that sits separate to everyone’s day to day job, it becomes difficult for it have the meaning that it needs to actually deliver against what that big North Star goal is.”

She highlighted that from a critical perspective, purpose is often viewed as overly vague in its ability to drive action. The straightforward remedy to this perception is to precisely define the purpose and establish methods for measuring its effectiveness.

Kraftman elucidated that for Who Gives A Crap, a global toilet paper brand, purpose is exemplified by the company’s goal to eradicate toilet poverty by 2050 sustainably, and measured through tangible outcomes such as donating 80% of profits annually and transitioning to sustainable paper to achieve tree conservation.

Expanding on this, Emily Morrison, director of sustainability and the just transition at the Institute for Community Studies, further emphasised the essence of true purpose.

She pointed out that authentic purpose often involves making trade-offs, prompting reflection on the extent to which businesses are willing to prioritise societal and environmental benefits over purely economic gains.

The panel concurred that authentic purpose has the transformative potential to elevate beyond mere buzzword status, catalysing tangible change. Additionally, the leaders unified in their belief that a ‘targeted purpose’ empowers businesses to translate these commitments into actionable initiatives.

2) Precision in purpose alignment

ClimateVoice’s campaigns & programme director Jennifer Allyn highlighted the common tendency of companies to prioritise setting ambitious sustainability goals over taking concrete action in the ongoing policy discussions, which are essential to drive change.

Allyn said: “The truth is that most companies can’t meet their own sustainability goals without policy, but they are sitting on the sidelines. Acting on where your impact matters the most is a key part of living your purpose.”

She emphasised the significant role of sustainability professionals within government affairs departments, who prioritise crucial policies that companies can leverage their influence for.

“Companies are part of these trade associations that are actively lobbying to kill climate legislation while they say they are in favour of these policies on the other side,” explained Allyn.

She added: “That gap is huge and it’s important for companies to figure out if their trade associations align with them, and then call out that difference.”

In the US, Climate Voice has launched its ‘Escape the Chamber’ campaign, urging US Chamber of Commerce members to publicly disassociate until the organisation alters its climate policies and lobbying efforts opposing necessary actions to mitigate climate change

Moreover, Morrison underscored the importance of aligning purpose with genuine societal needs rather than crafting it solely based on “what businesses want their purpose to be”.

She highlighted the significance of businesses contributing to a collective purpose that addresses diverse challenges and accelerates decarbonisation efforts effectively.

Morrison said: “We see a lot of interventions that just layer on top of each other, all serving the same groups, communities and job creation metrics, but on the other side we see a lot of opportunities to accelerate decarbonisation fairly that are being missed.

“How far are you willing to define your purpose with a group of much more diverse voices?”

Echoing Morrison, UK Corporate Leaders Group (CLG)’s director Beverley Cornaby advised businesses against attempting to cater to all demographics. Instead, she suggested focusing on a distinctive societal contribution, as many purpose statements fall short due to their lack of specificity and impact in addressing pressing societal challenges.

3).  Fusing purpose into business operations

As the panel discussion drew to a close, the panellists examined several approaches for businesses to assume a leadership role with purpose amid ongoing challenges.

Morrison outlined three crucial points to focus on while defining and embedding purpose into a business, which include prioritising what’s best for the planet, consumers and the business.

She explained that while these interests may not always perfectly align, a sweet spot can typically be found where all three intersect, guiding decision-making processes.

Additionally, Beverly underscored the importance of seeking inspiration from other businesses and engaging in collaborative efforts to address existing barriers.

She emphasised the need for collective action, whether through advocating for policy changes or implementing joint business strategies, to overcome challenges and effectively integrate purpose into business operations.

Lastly, Kraftman stressed the importance of acknowledging the challenging fiscal landscape and communicating purpose in not just the environmental outcomes but also the economic gains such as supply chain resilience and benefits of better reputation in the market.

Kraftman concluded: “If you make sustainability part of a bigger purpose, then that is one of the best ways to do it.”

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